Multiple-Choice Questions on the General Fund
Select the correct answer for each of the following questions.
1. The primary focus in accounting and reporting for governmental funds is on
a. Income determination.
b. Flow of financial resources.
c. Capital maintenance.
d. Transfers relating to proprietary activities.
2. The governmental fund measurement focus is on the determination of
|
| Financial | Flow of |
| Income | Position | Financial Resources |
a. | Yes | Yes | No |
b. | No | Yes | No |
c. | No | No | Yes |
d. | No | Yes | Yes |
3. A Budgetary Fund Balance—Assigned for Encumbrances in excess of a balance of Encumbrances Control indicates
a. An excess of vouchers payable over encumbrances.
b. An excess of purchase orders over invoices received.
c. A recording error.
d. An excess of appropriations over encumbrances.
4. The Encumbrances Control account of a governmental unit is debited when
a. Goods are received.
b. A voucher payable is recorded.
c. A purchase order is approved.
d. The budget is recorded.
5. The following pertains to property taxes levied by Cedar City for the calendar year 20X6:
Expected collections during 20×6 | $500,000 |
Expected collections during the first 60 days of 20×7 | 100,000 |
Expected collections during the remainder of 20×7 | 60,000 |
Expected collections during January 20×8 | 30,000 |
Estimated to be uncollectible (3/1/×7 through 1/1/×8) | 10,000 |
Total levy | $700,000 |
What amount should Cedar report for 20X6 as revenues from property taxes?
a. $700,000.
b. $600,000.
c. $690,000.
d. $500,000.
6 Oak City issued a purchase order for supplies with an estimated cost of $5,000. When the supplies were received, the accompanying invoice indicated an actual price of $4,950. What amount should Oak debit (credit) to Budgetary Fund Balance—Assigned for Encumbrances after the supplies and invoice are received?
$5,000.
$(50).
$4,950.
$50.
7. For the budgetary year ending December 31, 20X6, Johnson City’s general fund expects the
following inflows of resources:
Property taxes, licenses, and fines | $9,000,000 |
Transfer in from internal service fund | 500,000 |
Transfer in from debt service fund | 1,000,000 |
In the budgetary entry, what amount should Johnson record for estimated revenues?
a. $9,000,000.
b. $9,500,000.
c. $10,500,000.
d. $10,000,000.
8. Encumbrances outstanding at year-end in a state’s general fund should be reported as a
a. Liability in the general fund.
b. Fund balance designation in the general fund.
c. Fund balance reserve in the general fund.
d. Liability in the general long-term debt account group.
9. Interperiod equity is an objective of financial reporting for governmental entities. According to the Governmental Accounting Standards Board, is interperiod equity fundamental to public administration? Is it a component of accountability?
| Fundamental to Public | Component of |
| Administration | Accountability |
a. | Yes | Yes |
b. | No | No |
c. | Yes | No |
d. | No | Yes |
10. Which of the following statements is correct regarding comparability of governmental financial reports?
a. Comparability is not relevant in governmental financial reporting.
b. Differences between financial reports should be due to substantive differences in underlying transactions or the governmental structure.
c. Selection of different alternatives in accounting procedures or practices account for the differences between financial reports.
d. Similarly designated governments perform the same functions.
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