Question 1

The entry in the General Fund to record the reimbursement from a capital projects fund for legal services paid by the General Fund on its behalf would include:

Accepted Answer

If the General Fund makes payments on behalf of another fund, when the reimbursement is received from the other fund, Expenditures may be credited.

Question 2

For the Statement of Cash Flows for an Proprietary Fund:

Accepted Answer

Governments are required to use the direct method. In addition, a reconciliation of net operating income to net cash flow from operating activities must be provided in a separate schedule to accompany the cash flows statement or in the notes to the financial statements.

Question 3

The entry in the General Fund to record the purchase of water for City Hall from the city's Water Utility Enterprise Fund would include a debit to:

Accepted Answer

When the General Fund purchases goods or services from an Enterprise Fund, it records those goods or services as an expenditure.

Question 4

The financial statements of fiduciary funds:

Accepted Answer

The financial statements of fiduciary funds do not include Fund Balances, but Net Assets.

Question 5

A redemption of the final serial of general obligation bonds, including a deficiency covered by the general fund, would affect which funds and/or account groups?

Accepted Answer

The redemption of the final serial of general obligation bonds, including a deficiency covered by the general fund, would impact the General Fund, which would have a debit to Other Financing Uses for the amount to cover the deficiency; the Debt Service fund, in which the payment of the debt and related interest would be recorded; and the General Long-Term Debt Account Group, from which the debt would be removed.

Question 6

If a county collects taxes on behalf of the city and school district, it would record the taxes in the

Accepted Answer

An agency fund is required when money collected or withheld, such as taxes collected on behalf of the city and school district, must be forwarded to the proper destination.

Question 7

Which of the following is not a classification of net assets of proprietary funds?

Accepted Answer

The three classifications of net assets of a proprietary fund are: unrestricted, restricted and invested in capital assets, net of related debt.

Question 8

Interfund transactions include all of the following except for:

Accepted Answer

When one fund, typically an internal service fund or enterprise fund, provides services to another, the proprietary fund recognizes revenue for the service and the other fund will recognize an expenditure or expense.

Question 9

A government may use agency funds to account for all but the following:

Accepted Answer

Taxes that are collected that are restricted for a special purpose would be accounted for in a special purpose fund.

Question 10

The activities of a central motor pool that supplies and services vehicles for the use of municipal employees on official business should be accounted for in a(n)?

Accepted Answer

Internal service funds are similar to enterprise funds in that they are self-sustaining, depend on amounts charged for services rendered, and receive start-up resources. The difference is that users of their services are other departments of the same governmental unit or other governmental units.

Question 11

The best fund in which to account for the interest and dividends from an endowment to purchase library books would be a(n)

Accepted Answer

The establishment of a private-purpose trust fund results from the acceptance of assets that are invested to produce earnings for a designated external purpose.

Question 12

In the Statement of Cash Flows for an Proprietary Fund, the receipt of an operating grant would be included in cash flows from:

Accepted Answer

In the Statement of Cash Flow for an Proprietary Fund, the receipt of an operating grant or borrowings non related to capital acquisitions, would be included in cash flows from operating activities.

Question 13

Which of the following is not a typical year-end statement for an Enterprise Fund?

Accepted Answer

The Balance Sheet, Statement of Revenue, Expenses and Changes in Net Assets and the Statement of Cash Flows are required financial statements for an Enterprise Fund.

Question 14

Internal Service funds:

Accepted Answer

Internal Service funds must recover their costs, including depreciation, through user fees, or be subsidized.

Question 15

When a landfill operation is accounted for in an Enterprise Fund:

Accepted Answer

In each year of the landfill's useful life, the government recognizes, as both an expense and an increase in a liability, a portion of the estimated costs for closure and post-closure care.

Question 16

The entry in the General Fund to record the an operating subsidy paid to the city's Water Utility Enterprise Fund for which it does not expect repayment would include a debit to:

Accepted Answer

When the General Fund sends fund to another fund, for which it does not expect repayment, it is considered an Other Financing Use.

Question 17

In the Statement of Cash Flows for an Proprietary Fund, the acquisition of a fixed asset would be included in cash flows from:

Accepted Answer

In the Statement of Cash Flow for an Proprietary Fund, the acquisition or disposition of a fixed asset, and related grants or transfers, would be included in cash flows from capital and related financing activities.

Question 18

Which of the following terms best describes the accounting methods used to account for a city's Pension Trust Fund?

Accepted Answer

The Pension Trust Fund is a Fiduciary Fund, which will be accounted for using the accrual basis of accounting.

Question 19

If general obligation debt is refunded to lower the interest rate and the proceeds are irrevocably placed with an escrow agent or trustee to pay off the old debt as it comes due, the government must

Accepted Answer

If debt is refunded and the refunding met the criteria for in-substance defeasance, the proceeds of the new debt issue are placed in trust with an escrow agent and the amount of bonds payable is adjusted to reflect the new amount outstanding.

Question 20

The main difference between an agency fund and a trust fund is:

Accepted Answer

An agency fund is required when money collected or withheld, such as deductions from government employees' salaries for social security or for hospitalization premiums, must be forwarded to the proper destination. Agency funds frequently have no end-of-period balances because money is transferred prior to the end of the period. The other situations describe trust funds.

Quiz 16: Governmental Accounting: Other Governmental Funds, Proprietary Funds, and Fiduciary Funds