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Exam 19: An Introduction to Accounting for State and Local Governmental Units

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Question 1

Multiple Choice

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What funds are reported in Government-wide financial statements?

A) Governmental only
B) Proprietary only
C) Governmental and proprietary
D) Governmental,proprietary and fiduciary

E) A) and C)
F) B) and C)

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C

Question 2

Multiple Choice

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Centralized data processing,central motor pools and garages,centralized risk-financing activities,and central stores typically would be accounted for using what type of fund?

A) An agency fund
B) An enterprise fund
C) An internal service fund
D) A trust fund

E) B) and C)
F) A) and D)

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Question 3

Multiple Choice

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Approved or authorized expenditures that provide legislative control over the expenditure budget are referred to as

What basis of accounting is used to prepare Government-wide financial statements?

Using the revenue types shown below,match each of the revenue sources to a revenue type.Each revenue type may be used more than once. A.Derived Tax Revenues B.Imposed Nonexchange Revenues C.Government-Mandated Nonexchange Transactions D.Voluntary Nonexchange Transactions _____1.Corporate income tax _____2.Sales taxes _____3.Liquor taxes _____4.Fines and penalties paid to a government entity _____5.Cigarette taxes _____6.Personal income tax _____7.Donation made to a government entity _____8.Motor fuel tax _____9.Property tax

Government-wide financial statements exclude the

The following are transactions for the city of Salem. a.Incurred salaries of $44,000 to be paid next month. b.Tax bills totaling $500,000 mailed to city residents. c.Paid salaries above. d.Computer equipment received in the amount of $11,000,to be paid in 30 days. Required: Analyze the above transactions by using the accounting equation for a governmental fund.

Internal Service Funds differ from Enterprise Funds because Internal Service Funds

The following are transactions for the city of Greenville. a.Issued $50,000 10-year bonds. b.Used $30,000 of the cash to buy a truck. c.Sold the truck that was replaced which had cost $28,000,for $2,000.The old truck was fully depreciated.Residual value is zero. d.Computed depreciation on the new truck for the year of $6,000. Required: Analyze the above transactions by using the accounting equation for a governmental fund.

The accounting equation for an agency fund is

The following are transactions for the city of Greenville. a.Issued $50,000 10-year bonds. b.Used $30,000 of the cash to buy a truck. c.Sold the truck that was replaced which had cost $28,000,for $2,000.The old truck was fully depreciated.Residual value is zero. d.Computed depreciation on the new truck for the year of $6,000. Required: Analyze the above transactions by using the accounting equation for a proprietary fund.

Match each of the following fund types to one of the following three fund categories as indicated.Each fund category may be used more than once. A.Governmental Fund B.Proprietary Fund C.Fiduciary Fund _____1.Debt Service Fund _____2.Internal Service Fund _____3.Agency Fund _____4.General Fund _____5.Permanent Fund _____6.Enterprise Fund _____7.Capital Projects Fund _____8.Trust Fund _____9.Special Revenue Fund _____10.Pension Fund

The accounting equation for a governmental fund is

The following are transactions for the city of Springfield. a.Borrowed $20,000 by issuing a three-month,5% note. b.Paid $4,000 for equipment. c.Services for $1,000 were billed and collected. d.Year-end accrual of 3 months interest on note in (a). Required: Analyze the above transactions by using the accounting equation for a governmental fund.

For each of the following events or transactions,identify the fund or funds that will be affected. 1.A city government provides electricity services to residents for a fee. 2.A printing shop was established to handle the printing needs of a county government. 3.A philanthropist donates $1 million for zoo maintenance,only earnings can be used. 4.A city government collects sales taxes on behalf of the state and for some of its counties and municipalities. 5.Interest is paid on a state government's general obligation bonds.

The following are transactions for the city of Salem. a.Incurred salaries of $44,000 to be paid next month. b.Tax bills totaling $500,000 mailed to city residents. c.Paid salaries above. d.Computer equipment received in the amount of $11,000,to be paid in 30 days. Required: Analyze the above transactions by using the accounting equation for a proprietary fund.

Identify the fund type of the fund being described. 1.A fund used to account for the external portion of investment pools reported by the sponsoring government. 2.A fund used to account for resources that are legally restricted to use of the earnings only for government programs or activities. 3.A fund used to account for resources used to pay for a new stadium. 4.A fund used to account for local taxes withheld on behalf of another county. 5.A fund used to account for resources used to pay interest on a long-term bond issue. 6.A fund used to account for specific revenues that are restricted in use. 7.A fund used to account for the local swimming pool that is owned by the city and used by residents for a membership fee. 8.A fund used to account for the centralized data processing services of the state government. 9.A fund used to account for all funds except those required to be accounted for in another fund. 10.A fund that accounts for government pension plans if the government is the trustee

For each of the following transactions that could be introduced to fund the maintenance of the city park,state the type of fund(s)that would be affected.Assume that a capital project fund will be used to handle any long-term improvements or additions to the park. 1.Resources used to make 60 monthly installments on outstanding long-term debt. 2.Implemented a tax on alcohol purchases specifically designated for the park upkeep. 3.A local sports organization that uses the park raises funds and donates the money,stating that the principal may not be spent,but designating earnings to the park upkeep. 4.City council approves the funds from existing resources for the upkeep required in the upcoming year. 5.Resources used only to pay principal and interest of debt outstanding to finance park maintenance.

For each of the following events or transactions,identify the type of fund(s)that will be affected. 1.A central purchasing department was established to handle all the purchasing needs of a county government. 2.A county government levies sales taxes restricted as to use for job creation. 3.A county government receives a large contribution specifying that income from the contribution be distributed each year to the county zoo.The principal is to remain intact indefinitely. 4.A city government paid construction costs of $12,000 on city hall building. 5.A city government paid general operating costs.

A comprehensive annual financial report has the following three major sections: