Question

32 Which of the following is an unrealized decrease in net worth? A Salaries B Change in current value of securities C Personal expenditures D Dividends 33 Govemmental accounting funds whose operations are similar to private businesses are called funds. A Enterprise B capital projects C debt service D fiduciary 34 The MD and A for governmental entities does not have to include: A an analysis of balances and transactions of individual funds. B a description of significant capital asset and long-term debt activity during the year. Can analysis of the overall financial position and results of operations. Da reconciliation of the difference between fund balances computed on an accrual basis with the balances computed on a cash basis. 35 What basis of accounting is used by government funds? A Modified accrual B Accrual C Cash D Semi accrual 36 Appropriations in governmental accounting are: A funds accounted for on an endowment basis. B provision for necessary resources and authority for their disbursement C future commitments for expenditures. D funds restricted to use for capital expenditures.

Can you please do 32 to 36? Thank you so much!!

Answer 1

32. Ans: Option B Change in current value of securities

     Salaries increases the expenses and decrease the net profit, which will inturn decrease the retained earnings. So, salary will decrease the networth but it is a realized decrease i.e., actual outflow of resources is necessary for payment of salary.

Dividend also decreases networth since, it is paid out of retained earnings. But, it is also a realized decrease since actual outflow is necessary.

Change in current value of investment will reduce the networth but is an unrealized decrease.

Personal expenditures donot decrease networth of an entity.

33. Ans: Option A Enterprise funds

Enterprise funds are self supporting goverment funds. These are used by Goverment to sell goods and services to the public for a fee just like the operations of private entities.

34. Ans Option D. Reconciliation of differences between fund balances computed on accrual basis with the balances computed on cash basis. The Management's Discussion and Analysis should include the other three options.

35. Option A Modified accrual basis of accounting

The difference between accrual and modified accrual basis of accounting come from the recognition of revenue, from the recording of deferred revenue and from the presentation of expenses v/s expenditures.

36.Ans: Option B Provision for necessary resources and authority for their disbursements.