Multiple-Choice Questions on Government Financial ReportingSelect the correct answer for e...

Multiple-Choice Questions on Government Financial Reporting

Select the correct answer for each of the following questions.

1. The government-wide financial statements use the

a. Economic resources measurement focus and the accrual basis of accounting.

b. Current financial resources measurement focus and the accrual basis of accounting.

c. Economic resources measurement focus and the modified accrual basis of accounting.

d. Current financial resources measurement focus and the modified accrual basis of accounting.

2. The financial statements for the governmental funds use the

a. Economic resources measurement focus and the accrual basis of accounting.

b. Current financial resources measurement focus and the accrual basis of accounting.

c. Economic resources measurement focus and the modified accrual basis of accounting.

d. Current financial resources measurement focus and the modified accrual basis of accounting.

3. According to GASB Statement No. 34, infrastructure fixed assets

a. Must be capitalized and depreciated.

b. Must be capitalized, but governments do not have to depreciate them.

c. May be capitalized and depreciated.

d. Must be reported using the modified approach.

4. On which of the following government-wide financial statements would you find all liabilities of a state or local government?

a. Statement of net assets.

b. Statement of financial condition.

c. Statement of activities.

d. Statement of financial position.

5. On which of the following financial statements would you find all of the capital assets of a local government?

a. Statement of net assets.

b. Statement of financial condition.

c. Statement of activities.

d. Statement of financial position.

6. For which fund category is a statement of cash flows prepared?

a. Governmental.

b. Proprietary.

c. Fiduciary.

d. None of the above.

Note: Use the information below to answer questions 7 through 9.

The Village of Hampton reported the following data for its governmental activities for the year ended June 30, 20X5:

Additional data: All of the long-term debt was used to acquire capital assets. Cash of $654,000 is restricted for debt service.

7. On the statement of net assets prepared at June 30, 20X5, what amount should be reported for total net assets?

a. $8,839,000.

b. $7,804,000.

c. $7,150,000.

d. $8,189,000.

8. On the statement of net assets prepared at June 30, 20X5, what amount should be reported for net assets, invested in capital assets net of related debt?

a. $8,839,000.

b. $7,804,000.

c. $7,150,000.

d. $8,189,000.

9. On the statement of net assets prepared at June 30, 20X5, what amount should be reported for net assets, unrestricted?

a. $1,685,000.

b. $1,689,000.

c. $1,035,000.

d. $1,031,000.

10. Which of the following funds can be major funds assuming the appropriate tests are met?

a. The parking meter special revenue fund and the water utility enterprise fund.

b. The fire station capital projects fund and a property tax agency fund.

c. The fire station bonds debt service fund and the city teachers pension trust fund.

d. The local symphony permanent fund and the Edwina Williams private-purpose trust fund.

11. Where in the basic financial statements would you find a description of the measurement focus and the basis of accounting used in the government-wide financial statements?

a. In the statement of net assets.

b. In the statement of activities.

c. In management’s discussion and analysis.

d. In the notes to the financial statements.

12. Where in the financial section of a CAFR would you find an analysis of the balances and transactions of individual funds?

a. In the government-wide financial statements.

b. In the fund financial statements.

c. In management’s discussion and analysis.

d. In the notes to the financial statements.