Professional Documents
Culture Documents
Multiple Choice
1. Accounting for a Special Revenue Fund is most like the accounting for which of
the following?
a. the General Fund
b. an Internal Service Fund
c. a Pension Trust Fund
d. an Enterprise Fund
Answer: a
Answer: c
3. What is the difference between the terms budgetary fund balance and unreserved
fund balance?
a. budgetary fund balance is reserved; unreserved fund balance is not
reserved
b. budgetary fund balance is permanent in nature; unreserved fund balance is
temporary
c. budgetary fund balance is the anticipated change in fund balance as a
result of adopting the budget; unreserved fund balance is the actual
difference between assets and liabilities
d. budgetary fund balance can be appropriated; unreserved fund balance
cannot
Answer: c
4. A local government always will have
One or more
a General Fund Special Revenue Funds
a. yes no
b. no yes
c. no no
d. yes yes
Answer: a
Answer: b
6. Which line item does not properly belong in the balance sheet of a governmental
fund?
a. short-term investments
b. fixed assets
c. cash
d. accounts (or vouchers) payable
Answer: b
Answer: a
8. When a city borrows cash short-term in anticipation of the receipt of property tax
revenues, which account would it credit?
a. property taxes receivable
b. property tax revenues
c. estimated other financing sources
d. tax anticipation notes payable
Answer: d
9. At year-end, a city's expenditures exceed its revenues. When the accounts are
closed, which of the following entries will be made to record this fact?
a. a credit to Unreserved fund balance
b. a debit to Unreserved fund balance
c. a credit to Appropriations
d. a debit to Budgetary fund balance
Answer: b
10. Which of the following financial statements normally are prepared for the General
Fund?
operating balance cash flows
statement sheet statement
a. yes no yes
b. no yes yes
c. yes yes yes
d. yes yes no
Answer: d
Answer: d
12. A village derives about 5 percent of its General Fund revenues from traffic
violation fines. Violators of the law have 30 days to appeal the fines. Experience
shows that the village ultimately collects on about 75% of the violations. When
should the village recognize these revenues in the General Fund?
a. when the budget is prepared
b. at the beginning of the year, based on an estimate of collections
c. when the traffic violation tickets are issued
d. when the cash is collected
Answer: d
13. Which line item does not properly appear in the Statement of Revenues,
Expenditures, and Changes in Fund Balance ("operating statement") of a
governmental fund?
a. expenditures--debt service
b. expenditures--capital outlay
c. property taxes receivable
d. beginning fund balance
Answer: c
14. If the Budgetary fund balance account was debited when the budget was recorded
in the City of Ramville's General Fund, then
a. appropriations exceed estimated revenues
b. actual expenditures exceed appropriations
c. estimated revenues exceed appropriations
d. appropriations exceed actual revenues
Answer: a
Answer: c
Answer: b
17. Which of the following accounts properly would not appear in the General Fund's
closing entry at fiscal year end?
a. revenues
b. unreserved fund balance
c. taxes receivable
d. expenditures
Answer: c
18. If the Unreserved fund balance account of a Special Revenue Fund has a debit
balance at the end of the fiscal year, it means that
a. revenues are less than expenditures for the year
b. actual revenues are less than estimated revenues
c. total liabilities exceed total assets
d. expenditures consistently exceeded encumbrances
Answer: c
19. Within a city's General Fund, which source of revenues is least likely to be
accrued in advance of receipt in cash?
a. building inspection fees
b. property taxes
c. interest on investments
d. sales taxes
Answer: a
20. A county borrows cash on a short-term basis. Which of the following is the
proper account to be credited in this transaction?
a. tax anticipation notes payable
b. revenues from borrowing
c. appropriations--borrowed money
d. unreserved fund balance
Answer: a
21. Which of the following financial statements normally are prepared for a Special
Revenue Fund?
operating balance cash flows
statement sheet statement
a. yes yes no
b. no yes yes
c. yes yes yes
d. yes no yes
Answer: a
22. The accounting and financial reporting for the General Fund is least similar to that for a
a. capital projects fund
b. debt service fund
c. pension trust fund
d. special revenue fund
Answer: c
Answer: b
24. The total amount of taxes receivable from all taxpayers within a government's
jurisdiction will be posted to which type of account?
a. a control account
b. a contra account
c. a net assets account
d. a subsidiary account
Answer: a
Answer: b
Problems
Answer:
c. Cash 335,000
Property taxes receivable 335,000
d. Encumbrances 25,000
Budgetary fund balance reserved for encumbrances 25,000
Prepare journal entries to record the following transactions for Cosmotown for
2009. The Town records encumbrances only for its Supplies appropriation.
e. The town sent out two purchase orders for supplies: purchase order A for
$6,000 and purchase order B for $5,000.
f. The town received $130,000 from property owners in payment of their
property taxes.
g. Cosmotown repaid the bank on its borrowing in transaction c. The
amount paid was $101,000, which included interest of $1,000.
h. The town collected $15,000 for fishing licenses.
i. The town received the supplies ordered on purchase order A in transaction
e. All the supplies arrived in good condition and the invoice for $6,100
was approved for payment.
j. The town Treasurer paid the invoice in transaction i. for $6,100.
Answer:
c. Cash 100,000
Tax anticipation notes payable 100,000
e. Encumbrances 11,000
Budgetary fund balance reserved for encumbrances 11,000
f. Cash 130,000
Property taxes receivable 130,000
h. Cash 15,000
Revenues - licenses and fees 15,000
Answer:
Presented below is the adjusted trial balance for the General Fund of the
Township of Sean’s Haven at June 30, 2009, the end of the fiscal year. Based on
this information, prepare, in good form:
a. closing entries
b. the statement of revenues, expenditures, and changes in fund balance for the year
c. the balance sheet at June 30, 2009.
Cash $ 6,200
Taxes receivable 40,000
Investments 65,000
Vouchers payable 38,750
Tax anticipation notes payable 12,750
Unreserved fund balance 57,000
Estimated revenues 101,000
Appropriations 99,000
Budgetary fund balance 2,000
Revenues-taxes 100,000
Revenues-other 2,080
Expenditures-personal services 94,700
0
Expenditures-supplies 4,680
$ 311,580 $ 311,580
Answer:
a. Closing entries
Appropriations 99,000
Budgetary fund balance 2,000
Estimated revenues 101,000
Revenues-taxes 100,000
Revenues-other 2,080
Expenditures-personal services 94,700
Expenditures-supplies 4,680
Unreserved fund balance 2,700
c. Balance Sheet
Township of Sean’s Haven
General Fund
Balance Sheet
At June 30, 2009
Assets
Cash $ 6,200
Taxes receivable 40,000
Investments 65,000
Total assets $ 111,200
Liabilities
Vouchers payable $ 38,750
Tax anticipation notes payable 12,750
Total liabilities 51,500
Fund balance
Unreserved 59,700
Total liabilities and fund balance $ 111,200