Multiple-Choice Questions on the General Fund [AICPA Adapted] Select the correct...

Multiple-Choice Questions on the General Fund [AICPA Adapted]

Select the correct answer for each of the following questions.

1. One difference between accounting for a governmental (not-for-profit) unit and a commercial (for-profit) enterprise is that a governmental unit should

a. Not record depreciation expense in any of its funds.

b. Always establish and maintain complete self-balancing accounts for each fund.

c. Use only the cash basis of accounting.

d. Use only the modified accrual basis of accounting.

2. Belle Valley incurred $100,000 of salaries and wages for the month ended March 31, 20X2. How should this be recorded on that date?

3. Which of the following accounts of a governmental unit is credited when taxpayers are billed for property taxes?

a. Estimated Revenue.

b. Revenue.

c. Appropriations.

d. Fund Balance—Assigned for Encumbrances.

4. Fixed assets purchased from general fund revenue were received. What account, if any, should have been debited in the general fund?

a. None.

b. Fixed Assets.

c. Expenditures.

d. Fund Balance—Unassigned.

5. The initial transfer of cash from the general fund to establish an internal service fund requires the general fund to credit Cash and debit

a. Accounts Receivable—Internal Service Fund.

b. Transfers Out.

c. Budgetary Fund Balance—Assigned for Encumbrances.

d. Expenditures.