ch03
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ch03

Course Number: BUSI 3888, Spring 2009

College/University: Baltimore City

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Chapter 3 Issues of Budgeting and Control TRUE/FALSE (CHAPTER 3) 1. Capital budgets focus on plans for the acquisition and construction of fixed assets. 2. The accounting cycle for most governments is two to three years, consistent with the terms of elected officials. 3. Most budgets are prepared on a cash or modified cash basis. 4. Neither the GASB not the FASB set standards for budgetary accounting. 5. State and...

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3 Chapter Issues of Budgeting and Control TRUE/FALSE (CHAPTER 3) 1. Capital budgets focus on plans for the acquisition and construction of fixed assets. 2. The accounting cycle for most governments is two to three years, consistent with the terms of elected officials. 3. Most budgets are prepared on a cash or modified cash basis. 4. Neither the GASB not the FASB set standards for budgetary accounting. 5. State and local governments must prepare their GAAP budgetary comparisons on the modified accrual basis of accounting. 6. When budgets are integrated into a governments accounting system, estimated revenues are debited. 7. Encumbrances and expenditures both reduce total fund balances of state and local governments. 8. Not-for-profit budgets focus first on revenues and secondarily on expenditures. 9. State and local governments budget to actual comparisons present both original and final budget amounts. 10. Cash-basis budgets help governments focus on interperiod equity. Granof Test Bank Chapter 3 Page 1 MULTIPLE CHOICE (CHAPTER 3) 1. Which of the following is NOT a function of a budget in the governmental environment? a) Planning. b) Organizing. c) Controlling. d) Evaluating. For which of the following funds would flexible budgeting be most valuable? a) Special revenue fund. b) Capital project fund. c) Agency fund. d) Enterprise fund. Property taxes levied on the citizens of the Hill County would most appropriately be budgeted in which of the following budgets? a) Operating budget. b) Capital budget. c) Flexible budget. d) All of the above. Expenditures should be budgeted by character. An example of a character classification would be a) Current expenditures. b) Salaries. c) Public Safety. d) Police Department. Which of the following is a primary benefit of a performance budget? a) It facilitates control by establishing rigid spending mandates. b) It encourages accomplishment of objectives by associating expenditures with outcomes. c) It encourages planning by requiring management to anticipate every type of expenditure. d) It provides decision-makers with detailed information. Which branch of local (city and county) government most commonly prepares the budget? a) Executive branch. b) Legislative branch. c) Judicial branch. d) None of the above. An officially adopted budget is generally called a) An appropriation bill. b) An operating budget. c) A capital budget. d) None of the above. Periodic allocations of funds to departments or agencies are generally called a) Appropriations. b) Allotments. c) Allocations. d) None of the above. 2. 3. 4. 5. 6. 7. 8. Granof Test Bank Chapter 3 Page 2 9. Which of the following bases of accounting has been established by GASB for use in the preparation of the general fund budget? a) Cash basis. b) Modified accrual basis. c) Accrual basis. d) None of the above. 10. Which of the following is the best reason for preparing budgets for governmental entities on the cash basis? a) Cash basis budgeting helps to achieve interperiod equity. b) Cash basis budgeting helps to ensure that the government will receive no more in revenues than it is required to disburse. c) Cash basis budgeting helps a government plan to have cash on hand to pay bills d) Cash basis budgeting more accurately reflects the economic impact of fiscal activities. 11. Which of the following is NOT true about cash basis budgeting? a) Cash basis budgeting permits a government to balance its budget by delaying cash disbursements. b) Cash basis budgeting permits a government to balance its budget by advancing the recognition of revenue. c) Cash basis budgeting encourages interperiod equity. d) Cash basis budgeting complicates financial accounting and reporting. 12. GASB requires that governmental entities present their budgeted-to-actual comparison data on which of the following bases of accounting? a) Budgetary basis. b) Cash basis. c) Modified accrual basis. d) Accrual basis. 13. Which of the following is NOT a reason that legally adopted budgets may not be readily comparable to amounts reported in the GAAP-based financial statements? a) Differences in Basis of Accounting. b) Differences in Timing. c) Differences in Reporting Entity. d) Differences in Recognition. 14. The City of Lakeview adopts its budget on a basis of accounting that permits outstanding purchase commitments to be charged against the budget in the year that the goods are ordered instead of in the year they are received. During the year the City ordered and received $4,000 of supplies (of which $3,000 had been paid and $1,000 was unpaid) and had $500 of outstanding purchase commitments for supplies at year-end. In the Statement of Budget to Actual, the expenditures for supplies would be: a) $3,000. b) $3,500. c) $4,000. d) $4,500. Granof Test Bank Chapter 3 Page 3 15. A governmental entity has formally integrated the budget into its accounting records. At year-end the ledger account Revenues from Property Taxes has a debit balance. Which of the following is the best explanation for the debit balance? a) The entity overestimated property tax revenue when preparing its budget. b) The entity underestimated property tax revenue when preparing its budget. c) The entity collected more in property taxes than it anticipated. d) There is no logical explanation; revenue accounts usually do not have debit balances. 16. A governmental entity has formally integrated the budget into its accounting records and uses encumbrance accounting. During the year the government ordered but had not yet received a new police car. What effect will this event have on the unencumbered balance in the account ExpendituresCapital Outlay, Police Department? a) The balance in the account will not be affected until the police car is received. b) The balance in the account will be increased. c) The balance in the account will be decreased. d) Purchase orders never affect any budgetary account balances. 17. A governmental entity has formally integrated the budget into its accounting records. At the end of the third quarter the ledger account Expenditures--Salaries has a $100,000 debit balance. Which of the following is a true statement? a) The entity has $100,000 available to spend on salaries. b) The entity has incurred salaries in the amount of $100,000. c) The entity had paid salaries in the amount of $100,000. d) The entity has overspent its budget for salaries by $100,000. 18. A public school district formally adopted a budget with estimated revenues of $500 and approved expenditures of $490. Which of the following is the appropriate entry to record the budget? a) Debit Estimated Revenues $500; Credit Appropriations $490; Credit Fund Balance $10. b) Debit Appropriations $490; Debit Fund Balance $10; Credit Estimated Revenues $500. c) Debit Encumbrances $490; Debit Fund Balance $10; Credit Estimated Revenues $500. d) Memorandum entry only. 19. A city formally adopted a budget at the beginning of the current year. Budgeted revenues were $500 and budgeted expenditures were $490. During the year actual revenues were $520 and actual expenditures were $480. Which of the following statements is true with regard to Fund Balance at the end of the current year. Fund balance at the end of the current year in comparison to fund balance at the end of the preceding year will be a) $10 greater. b) $30 greater. c) $40 greater. d) $50 greater. 20. A county general fund budget includes budgeted revenues of $600 and budgeted expenditures of $595. Actual revenues for the year were $610. To close the Estimated Revenues account at the end of the year a) Debit Estimated Revenues $10 b) Credit Estimated Revenue $10 c) Debit Estimated Revenues $600 d) Credit Estimated Revenues $600 Granof Test Bank Chapter 3 Page 4 21. A university that formally integrates the budget in the accounting system and uses encumbrance accounting orders some new computers that will cost approximately $20,000. To recognize this event the university should make which of the following entries? a) Debit Expenditures $20,000; Credit Encumbrances $20,000 b) Debit Encumbrances $20,000; Credit Reserve for Encumbrances $20,000 c) Debit Encumbrances $20,000; Credit Vouchers Payable $20,000 d) No entry required when the order is placed. 22. A county previously encumbered $10,000 for the acquisition of supplies. The supplies were received at a total cost of $9,800. To recognize this event the county should make which of the following entries? a) Debit Reserve for Encumbrances $10,000; Credit Encumbrances $10,000. b) Debit Reserve for Encumbrances $9,800; Credit Encumbrances $9,800. c) Debit Encumbrances $10,000; Credit Reserve for Encumbrances $10,000. d) Debit Encumbrances $9,800; Credit Reserve for Encumbrances $9,800. 23. A city received supplies that had been previously encumbered. The supplies were encumbered for $5,000 and had an actual cost of $4,900. To recognize this event the county should make which of the following entries? a) Debit Reserve for Encumbrances $5,000 and Supplies $4,900; Credit Encumbrances $5,000 and Vouchers Payable $4,900. b) Debit Encumbrances $5,000 and Supplies $4,900; Credit Reserve for Encumbrances $5,000 and Vouchers Payable $4,900. c) Debit Reserve for Encumbrances $4,900 and Supplies $4,900; Credit Encumbrances $4,900 and Vouchers Payable $4,900. d) Debit Encumbrances $4,900 and Supplies $4,900; Credit Reserve for Encumbrances $4,900 and Vouchers Payable $4,900. 24. To close Encumbrances at the end of the year which of the following entries should be made? a) Debit Encumbrances; Credit Fund Balance. b) Debit Reserve for Encumbrances; Credit Encumbrances. c) Debit Fund Balance; Credit Encumbrances. d) No closing entry needed. 25. To close Reserve for Encumbrances at the end of the year which of the following entries should be made? a) Debit Reserve for Encumbrances; Credit Fund Balance. b) Debit Reserve for Encumbrances; Credit Encumbrances. c) Debit Fund Balance; Credit Reserve for Encumbrances. d) No closing entry needed. 26. During the previous year, Bane County closed its Encumbrance account. At the end of the previous year there were $5,000 in outstanding purchase commitments. To restore these commitments to the accounts, which of the following entries would be required? a) Debit Reserve for Encumbrances $5,000; Credit Encumbrances $5,000. b) Debit Encumbrances $5,000; Credit Reserve for Encumbrances $5,000. c) Debit Encumbrances $5,000; Credit Fund Balance $5,000 d) Debit Fund Balance $5,000; Credit Reserve for Encumbrances $5,000. Granof Test Bank Chapter 3 Page 5 27. When Spruce City receives goods at a cost of $9,700 that were encumbered in the prior year for $10,000, which of the following entries are required (assume that encumbrances lapse at year end)? a) Debit Expenditures $9,700; Credit Vouchers Payable $9,700; no entry for Encumbrances. b) Debit Expenditures $9,700 and Reserve for Encumbrances $10,000; Credit Vouchers Payable $9,700 and Encumbrances $10,000. c) Debit Expenditures $10,000 and Reserve for Encumbrances $10,000; Credit Vouchers Payable $10,000 and Encumbrances $10,000. d) Debit Reserve for Encumbrances $10,000; Credit Encumbrances $10,000; no entry for Expenditures. 28. At year-end Oakland County had $3,000 in outstanding purchase commitments on the books. After the appropriate closing entries were made, what is the effect on the total Fund Balance of Oakland County? a) It is $3,000 greater than it would have been if the purchase commitments had been fulfilled by year-end. b) It is $3,000 less than it would have been if the purchase commitments had been fulfilled by yearend. c) It is the same as it would have been if the purchase commitments had been fulfilled by year-end; it will be reduced by $3,000 next year. d) It is the same as it would have been if the purchase commitments had been fulfilled by year-end; it will not change next year. 29. Hill City uses encumbrance accounting to control expenditures. However, it charges the cost of outstanding purchase commitments to expenditures in the year they are received, not in the year they are ordered. If Hill City had $5,000 of purchase commitments outstanding at the end of Year 1 and received those goods during Year 2 at a cost of $4,900, what would be the impact on total Fund Balance for Year 2? a) Total Fund Balance at the end of Year 2 would be $4,900 less than at the end of Year 1. b) Total Fund Balance at the end of Year 2 would be $100 less than at the end of Year 1. c) Total Fund Balance at the end of Year 2 would be $100 greater than at the end of Year 1. d) Total Fund Balance at the end of Year 2 would be same as it was at the end of Year 1. 30. The City of Denton uses encumbrance accounting to control expenditures. It charges the cost of outstanding purchase commitments to expenditures in the year they are received, not in the year they are ordered. If the City had $7,000 of purchase commitments outstanding at the end of Year 1 and received those goods during Year 2 at a cost of $7,800, what would be the impact on total Fund Balance for Year 2? a) Total Fund Balance at the end of Year 2 would be $7,800 less than at the end of Year 1. b) Total Fund Balance at the end of Year 2 would be $800 less than at the end of Year 1. c) Total Fund Balance at the end of Year 2 would be $800 greater than at the end of Year 1. d) Total Fund Balance at the end of Year 2 would be same as it was at the end of Year 1. Granof Test Bank Chapter 3 Page 6 31. Lincoln County uses encumbrance accounting to control expenditures. It charges the cost of outstanding purchase commitments to expenditures in the year they are ordered, not in the year they are received. If the County had $7,000 of purchase commitments outstanding at the end of Year 1 and received those goods during Year 2 at a cost of $7,800, what would be the impact on total Fund Balance for Year 2? a) Total Fund Balance at the end of Year 2 would be $7,800 less than at the end of Year 1. b) Total Fund Balance at the end of Year 2 would be $800 less than at the end of Year 1. c) Total Fund Balance at the end of Year 2 would be $800 greater than at the end of Year 1. d) Total Fund Balance at the end of Year 2 would be same as it was at the end of Year 1 32. Why would a government be more likely than a not-for-profit organization to integrate its budget into its accounting system? a) Because the amount of expenditures are likely to be greater. b) Because the penalties for exceeding budgeted expenditures are more severe. c) Because governments have more sophisticated accounting systems than not-for-profit organizations. d) Governments are NOT more likely than not-for-profits to formally integrate their budget into their accounting system. 33. Which of the following is the primary reason why governments formally integrate their legally adopted budget into their accounting systems? a) It is required by GASB. b) It enables the government to better control its expenditures. c) It keeps the government from overspending its budget. d) It helps a government by letting it know when it is in danger of overspending its budget. 34. Washington County received goods that had been approved for purchase but for which payment had not yet been made. Should the following accounts be increased? Expenditures a) b) c) d) No Yes Yes No Encumbrances No Yes No Yes 35. In which of the following cases would the reserve for encumbrances account be decreased? a) Budget revisions are made, decreasing Appropriations b) Payment is made for goods received c) Goods, related to purchase orders, are received d) Purchase orders are issued 36. A review of Park Citys books shows the following information: I. $2,500 of outstanding vouchers payable II. $3,000 of outstanding purchase order amounts Which of these amounts would you expect to see in the general funds encumbrances account? a) $2,500 b) $3,000 c) $5,500 d) $500 Granof Test Bank Chapter 3 Page 7 PROBLEMS (CHAPTER 3) 1. Assume that the City of Pasco maintains its books and records in a manner that facilitates preparation of the fund financial statements. The City engaged in the following transactions related to its general fund during the current fiscal year. The City formally integrates the budget into the accounting records. The City does not maintain an inventory of supplies. All amounts are in thousands. REQUIRED: Prepare, in summary form, the appropriate journal entries. (a) The City Council approved a budget with revenues estimated to be $600 and expenditures of $590. (b) The City ordered supplies at an estimated cost of $25 and equipment at an estimated cost of $20. (c) The City incurred salaries and other operating expenses during the year totaling $550. The City paid for these items in cash. (d) The City received the supplies at an actual cost of $23. (e) The City collected revenues of $595. 2. School District #25 formally integrates the budget into the accounting system and uses the encumbrance system. All appropriations lapse at year-end. At year-end, before closing entries, the District had the following balances in its accounts. All accounts had normal balances. REQUIRED: (a) Prepare the necessary closing entries. (b) Prepare a balance sheet after closing. $ 50 590 172 20 600 573 110 20 595 Accounts Payable Appropriations Cash Encumbrances Estimated Revenues Expenditures Fund Balance Reserve for Encumbrances Revenues Granof Test Bank Chapter 3 Page 8 3. Assume that the County of Katerah maintains its books and records in a manner that facilitates preparation of the fund financial statements. The County formally integrates the budget into the accounting system and uses the encumbrance system. All appropriations lapse at year-end. At the beginning of the fiscal year, the County had the following balances in its accounts. All amounts are in thousands. REQUIRED: Prepare the necessary entries for the current fiscal year. Cash $200 Fund Balance-Unreserved 50 Reserve for Encumbrances 150 (a) The County made the appropriate entry to restore the prior year purchase commitments. (b) The County Board approved a budget with revenues estimated to be $800 and expenditures of $750. (c) The County received the items that had been ordered in the prior year at an actual cost of $135. (d) The County ordered supplies at an estimated cost of $50 and equipment at an estimated cost of $70. (e) The County incurred salaries and other operating expenses during the year totaling $600. The County paid these items in cash. (f) The County received the equipment at an actual cost of $75. (g) The County earned and collected, in cash, revenues of $810. Granof Test Bank Chapter 3 Page 9 4. Kayla County prepares its general fund financial reports in accordance with generally accepted accounting principles (GAAP) but its budgetary basis for the general fund differs from GAAP. The Budget to Actual Statement for the general fund is presented below. All numbers are in thousands. REQUIRED: Prepare the GAAP-basis operating statement for the general fund. (a) For budgetary purposes, the County recognizes encumbrances as expenditures in the year of the purchase commitment; it recognizes supplies as expenditures when acquired. For budgetary purposes the County recognizes all revenues in the fiscal year collected. For GAAP-basis financial reporting, the County recognizes supplies as expenditures as consumed. It recognizes property taxes as revenue if they are collected within 60 days of fiscal year end. All other revenues are recognized on the cash basis for GAAP. (b) The following additional information is available. Beginning of Year Encumbrances $ 30 Supplies Inventory on Hand $5 Property Taxes Expected to be Collected Within 60 days of Year End $ 50 End of Year $ 50 $ 20 $ 40 Property Tax Revenue Other Revenue Total Revenue Expenditures Excess of Revenues over Expenditures Amended Budget $ 700 500 $1200 1190 $ 10 Actual (on Budget Basis) $ 710 550 $1260 1150 $ 110 Granof Test Bank Chapter 3 Page 10 5. Geneva County authorized the issuance of bonds and contracted with the Chessie Construction Company (CCC) to build a new convention center. During 2006, 2007, and 2008, the County engaged in the transactions that follow. All were recorded in the Countys capital projects fund. a. b. c. d. e. f. g. In 2006, the County issued $350 million in bonds (and recorded them as bond proceeds, an account comparable to revenues.) The County approved the contract proposal from CCC for $350 million and encumbered the entire amount. CCC billed the County for $115 for construction to date. The County paid CCC the amount due in full. In 2007, CCC billed the County for additional construction to date of $190 million. The County paid the amount due in full. In 2008, CCC completed construction of the convention center and billed the County an additional $50 million. The County approved the additional costs, even though the total cost of the center was now $355, $5 million more than the contract initially provided for. The County transferred $5 million from its General Fund to the capital projects fund. The County paid the $50 million in full. h. i. REQUIRED: 1. Prepare the journal entries to record these transactions in the capital projects fund, including closing entries. Assume that amounts originally encumbered are reappropriated each year. Hence the County need not reestablish encumbrances in each year after the first year. Instead, it can close the expenditures of the second and third years to reserve for encumbrances rather than to fund balances. 2. What other funds or schedules would be affected by the transactions listed? Granof Test Bank Chapter 3 Page 11 6. The town of Terry began 2006 with an unreserved balance of $10 million in its street repair fund, a capital projects fund. At the start of the year, the city council appropriated $6 million to reconstruct portions of the roadbed for two of its major roadsMain Street and Koeller Avenue. Shortly after, the town signed contracts with two construction companies to perform the repairs for a total of $6 million. During the year, the town received bills from the construction companies as follows: a. $3.2 million for the entire cost of repairs to Main Street. This amount is $.2 higher than expected due to design changes approved by the town. The town did not encumber the additional $.2 million. b. $2.0 million, representing a progress billing for repairs to Koeller Avenue, which were not completed at the end of 2006. At the beginning of 2007, the town reappropriated the remaining $1 million for the Koeller Avenue repairs. During the year, the town received this bill: c. $.7 million, representing the final billing for the Koeller Avenue repairs. The final cost was less than anticipated by $.3 million. REQUIRED: Prepare journal entries to record the events and transactions over the two-year period. Include entries to appropriate, reappropriate, encumber, and re-encumber the required resources, to record the payment of the bills, and to close the accounts at the end of each year. Determine the reserved and unreserved fund balances for the capital projects fund at the end of the second year. Granof Test Bank Chapter 3 Page 12 7. The Breast Cancer Fund, a not-for-profit organization, receives its funding primarily from grants government and private contributions. In turn, the Fund provides resources to other organizations and individuals for breast cancer research. Many of the government grants it receives are reimbursementtype. That is, the Fund must incur specific costs to be eligible for grants that reimburse those costs. The Fund makes the following estimates as to its next fiscal year: It will be awarded $7 million in government grants; all but $.5 million will be received during the fiscal year. The balance will be reimbursed in the first six months after year-end. The Institute will also receive $.2 million in reimbursement grants related to the previous year. It will receive $600,000 in pledges from private donors. It expects to collect $450,000 during the year and $125,000 in the following year. It estimates that $25,000 will never be received. It also expects to collect $80,000 in pledges made the prior year. It will pay $7 million for outside research. It will purchase new computer equipment costing $100,000. The Fund currently owns its own building, which it had purchased for $800,000, and additional furniture and equipment that it acquired for $250,000. The building has a useful life of twenty years; the furniture and equipment have useful lives of 5 years. It is the Funds policy to record a full year of depreciation expense in the year that assets are placed in service. Employees will earn wages and salaries of $340,000, of which they will be paid $320,000 during the forthcoming year and the balance in the next year. It will also pay another $15,000 in payroll costs incurred in the prior year. It will pay the $75,000 insurance deductible on an employee-related lawsuit settled the previous year. It will incur operating costs of $90,000, of which it will pay $70,000 in the forthcoming year and $20,000 in the following year. It will also pay another $10,000 in costs incurred in the previous year. REQUIRED: 1. Prepare two budgets, one on the cash basis, the other on the full accrual basis. Show both on the same schedulethe full accrual basis in the first column and the cash basis in the second column. 2. Comment on which budget better shows whether the Fund is covering the economic cost of the services it provides. 3. Which is likely to be more useful to Fund managers? Granof Test Bank Chapter 3 Page 13 8. The following schedule shows the amounts related to supplies that the City of Pascal debited and credited to the indicated accounts during the year (not necessarily year-end balances), before closing entries. The City records its budget, encumbers all of its expenditures, and initially vouchers all payments. All revenue was collected in cash. REQUIRED: Some information is missing in the schedule below. Reconstruct (in summary) the entries the City must have made during the year to determine the missing data. (in thousands) Debits Credits $ 117 $? ? 0 0 ? 70 54 0 ? ? 58 ? 0 ? 93 115 120 Cash Estimated revenues Revenues Vouchers payable Appropriations Encumbrances Expenditures Reserve for encumbrances Fund balance Granof Test Bank Chapter 3 Page 14 9. The data presented below were taken from the books and records of the village of Denaville. All amounts are in millions. The village encumbers all outlays. As is evident from the data, some goods or services that were ordered and encumbered have not yet been received. City regulations require that all appropriations lapse at year-end. Amounts Received Estimated/ Amounts Appropriated Encumbered Revenues Property taxes Sales taxes Licenses Other Estimated Cost Actual Actual Cost Revenues $7,900 3,900 300 700 12,800 $7,800 3,600 200 400 $12,000 Expenditures/Appropriations General government Public safety Recreation Health and sanitation Excess of estimated revenues over appropriations Beginning fund balance Estimated ending fund balance 3,000 6,000 1,200 2,300 12,500 300 1,200 $1,500 $2,600 5,900 1,200 2,200 $11,900 $2,400 $2,800 5,000 4,900 800 900 2,200 2,100 $10,400 $10,700 I. Prepare summary entries to record: a) the encumbrance of the goods and services b). the receipt of the goods and services assuming all invoices were paid in cash. II. What would be the year-end: a) fund balance (unreserved) b) reserve for encumbrance balance III. Suppose a city accountant prepared a schedule comparing budgeted to actual revenues and expenditures. The citys mayor notes (correctly) that the very favorable variance between budgeted and actual expenditures was not merely a matter of luck e.g., attributable to factors beyond the control of the city, such as less than usual snowfall and hence lower than usual snow removal costs. Rather, he boasts, it was due to a concerted effort on the part of his administration to hold the line on expenditures. Why, in governments and not-for-profit organization might favorable expenditure variances be an indication of inept rather than competent management? Granof Test Bank Chapter 3 Page 15 ESSAYS (CHAPTER 3) 1. Many governments formally integrate the budget into the accounting system. Explain how this is accomplished. Also, explain why a government would formally integrate the budget into the accounting system. 2. Many governments budget on the cash basis. Explain why a government would budget on a cash basis rather than on a GAAP-basis. Discuss the advantages and disadvantages of cash-basis budgets. 3. GAAP require state and local governments to include in their annual financial reports a budget-toactual comparison showing actual results and original and final appropriated budgets. What are the advantages of requiring both the original and final appropriated budget amounts? 4. Why do many governments not consider it necessary to prepare appropriation budgets for, and incorporate budgetary entries into the accounts of their capital projects funds? 5. Why may flexible budgets be more appropriate for a governments business-type activities? 6. An incumbent mayoral candidate for the City of Geneva boasts that the budgeted year-end excess of revenues over expenditures for the period just ended was significantly greater than expected. Why is this favorable result not necessarily a good thing? 7. In what way will budgetary entries and encumbrances affect amounts reported in year-end GAAP balance sheets and operating statements of state and local governments? 8. What are the possible differences that may occur between a state or local governments budgetary practices and GAAP? 9. A governments unreserved general fund balance at year-end is indicative of the amount that the government has available for appropriation in future years. Explain and provide an example to support your answer. 10. When governments adopt Statement No. 34, the variance column on general fund budget to actual statements will reflect only relatively small amounts. Do you agree? Explain. Granof Test Bank Chapter 3 Page 16 ANSWERS TO TRUE/FALSE (CHAPTER 3) 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. T F T T F T F T T F ANSWERS TO MULTIPLE CHOICE (CHAPTER 3) 1. B 2. D 3. A 4. A 5. B 6. A 7. A 8. B 9. D 10. C 11. C 12. A 13. D 14. D 15. D 16. A 17. B 18. A 19. C 20. D 21. B 22. A 45. 23. A 24. C 25. D 26. C 27. B 28. A 29. A 30. A 31. A 32. B 33. B 34. C 35. C 36. B Granof Test Bank Chapter 3 Page 17 Formatted: Bullets and Numbering ANSWERS TO PROBLEMS (CHAPTER 3) Problem 1 (a) Estimated Revenue Fund Balance Appropriations (b) Encumbrances Reserve for Encumbrances (c) Expenditures Cash (d) Reserve for Encumbrances Encumbrances Expenditures Cash (e) Cash Revenues 600 10 590 45 45 550 550 25 25 23 23 595 595 Problem 2 (a) Appropriations Fund Balance Estimated Revenue (b) Revenues Fund Balance Expenditures Encumbrances 590 10 600 595 2 573 20 Balance Sheet Cash Accounts Payable Fund Balance Reserved for Encumbrances Unreserved Total Liabilities and Fund Balance $172 $ 50 $ 20 102 $172 Granof Test Bank Chapter 3 Page 18 Problem 3 (a) Encumbrances Fund Balance (b) Estimated Revenue Fund Balance Appropriations (c) Expenditures Cash Reserve for Encumbrances Encumbrances (d) Encumbrances Reserve for Encumbrances (e) Expenditures Cash (f) Expenditures Cash Reserve for Encumbrances Encumbrances (g) Cash Revenues $150 $150 800 50 750 135 135 150 150 120 120 600 600 75 75 70 70 810 810 Problem 4 Actual (Budget Basis) Property Tax Revenue $ 710 Other Revenue 550 Total Revenue $1260 Expenditures Encumbrances 1150 Supplies Excess of Revenues Over Expenditures $ 110 Adjustments -$50 +40 Actual (GAAP Basis) $ 700 550 $1250 1115 $ 135 +$30 +$ 5 -$50 -$20 Granof Test Bank Chapter 3 Page 19 Problem 5 1. Journal entries: 2006 (a) Cash Bond proceeds To record the issuance of the bonds $350 $350 (b) Encumbrances $350 Reserve for encumbrances To encumber the cost of constructing the convention center (c) Expenditure Accounts Payable To record the construction expenditure $115 $350 $115 Reserve for encumbrance $115 Encumbrances $115 To reverse the encumbrance entry for the portion of the contract completed (d) Accounts Payable Cash To record the cash payment Closing entries2006: Fund balance Expenditures Encumbrances To close expenditures and encumbrances Bond Proceeds Fund balance To close bond proceeds 2007 (e) Expenditures Accounts payable To record the construction expenditure (f) Accounts payable Cash To record the cash payment $190 $190 $190 $190 $350 $115 235 $350 $350 $115 $115 Granof Test Bank Chapter 3 Page 20 Closing entries2007: Reserve for encumbrance Expenditures To close expenditures 2008 (g) Expenditures Accounts payable To record the construction expenditure $ 50 $ 50 $190 $190 Note: Some governments would require an approved revenue source and a legislative appropriation before authorizing the cost overrun. (h) Cash Transfer-in from general fund To record transfer of cash from general fund (i) Accounts payable Cash To record the cash payment Closing entries2008: Reserve for encumbrance Fund balance Expenditures To close expenditures Transfer-in from general fund Fund balance To close the transfer-in account 2. $ 45 5 $ 50 $ 5 $ 5 $ 5 $ $ 50 $ 50 5 The transfer from the general fund would, of course, be recorded in the general fund. The construction in process, and the completed convention center would be recorded in the schedule of general fixed assets and in the government-wide statement of net assets. The bonds payable would be recorded in the schedule of general long-term debt and in the government-wide statement of net assets. Granof Test Bank Chapter 3 Page 21 Problem 6 1. Journal Entries Year 2006 Fund balance $6.0 Appropriations To record the budget (that is, appropriate the required resources) Encumbrances Reserve for encumbrances To encumber the estimated cost of repairs Expenditures Cash To record repairs expenditures $6.0 $6.0 $5.2 $5.2 $6.0 Reserve for encumbrances $5.0 Encumbrances $5.0 To reverse the encumbrances upon recognition of the repairs expenditure ($3.0 on Main Street and $2.0 on Koeller Avenue.) Appropriations $6.0 Fund balance 0.2 Encumbrances Expenditures To close the appropriation, expenditure and encumbrance accounts Year 2007 Fund balance $1.0 Appropriations $1.0 To record the budget (that is, reappropriate the funds to complete the repairs on Koeller Avenue) Encumbrances Fund balance To restore the encumbrances of the prior year Expenditures Cash To record remaining repairs expenditures $1.0 $1.0 $0.7 $0.7 $1.0 5.2 Reserve for encumbrances $1.0 Encumbrances $1.0 To reverse the encumbrances for the entire remaining balances in the encumbrance and reserve for encumbrance accounts. Granof Test Bank Chapter 3 Page 22 Appropriations Expenditures Fund balance To close the appropriation and expenditure accounts $1.0 $0.7 0.3 2. The balance in the fund balance account is $4.1 million equal to the initial fund balance of $10.0 million less total repair expenditures of $5.9 million ($3.2 million on Main Street plus $2.7 million on Koeller Avenue). Granof Test Bank Chapter 3 Page 23 Problem 7 1. Cash Accrual (in thousands) Revenues: Government grants Private contributions $7,000 575 7,575 $6,700 530 7,230 Expenditures Research Furniture and equipment/Depreciation Building/Depreciation Wages and salaries Claims and judgments Other operating costs 7,000 70* 40 340 0 90 7,540 $ 35 7,000 100 0 335 75 80 7,590 ($ 360) Excess of revenues over expenditures * ($100,000+$250,000)/5 = $70,000 The accrual-based budget better captures the long-term costs and provides a better match between revenues and costs. It measures both financial and economic resources. Yet the cash-based budget shows what is apparently a loss. Of the $7 million in planned expenditures for research, only $6.5 million will be matched by grant revenues. Similarly, the full cost of the new computers, which will last for 5 years, is reported as a cost in the year of acquisition. Internal managers will find the accrual-based budget useful in that it provides a long-term perspective on the institute and offers assurance that over an extended period the entity is covering its costs. Nevertheless, they would likely be more concerned with the cash-based budget. Organizations must pay their bills with cash. Most not-for-profits are engaged in a constant struggle to meet their day-to-day cash needs. Hence, managers are interested mainly in cash flows and see allocations of previous costs (i.e., depreciation) as being of little relevance to the decisions that they must make. 2. 3. Granof Test Bank Chapter 3 Page 24 Problem 8 (1) Estimated revenues $120 Fund balance To record the budget revenues (based on credits to fund balance) (2) Fund balance $115 Appropriations To record the budgeted expenditures (based on debits to fund balance) (3) Cash Revenues To record revenues (based on debits to cash) (4) Encumbrances $93 Reserve for encumbrances To record encumbrances (based on credits to reserve for encumbrances) (5) Expenditures $54 Vouchers Payable To record expenditures (based on credits to vouchers payable) $54 $93 $117 $117 $120 $115 (6) Reserve for encumbrances $58 Encumbrances $58 To reverse encumbrances (based on credits to encumbrances; note that the expenditures are only $54, indicating that the goods or services received cost less than the amount for which they were encumbered) (7) Vouchers payable $70 Cash To record payment of vouchers (based on debits to vouchers payable) $70 Granof Test Bank Chapter 3 Page 25 Problem 9 I. a). the encumbrance of the goods and services Encumbrances Reserve for encumbrances 11,900 11,900 b) the receipt of the goods and services assuming all invoices were paid in cash. Expenditures Cash Reserve for encumbrances Encumbrances II. 10,700 10,700 10,400 10.400 a) fund balance (unreserved) Beginning fund balance Revenues Expenditures Encumbrances Ending balance b) reserve for encumbrance balance $1,500 III. $ 1,200 12,000 ( 10,700) ( 1,500) $ 1,000 It is not the objective of a government to minimize expenditures; it is to provide services. A favorable expenditure budget variance may indicate that the government spent less than was appropriated and thereby thwarted the political process by not providing the services that were expected of it. (Obviously the variance could also indicate that the government provided the services expected of it but did so at less cost and hence more efficiently). Granof Test Bank Chapter 3 Page 26 ANSWERS TO ESSAYS (CHAPTER 3) 1. A government formally integrates the budget into the accounting system by making an entry that debits Estimated Revenues and credits Appropriations. The entry is balanced by a debit or credit to Fund Balance or Budgetary Fund Balance depending on whether the government is projecting an operating deficit or surplus. Generally revenue subsidiary ledgers have three columnsone for estimated revenue, one for actual revenue and one for the running balance. If the balance in the Revenue account is a debit balance, it means that actual revenues have been less than budgeted or estimated revenues. If the balance in the Revenue account is a credit balance, it means that actual revenues have exceeded the budgeted or estimated revenues. Generally the expenditure subsidiary ledgers have four columnsone for appropriations (authorized expenditures), one for actual expenditures, one for encumbrances, and one for the running balance. If the expenditures subsidiary ledger account has a credit balance, it means that there the entity still has spending authority. If the expenditures subsidiary ledger account has a debit balance, it means that the entity has overspent or overcommitted its spending authority. A government would integrate its budget into its accounting system as a control mechanism. The unencumbered account balances continuously reflect the remaining spending authority. Managers can easily see problem areas and concentrate their management efforts in managing the problem areas. 2. A government would budget on the cash basis because spending authority is based on cash. The government must pay its bills and make payments on prior commitments with cash. The government is concerned with its cash balance. Citizens generally do not like to give governments cash well in advance of the governments need for that cash. One example of expenditures that citizens may be reluctant to advance fund are those for accumulating vacation leave that will be taken in future periods. [AUTHORS NOTE: The examples that follow are not in the textbook and therefore most students will not refer to these example.] Two other examples include contributions to finance future employee retirement benefits and advance funding for costs to restore and monitor closed solid waste landfills. Advantages of cash basis budgets are few. They are easy for many people to understand. They serve as forecasts for cash receipts and disbursements and can highlight cash flow problems. The disadvantages are many. Cash budgets can understate the economic consequences of current actions by the government. [AUTHORS NOTE: The example that follows is not in the textbook and therefore most students will not refer to this example.] Many years ago, a large U.S. city accounted for its pension costs on the pay-as-you-go basis (cash basis). Because there were no current period effects of enhanced pension benefits, pension benefits were increased regularly. Then those employees retired and the increased cash burden on the municipality was tremendous. Cash-basis budgets and cash accounting permit manipulations. Governments can delay payment of bills to balance the budget in the current period. Similarly governments can create positive cash flows by advancing the due date of taxes or fees or by selling their own assets to newly created entities and leasing them back. These changes may have long-term adverse consequences. Granof Test Bank Chapter 3 Page 27 3. The original budget can, and frequently is, amended during the year to allow spending for unanticipated events. For some governments, the final budget incorporates changes (amendments) authorized only after the government knew that authorized revenues or expenditures had been lower than or higher than original budgeted amounts. If the actual amounts were only compared to the final (amended) budget amounts, the ability of the government to do a good job of budgeting would be camouflaged. 4. Appropriation budgets and related budgetary entries are intended mainly to help control expenditures to assure that governments do not spend more than was authorized in any particular year. Capital projects funds focus on controlling costs by project and may not be intended to control expenditures on the basis of periods. Moreover, necessary control can be adequately established by other means. The resources available for expenditure in a capital projects fund are normally either transferred-in from other funds or received as proceeds from bonds. Governments can control expenditures by limiting the amount of transfers in (through the budgets of the transferring funds) or by the amount of the bonds issued. 5. Flexible budgets are generally more appropriate for business-type activities because the level of their activity is driven by customer demand and can be expected to vary more widely. The level of government-type activities, by contrast, is often established by the budget. Like private enterprises, a governments business-type activities have both fixed and variable costs. 6. Favorable budget variances are not necessarily indicative of effective governmental management. The goal of a government is neither to maximize revenues nor to minimize expenditures. An excess of actual over budgeted revenues may be evidence that taxes were higher than necessary. An excess of budgeted over actual expenditures may denote that the quantity or quality of the services that the government provided were less than anticipated. 7. Budgetary entries have no effect on year-end financial statements. They are closed-out at year-end and not reported on either the balance sheet or operating statement. Encumbrances are also closed-out and have no effect on the operating statement. However, the related reserve for encumbrances is a reservation of fund balance and, accordingly, is reported on the balance sheet as part of fund equity. 8. There are four types of differences that can occurbasis of accounting, timing, perspective, and reporting entity differences. Basis of accounting differences arise when the government prepares its budget on a cash or other basis not consistent with the modified accrual basis accounting required for GAAP financial statements of governmental funds. Timing differences occur when governments appropriate resources for a particular project rather than for a particular period. In addition, governments may permit departments or functions to carry over resources not spent in one period to the next budgetary period. Granof Test Bank Chapter 3 Page 28 Perspective differences occur when governments prepare their budgets based on the types of functions or programs it plans to provide, not based on the funds in which these activities are reported (which could include several funds). Reporting entity differences occur when legally separate activities for which the government does not prepare a budget are required by GAAP to be included in the governments financial statements. 9. Unreserved fund balance is computed by rules of the GASB. These rules may differ from those applied by the government for purposes of budgeting. Hence, the reported fund balance, may not be indicative of the amount available for appropriation. For example, for purposes of reporting a government may not recognize an expenditure until supplies inventory is consumed. For purposes of budgeting, the expenditure may have to be recognized when supplies are purchased. Hence, insofar as there are supplies on hand (and the government does not established a reserve for them) the entire fund balance may not be available for appropriation. 10. The variance column will compare actual amounts with budgeted amounts per the final budget. Inasmuch as the budget can be amended until the last day of the year (and sometime even beyond), the probability of substantial variances is small. Granof Test Bank Chapter 3 Page 29

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Baltimore City - BUSI - 3888
Chapter 4 Recognizing Revenue in Governmental FundsTRUE/FALSE (CHAPTER 4) 1. If an entity elects to focus on all economic resources, then it should adopt a modified accrual basis of accounting. The budgetary measurement focus of governments is determined
Baltimore City - BUSI - 3888
Chapter 5 Recognizing Expenditures in Governmental FundsTRUE/FALSE (CHAPTER 5) 1. Expenditures are generally recognized when resources are acquired; expenses when resources are consumed. 2. Governmental fund liabilities are considered current only when t
Baltimore City - BUSI - 3888
Chapter 6 Accounting for Capital Projects and Debt ServiceTRUE/FALSE (CHAPTER 6) 1. The resources to service all general long-term debts of the governmental entity are typically accounted for in debt service funds. When governments establish capital proj
Baltimore City - BUSI - 3888
Chapter 7 Long-lived Assets and Investments in Marketable SecuritiesTRUE/FALSE (CHAPTER 7) 1. General capital assets are distinguished from the capital assets of proprietary funds and fiduciary funds. 2. General capital assets are excluded from governmen
Baltimore City - BUSI - 3888
Chapter 01 - Intercorporate Acquisitions and Investments in Other EntitiesCHAPTER 1 INTERCORPORATE ACQUISITIONS AND INVESTMENTS IN OTHER ENTITIES ANSWERS TO QUESTIONS Q1-1 Complex organizational structures often result when companies do business in a com
Baltimore City - BUSI - 3888
Chapter 02 - Reporting Intercorporate InterestsCHAPTER 2 REPORTING INTERCORPORATE INTERESTS ANSWERS TO QUESTIONS Q2-1 (a) An investment in the voting common stock of another company is reported on an equity-method basis when the investor is able to signi
Baltimore City - BUSI - 3888
Chapter 03 - The Reporting Entity and Consolidated Financial StatementsCHAPTER 3 THE REPORTING ENTITY AND CONSOLIDATED FINANCIAL STATEMENTS ANSWERS TO QUESTIONS Q3-1 The basic idea underlying the preparation of consolidated financial statements is the no
Baltimore City - BUSI - 3888
Chapter 04 - Consolidation of Wholly Owned SubsidiariesCHAPTER 4 CONSOLIDATION OF WHOLLY OWNED SUBSIDIARIES ANSWERS TO QUESTIONS Q4-1 An adjusting entry is recorded on the company's books and causes the balances reported by the company to change. Elimina
Baltimore City - BUSI - 3888
Chapter 05 - Consolidation of Less-Than-Wholly Owned SubsidiariesCHAPTER 5 CONSOLIDATION OF LESS-THAN-WHOLLY OWNED SUBSIDIARIES ANSWERS TO QUESTIONS Q5-1 The noncontrolling interest is reported as a separate item in the stockholders equity section of the
Baltimore City - BUSI - 3888
Chapter 06 - Intercompany Transfers of Services And Noncurrent AssetsCHAPTER 6 INTERCOMPANY TRANSFERS OF SERVICES AND NONCURRENT ASSETS ANSWERS TO QUESTIONS Q6-1 Profits on intercorporate sales generally are considered to be realized when the affiliate t
Baltimore City - BUSI - 3888
Chapter 07 - Intercompany Inventory TransactionsCHAPTER 7 INTERCOMPANY INVENTORY TRANSACTIONS ANSWERS TO QUESTIONS Q7-1 All inventory transfers between related companies must be eliminated to avoid an overstatement of revenue and cost of goods sold in th
Baltimore City - BUSI - 3888
Chapter 08 - Intercompany IndebtednessCHAPTER 8 INTERCOMPANY INDEBTEDNESS ANSWERS TO QUESTIONS Q8-1 A gain or loss on bond retirement is reported by the consolidated entity whenever (a) one of the companies purchases its own bonds from a nonaffiliate at
Baltimore City - BUSI - 3888
Chapter 09 - Consolidation Ownership IssuesCHAPTER 9 CONSOLIDATION OWNERSHIP ISSUES ANSWERS TO QUESTIONS Q9-1 Preferred stock of the subsidiary is eliminated in the consolidation process in a manner comparable to that used in eliminating the common stock
Baltimore City - BUSI - 3888
Chapter 10 - Additional Consolidation Reporting IssuesCHAPTER 10 ADDITIONAL CONSOLIDATION REPORTING ISSUES ANSWERS TO QUESTIONS Q10-1 The balance sheet, income statement, and statement of changes in retained earnings are an integrated set and generally n
Baltimore City - BUSI - 3888
Chapter 11 - Multinational Accounting: Foreign Currency Transactions And Financial InstrumentsCHAPTER 11 MULTINATIONAL ACCOUNTING: FOREIGN CURRENCY TRANSACTIONS AND FINANCIAL INSTRUMENTS ANSWERS TO QUESTIONS Q11-1 Indirect and direct exchange rates diffe
Baltimore City - BUSI - 3888
Chapter 12 - Multinational Accounting: Issues in Financial Reporting and Translation of Foreign Entity StatementsCHAPTER 12 MULTINATIONAL ACCOUNTING: ISSUES IN FINANCIAL REPORTING AND TRANSLATION OF FOREIGN ENTITY STATEMENTS ANSWERS TO QUESTIONS Q12-1 Ex
Baltimore City - BUSI - 3888
Chapter 13 - Segment and Interim ReportingCHAPTER 13 SEGMENT AND INTERIM REPORTING ANSWERS TO QUESTIONS Q13-1 Information on a company's operations in different industries would be helpful to investors in their assessments concerning the different profit
Baltimore City - BUSI - 3888
Chapter 14 - SEC ReportingCHAPTER 14 SEC REPORTING ANSWERS TO QUESTIONS Q14-1 The basis of the SEC's legal authority to regulate accounting principles stems from the Securities Exchange Act of 1934. In the 1934 Act, the SEC was given the legal responsibi
Baltimore City - BUSI - 3888
Chapter 15 - Partnerships: Formation, Operation, and Changes in Membership1 CHAPTER 15 PARTNERSHIPS: FORMATION, OPERATION, AND CHANGES IN MEMBERSHIP ANSWERS TO QUESTIONS Q15-1 Partnerships are a popular form of business because they are easy to form (inf
Baltimore City - BUSI - 3888
Chapter 16 - Partnerships: Liquidation1 CHAPTER 16 PARTNERSHIPS: LIQUIDATION ANSWERS TO QUESTIONS Q16-1 The major causes of a dissolution are: a. b. c. d. e. Withdrawal or death of a partner The specified term or task of the partnership has been complete
Baltimore City - BUSI - 3888
Chapter 17 - Governmental Entities: Introduction and General Fund AccountingCHAPTER 17 GOVERNMENTAL ENTITIES: INTRODUCTION AND GENERAL FUND ACCOUNTING ANSWERS TO QUESTIONS Q17-1 A fund is an independent fiscal and accounting entity with a self-balancing
Baltimore City - BUSI - 3888
Chapter 18 - Governmental Entities: Special Funds and Government-Wide Financial Statements1 CHAPTER 18 GOVERNMENTAL ENTITIES: SPECIAL FUNDS AND GOVERNMENT-WIDE FINANCIAL STATEMENTS ANSWERS TO QUESTIONS Q18-1 A governmental entity would use a special reve
Baltimore City - BUSI - 3888
Chapter 19 Not-for-Profit EntitiesCHAPTER 19 NOT-FOR-PROFIT ENTITIES ANSWERS TO QUESTIONS Q19-1 Initially, tuition scholarships are included in revenue for the period in order to measure fully the revenue obtainable. If the university requires an employm
Baltimore City - BUSI - 3888
Chapter 20 - Corporations in Finanacial Difficulty1 CHAPTER 20 CORPORATIONS IN FINANCIAL DIFFICULTY ANSWERS TO QUESTIONS Q20-1 The nonjudicial actions available to a financially distressed company are debt restructuring arrangements and creditor's commit
Baltimore City - BUSI - 3888
Chapter 8 Long-term ObligationsTRUE/FALSE (CHAPTER 8) 1. Unlike individuals and businesses, governments cannot seek protection under the Federal Bankruptcy Code. 2. General obligation debt is the obligation of the government at large and is thereby backe
Baltimore City - BUSI - 3888
Chapter 9 Business-Type ActivitiesTRUE/FALSE (CHAPTER 9) 1. In both the fund statements and the government-wide statements, business-type activities and internal service funds are on a full accrual basis, and their measurement focus is on all economic re
Baltimore City - BUSI - 3888
Chapter 10 Fiduciary Funds and Permanent FundsTRUE/FALSE (CHAPTER 10) 1. 2. Per GASB Statement No. 34, permanent funds are classified as fiduciary funds. In accounting for permanent funds only the income can be spent; the principal must be preserved inta
Baltimore City - BUSI - 3888
Chapter 11 Issues of Reporting, Disclosure, and Financial AnalysisTRUE/FALSE (CHAPTER 11) 1. Governments must combine their blended component units into both the fund and government-wide statements. Governments must combine their discretely presented com
Baltimore City - BUSI - 3888
Chapter 12 Not-for-Profit OrganizationsTRUE/FALSE (CHAPTER 12) 1. FASB Statement No. 117 directs that revenues and expenses be reported in a statement of financial position. 2. In the statement of activities, FASB Statement No. 117 requires revenues to b
Baltimore City - BUSI - 3888
Chapter 13 Health Care Providers and Colleges and UniversitiesTRUE/FALSE (CHAPTER 13) 1. The statement of financial position of a not-for-profit health care organization should distinguish among unrestricted, temporarily restricted, and permanently restr
Baltimore City - BUSI - 3888
Chapter 14 Managing for ResultsTRUE/FALSE (CHAPTER 14) 1. Zero-based budgeting requires the periodic review of all programs, not just new ones. 2. It is difficult for accountants to have a role beyond auditing the financial statements of governments and
Baltimore City - BUSI - 3888
Chapter 15 Auditing Governments and Not-For-Profit OrganizationsTRUE/FALSE (CHAPTER 15) 1. A cognizant agency can be either an employee of a federal agency or of an independent accounting firm. 2. The Single Audit Act of 1984 was passed to eliminate the
Baltimore City - BUSI - 3888
atement of net cost are prepared on the full accrual to reported on both the accrual and the cash basis of social security) to beneficiaries are recognized only ebt guarantees when it is probable that borrowers will lized and depreciated until war is decl
University of Texas - BIO - Genetics
Chi Square: Sorry if this was confusingin two places I have used the word null where it should read alternative referring to the hypothesis being tested. Lecture 7, slide 26 (last sentence, accept alternative not null) and slide 29 (last sentence, accept
University of Texas - BIO - Genetics
Population of cells with a CF = 40% chiasma frequency.XXXXGametes produced by these 10 meiotic cells are: Cells with crossing-over: [AB: Ab: aB : ab (1:1:1:1) ] x 4 (for 4 cells) Cells without crossing-over: [AB x 2 and ab x 2 (per each cell)] X 6 (f
University of Texas - BIO - Genetics
Genetics - BIO325 Discussion questions 41.What are the three enzyme activities present in E. coli DNA polymerase I? 1. 5' to 3' polymerasing activity filling in gap left by RNA primer 2. 3' to 5' exonuclease activity - proofreading 3. 5' to 3' exonuclea
University of Texas - BIO - Genetics
Discussion questions 6 1. The following diagram shows a protein-coding gene and specifies the positions of its translational start and stop signals:Which of the following is correct? A) The upper strand is the template, with the carboxy terminus of the p
University of Texas - BIO - Genetics
Discussion questions 4 1. Transcription of gene A takes place from left to right. Transcription of gene B takes place from right to left. Which strand of DNA (top or bottom) as shown in the following figure serves as the template for transcription of each
University of Texas - BIO - Genetics
Discussion questions 2 1. Huntington's disease is inherited as an autosomal dominant trait. A woman whose great-grandfather had Huntington's disease marries and is considering having a child. Both her father and grandfather were killed in wars while in th
University of Texas - BIO - Genetics
Discussion questions 3 1. In humans, the three alleles IA, IB, and i constitute a multiple allelic series that determines the ABO blood group system. In the following examples, state (yes or no) whether the child mentioned can be produced from the marriag
University of Texas - BIO - Genetics
BIO325 GeneticsDiscussion sheet 1 1. The diagram below depicts Mendel's law of independent assortment. Horizontal lines represent homologous chromosomes, vertical lines represent the same locus in the two homologous chromosomes, letters (A, B, a, b) are
University of Texas - BIO - Genetics
Charles Darwin Long before the publication of Darwins Origin of Species in 1859, biologists agreed that new species arise through evolution from older speciesDarwin formalized the theory of how this evolution takes place. He proposed that succeeding gener
University of Texas - BIO - Genetics
NAME: BIO325Genetics Instructor:Dr.TraceyRuhlman TA:TeofilNakov Exam1Key1MULTIPLE CHOICE 1 POINT EACH: Please choose only one response, WRITE YOUR LETTER RESPONSE AT THE LEFT BELOW THE QUESTION NUMBER. 1. An allele of a gene is best described as: a) A h
University of Texas - BIO - Genetics
BIO325 Genetics Instructor: Dr. Tracey Ruhlman TA: Teofil NakovExam 3MULTIPLE CHOICE 2 POINTS EACH: Please choose only one response, WRITE YOUR LETTER RESPONSE AT THE LEFT BELOW THE QUESTION NUMBER. 1) If you had a mutation affecting anterior-posterior
University of Texas - BIO - Genetics
Exam Result Analysis Name _Course _ Exam _Review your errors on the exam and fill in the chart below with the numbers of the questions you missed. Put a cross under the type of mistake you made, and total the crosses in each column. Note that more than o
University of Texas - BIO - Genetics
Exam Correction and Analysis 1) Go through your exam and enter the number of each question for which you lost points in the Question column on the chart. Be sure to separate questions with multiple parts. For example, if question 5 has three parts (a,b,c)
University of Texas - BIO - Genetics
EXAMPLEQUIZBIO325Genetics Instructor:Dr.TraceyRuhlman TA:TeofilNakovPointsaregiveninparenthesesaftereachquestion.Totalpoints=20.1. StatethenumberofnuclearDNAmolecules(=chromatids)percellforeachofthefollowing stagesinthelifecycleofadiploid,2n=24organism.
University of Texas - BIO - Genetics
AAAaAaaaEach genotype is We often show this as , , adding the two heterozygotes to .howtopredictprobabilitythatindividualAisaheterozygote:weknowshesnotarecessivehomozygote(notaffected)sotakethisoutofthepicture: AA AaAaNowthere3totalgenotypestocons
University of Texas - BIO - Genetics
Exam2 Instructor:Dr.TraceyRuhlman TA:TeofilNakov MULTIPLE CHOICE 2 POINTS EACH: Please choose only one response, WRITE YOUR LETTER RESPONSE AT THE LEFT BELOW THE QUESTION NUMBER. 1. Which of the following components of telomerase is primarily responsible
University of Texas - BIO - Genetics
Lecture 1Introduction and Review.Lecture 1Day/date ThursAug 27Chapter 1 1 2 2 3 3/6 4 7 15/16 15/16 8/10-11 8/10-11 8 9 12 13 3.5 18&19 18&19Quiz 1 will be given in class Tues Sept 8No discussion section Nov 25 happy turkey day.2 Tues Sept 1 3 Thu
University of Texas - BIO - Genetics
Lecture 2Methods in Genetic AnalysisOutline Tools for genetic analysis DNA isolation and analysis PCR and Sequencing Genomic or cDNA libraries Cloning Probing (clones or isolated DNA) mRNA (expression) Proteins immunodetection western blottingAgaros
University of Texas - BIO - Genetics
Lecture 3Mendels Laws and Single gene inheritanceGregor MendelBetween 1856 and 1863, he cultivated and tested some 29,000 pea plants.Mendels first law: The law of equal segregation.The two members of a gene pair (alleles) segregate from each other du
University of Texas - BIO - Genetics
Lecture 4Sex linked single gene inheritance Introduction to pedigrees Mendels Second LawMany plants and animals exhibit sexualdimorphism. Individuals are either male or female as a result of inheriting either an X or Y chromosome paternally. X and Y chr
University of Texas - BIO - Genetics
Lecture 5Working with independent assortmentAsthenumberoflociincrease,thePunnett approachbecomescumbersome Branchdiagrams?(argh!) Statisticalrulescanbeappliedtopredict genotypes ForexampletheeverusefulPRODUCTRULEWhat proportion of progeny will be of a
University of Texas - BIO - Genetics
Lecture 6Gene interaction Variations on dominanceComplete dominance Dominant negative Incomplete dominance Codominance Multiple alleles Recessive lethal alleles Gene interaction in pathways Complementation testing Double mutants of random mutations (var
University of Texas - BIO - Genetics
From TuesdayRecessive lethal allele: Coat color in mice: the yellow phenotype (Y) is a dominant mutationthe mutant phenotype is seen in heterozygote. BUT: the lethality factor inherent in the Y allele is only observed in the homozygote (Y/Y), or rather i
University of Texas - BIO - Genetics
Lecture 8DNA replicationOUTLINE DNA: the genetic material DNA structure Semiconservative replication Overview of DNA replication The replisome: a remarkable replication machine Replication in eukaryotic organisms Telomeres and telomerase: replication t
University of Texas - BIO - Genetics
Lecture 9 Mechanisms of spontaneous mutation and repairMechanisms of spontaneous mutation errors in dna replication transition transversion indels spontaneous lesions/apurinic sites Repair Mismatch repair Base excision repair Nucleotide excision repair D
University of Texas - BIO - Genetics
Lecture 10 Transposable ElementsKernels on an ear of cornThe maize kernel is not merely a seed but a one-seeded fruit comprised of many cells.Transposons, transposable elements, mobile elements Segments of DNA that can move around to different genomic
University of Texas - BIO - Genetics
Lecture 11 Large scale chromosomal changesTypes of chromosome mutationsChromosome mutations may be viewed as two classes: change in structure: result in novel sequence arrangements. change in number: structure is unchanged the number DNA molecules (chro
University of Texas - BIO - Genetics
Lecture 12 Transcription and RNA Processing We have seen already that genes contain exons (expressed regions) and introns (intervening regions). Genes (DNA) are transcribed into RNA. RNA is processed to remove introns by the splicosome. Alternative splic