Exam 3 Flashcards

Terms Definitions
Combining Enterprise Fund statements in the CAFR are required to include at a minimum:A. Each individual Enterprise FundB. Each individual major Enterprise FundC. Each individual nonmajor Enterprise FundD. Each individual Enterprise Fund used to account f
C. Each individual nonmajor Enterprise Fund
The city of Philaburg arranged for a 10-year, $40 million loan to finance construction of a toll bridge over the Tradewater River. If the toll bridge is accounted for as an Enterprise Fund activity and a certain portion of the tolls collected is required
C. The Toll Bridge Enterprise Fund
Which of the following activities is not commonly accounted for in an Internal Service Fund?A. Self-insuranceB. Central garageC. Landfill operationsD. Warehouse facilityE. All of the above
C. Landfill operations
What method of accounting does GAAP require for inventories in an Internal Service Fund?A. Consumption methodB. Purchases methodC. Acquisition methodD. All of the above are acceptable accounting methodsE. Items A and B only
A. Consumption method
The city of Silerville operates a water authority that sells water to city residents. Each new customer is required to pay a $75 deposit at the time of hookup. The deposit cannot be spent, but is returned with interest if the customer maintains a satisf
B. As restricted cash and a liability payable from restricted assets in the Water Fund
Which of the following statements must be prepared for Agency Funds as part of a government’s Basic Financial Statements?A. Statement of changes in net assetsB. Statement of revenues, expenditures, and changes in fund balancesC. Statement of net assetsD
C. Statement of net assets
Internal Service Funds are required to be reported in the basic financial statements:A. By major fundB. By fund typeC. As governmental fundsD. As either governmental or proprietary funds, depending on the nature of the Internal Service Fund
B. By fund type
Employer governments must measure their annual pension contribution:A. By using a standardized approachB. In accordance with certain guidelines, but not in a standardized wayC. By using the unit credit methodD. None of the above
B. In accordance with certain guidelines, but not in a standardized way
In the government-wide financial statements, activities of an Internal Service Fund are:A. Reported either as governmental activities or business-type activities, depending on the fund’s primary customer baseB. Never reported as either governmental acti
A. Reported either as governmental activities or business-type activities, depending on the fund’s primary customer base
GAAP require which of the following statements to be prepared for an Internal Service Fund?A. Statement of net assetsB. Statement of budgetary complianceC. Statement of cash flowsD. All of the above are required statementsE. Items A and B onlyF. Items A a
F. Items A and C only
Employer governments must measure their annual pension contribution:A. By using a standardized approachB. In accordance with certain guidelines, but not in a standardized wayC. By using the unit credit methodD. None of the above
B. In accordance with certain guidelines, but not in a standardized way
Which of the following transactions would not be allowed in an Internal Service Fund?A. The purchase of capital itemsB. Borrowing from another fundC. Transfers from other fundsD. None of the above
D. None of the above
The accounting and financial reporting concepts are virtually the same for which of the following fund types?A. Permanent Funds and Agency FundsB. Permanent Funds and Pension Trust FundsC. Pension Trust Funds and Investment Trust FundsD. Private-Purpose T
C. Pension Trust Funds and Investment Trust Funds
Which method of cash flow reporting is used to report operating activities?A. Indirect methodB. Either the indirect or direct method, depending on the method chosen for the government’s Enterprise FundsC. Cash flow reporting is optional for Internal Ser
D. Direct method
When a Tax Agency Fund is used, the governmental funds in which the taxes should ultimately be accounted for should report tax revenues:A. When leviedB. When received by year end or not more than 60 days thereafterC. In the year for which the taxes are le
D. When both B and C are true
Which of the following accounts typically would be used by an Agency Fund?A. Notes receivableB. Bonds PayableC. RevenueD. Cash
D. Cash
Depreciation expense on all of an Enterprise Fund’s capital assets must be reported as expenses in the fund’s operating statement. However, expenditures to maintain certain capital assets may be expensed in lieu of reporting depreciation. These capi
A. Infrastructure capital assets that meet the modified approach requirements established by GASB Statement No. 34
Enterprise Fund resources of $3,000,000 are paid yearly to the General Fund. If these payments are payments in lieu of taxes (not payments for services), they should be recorded in the Enterprise Fund as:A. ExpensesB. Reductions of revenuesC. Transfers o
C. Transfers out
Enterprise Fund transfers are reported in an Enterprise Fund’s operating statement for:A. “free” services provided to other departmentsB. Capital assets transferred in from other governments without compensationC. Interfund loans that are not to be
A. “free” services provided to other departments
The fund equity of an Enterprise Fund could include any of the following except:A. Invested in capital assets, net of related debtB. Fund balanceC. Restricted net assetsD. Unrestricted net assetsE. All of the above
B. Fund balance
Which of the following statements about a Private-Purpose Trust Fund is false?A. The principal in a Private-Purpose Trust Fund, similar to a Permanent Fund, must be nonexpendable in natureB. The principal in a Private-Purpose Trust Fund may be either exp
A. The principal in a Private-Purpose Trust Fund, similar to a Permanent Fund, must be nonexpendable in nature
Expenditures for an Agency Fund are recognized in the period in which:A. The fund incurs a liabilityB. The fund pays the amount owed for the expenditureC. The expenditure is incurredD. None of the above
D. None of the above
Which of the following statements about a Pension Trust Fund Statement of Plan Net Assets is not true?A. Investments are reported at fair valueB. Capital assets are reportedC. The actuarial present value of future benefits payable is reported as a liabili
C. The actuarial present value of future benefits payable is reported as a liability, not as an equity component
Which of the following statements about accounting principles used in Enterprise Funds is false?A. Enterprise Funds may adopt budgets on a basis of accounting contrary to GAAPB. An Enterprise Fund’s statement of cash flows is prepared in the same format
B. An Enterprise Fund’s statement of cash flows is prepared in the same format as a statement of cash flows for a private-sector entity
Which of the following statements is not required to be presented for an investment trust fund?A. Statement of net assetsB. Statement of changes in net assetsC. Statement of cash flowsD. All of the above
C. Statement of cash flows
All Enterprise Fund transfers are reported in an Enterprise Fund’s operating statement:A. Nonoperating revenuesB. Other Financing SourcesC. Special ItemsD. None of the above
D. None of the above
The long-term debt issued for a special assessment project for which the government is not obligated in any manner should be reported by the government in:A. An Agency FundB. A Capital Projects FundC. A Debt Service FundD. The General Long-Term Liabilitie
E. None of the above
Which of the following activities would be least likely to be operated as and accounted for in an Enterprise Fund?A. Town planning departmentB. Sports stadiumC. Parking garageD. Mass transit authority
A. Town planning department
Which of the following accounts would not typically be reported on the operating statement of an internal service fund?A. Salaries and wages expenseB. Supplies expenseC. Depreciation expenseD. Maintenance expenseE. All of the above are typical expenses fo
E. All of the above are typical expenses for internal service funds.
Which of the following statements must be prepared for Agency Funds?A. Statement of changes in nets assets.B. Statement of revenues, expenditures, and changes in fund balances.C. Statement of net assets.D. Statement of changes in agency fund assets and li
E. Both c and d.
Which of the following equity classifications is not commonly reported for an Internal Service Fund?A. Retained earningsB. Invested in capital assets, net of related debtC. Restricted net assetsD. Unrestricted net assetsE. All of the above classifications
A. Retained earnings
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