. Several years ago a city provided for the establishment of a sinking fund to retire an issue of general obligation bonds. This year the city made $50,000 contribution to the sinking fund from general revenues and realized $15,000 in revenue from securities in the sinking fund. The bonds due this year were retired. Those transactions require accounting recognition in
A. the general fund, capital projects fund, and general long-term debt group of accounts;
B. a debt service fund, capital projects fund, and the general long-term debt group of accounts;
C. a debt service fund, the general fund, and the general long-term debt group of accounts;
D. a capital projects fund, a debt service fund, and the general fund
8. If an accounting principle conflicts with a legal principle, which of the following occurs?
A. The accounting principle takes principle takes precedence;
B. The legal principle takes precedence;
C. No modification is needed;
D. The accounting principle is modified to reflect the legal principle.
9. Capital projects funds are used to account for the receipt and ultimate disbursement of dollars to be used for all acquisitions of capital facilities except those financed by
A. special revenue and trust funds;
B. enterprise funds and funds limited by administrative action to a single purpose;
C. debt service funds and funds which provide intergovernmental services;
D. special assessment funds and funds whereby the costs involved are paid by charges to the user of the service.
10. If an expendable fund disburses $400 for the purchase of a machine, the account debited will be
A. Expenditures C. Cash.
B. Machinery D. Accumulated Depreciaition
QUESTIONS 11 AND 12 ARE BASED ON THE FOLLOWING DATA:
The city of Rio established a Special Revenue Fund on December 1, 19x7 with estimated revenues of $500,000 and appropriations of $400,000.
The following transactions took place the year ended November, 30, 19x8
1) A tax levy of $450,000 was made, and 90% of it is considered collectible.
2) Tax collections of $400,000 were made.
3) A loan of $75,000 was received from the general fund.
4) Other revenues of $85,000 were collected.
5) Purchase orders totaling $375,000 were placed with suppliers.
6) Vouchers payable of $350,000 were authorized and paid. The full amount had previously been encumbered.
11. The total of the assets on the balance sheet of November 30, 19x8 is
A. 215,000 C. 410,000
B. 260,000 D. 490,000
12. The balance of the Fund Balance account, on the balance sheet of November
30, 19x8, is
A. 45,000 C. 205,000
B. 115,0000 D. 265,000
13. The fund concept always involves
A. an accounting segregation
B. a physical segregation of resources
C. separate bank accounts
D. separate agencies
14. An expendable fund sells for $200 some equipment that has a book value of $150. The journal entry in the expendable fund would include a $200 debit to "cash" and a $200 credit to
A. gain on sale of equipment
C. accumulated depreciation
D. other revenue
15. Commitments against approved appropriations are referred to as
A. expenditures C. encumbrances
B. revenues D. payables
16. A city's general fund budget for the forthcoming fiscal year shows estimated revenues in the excess of appropriations. The initial effect of recording this will result in an increase in
A. taxes receivable;
B. fund balance;
C. reserve for encumbrances;
17. The operations of a municipal swimming pool that receives the majority of its support from charges to users should be accounted for in
A. a special revenue fund;
B. the general fund;
C. the intergovernmental service fund;
D. an enterprise fund
18. The sequence of entries indicates that
A. an adverse event was foreseen and a service of $12,000 was created; later the reserve was canceled and a liability for item was acknowledged.
B. an order was placed for goods or services estimated to a cost of $12,000; the actual was $12,350, for which a liability was acknowledged upon receipt.
C. encumbrances were anticipated but later failed to materialize and were reversed; a liability of $12,350 was incurred.
D. The first entry was erroneous and was reserved; a liability of $12,350 was acknowledged.
19. Assuming appropriate governmental accounting principles were followed, the entries
A. occurred in the same fiscal period.
B. did not occur in the same fiscal period.
C. could have occurred in the same fiscal period, but it is impossible to be sure of that.
D. would have reflected the equivalent of a "prior period adjustment" if the entity concerned had been operated for profit
20. Immediately after entry 1 was recorded, the municipality had a balanced general fund budget for all transactions. Recording entries 2 and 3 would
A. not affect the current budget but would affect the budget of the following fiscal period.
B. not change the balanced condition of the budget.
C. cause the municipality to show a deficit.
D. C. cause the municipality to show a surplus.