1. The accounts “estimated revenues” and “appropriations” appear in the trial balance of the general fund. These accounts indicate:
a The use of cash-basis accounting
b The use of accrual-basis accounting
c The formal use of budgetary accounts
d The informal use of budgetary accounts
2. When a complete system of encumbrance accounting is used, the authorizations remaining available for expenditures at any interim date will be equal to:
a Appropriations less encumbrances
b Appropriations less expenditures
c Appropriations plus encumbrances less expenditures
d Appropriations less expenditures and encumbrances
3. Encumbrance accounting is designed to:
a Prevent overspending of amounts appropriated
b Replace expenditure accounting for governmental organizations
c Prevent excessive appropriations
d Prevent or reduce waste in governmental spending
4. Reserve for encumbrance accounts in general fund balance sheets at year-end indicate:
a The amount of net position required to complete the transaction(s) in the succeeding period
b Noncompliance with GAAP
c Cash on hand
d Valuation reserves
5. The reserve for encumbrances—past year account typically represents amounts recorded by a governmental unit for:
a Anticipated expenditures in the next year
b Expenditures for which purchase orders were made in the prior year but for which expenditure and disbursement will be in the current year
c Excess expenditures in the prior year that will be offset against the current-year budgeted amounts
d Unanticipated expenditures of the prior year that become evident in the current year
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