Accounting For Governmental and Nonprofit Entities 16th Edition Reck Test Bank Full Chapter PDF

Accounting for Governmental and
Nonprofit Entities 16th Edition Reck

Test Bank
Visit to download the full and correct content document: https://testbankdeal.com/dow
nload/accounting-for-governmental-and-nonprofit-entities-16th-edition-reck-test-bank/
Chapter 07
Accounting for the Business-type Activities of State and Local

Governments
True / False Questions
1. For proprietary funds, governments generally present a statement of net position in a format
that displays assets, plus deferred outflows of resources, less liabilities, less deferred inflows
of resources, equals net position.
True False
2. Internal service funds of one government may not provide goods or services, on a cost-
reimbursement basis, to other governments.
True False
3. Revenues of internal service funds should be recognized only when they are expected to be
available in time to pay current liabilities of the fund.
True False
4. Internal service funds should account for operating expenditures on the accrual basis.
True False
7-1
© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
5. Internal service funds account within the fund for any long-term liabilities to be serviced from
revenue derived from fund operations.
True False
6. Internal service funds should not account for depreciation of capital assets used in their
operations, since this would, in effect, charge the government twice for the same assets.
True False
7. Internal service funds are intended to operate on taxes or other financing sources authorized
by the legally enacted revenue budget for each year; therefore, they are classified as
governmental funds.
True False
8. The net position of an internal service fund consists of contributed equity and reserves for
assets that will not be converted into cash in the normal operation of the fund.
True False
9. In the information for the Supplies Fund that follows, the account "Interfund Loan from
Electric Utility Fund" should be credited for $320,000 because this amount was borrowed from
and will have to be repaid by the Supplies Fund.
True False
7-2
10. In the information for the Supplies Fund that follows, the account "Interfund Transfer In from
General Fund" should be credited for $89,200 because this amount was transferred from the
General Fund to the Supplies Fund in a nonexchange transfer that will not have to be repaid.
True False
11. The Encumbrances account should be used by an internal service fund in the same manner as
by the General Fund.
True False
12. Proprietary funds are accounted for in a manner similar to investor-owned businesses; among
other features, the accrual basis of accounting is used and all of the capital assets used in
fund operations are accounted for by the using fund.
True False
13. Internal balances between governmental and business-type activities are reported in the
government-wide statements.
True False
14. Capital assets acquired under a capital lease for use by an internal service fund should be
recorded in the General Fund in order to report all leased assets in one financial statement.
True False
7-3
15. A statement of revenues, expenses, and changes in net position for an internal service fund is
similar in many respects to an income statement prepared for an investor-owned business.
True False
16. A statement of cash flows is not prepared for an internal service fund.
True False
17. An internal service fund can be liquidated only if there is a ready and willing buyer for the
fund's assets.
True False
18. Public utilities owned and operated by governments are common examples of enterprise
funds.
True False
19. Enterprise funds are used by state and local governments to account for services that are
provided to the general public on a user-charge basis, with prices set to recover the costs of
operations, activities financed with debt secured solely by revenues from fees of the activity,
activities required by law or regulations to recover operating costs from user charges, or any
activity that the governing body of the government has decided should be accounted for on a
"business basis".
True False
20. The liability for utility revenue bonds should be reported in business-type activities on the
government-wide statements, as well as in the enterprise fund.
True False
7-4
21. Budgets for enterprise funds should be recorded in the accounts in the same manner as
budgets for a General Fund or a special revenue fund.
True False
22. Unbilled customer accounts receivable should be reflected in the balance sheet of a
governmentally owned utility even though the exact amount of service to be billed is unknown
until the customers' meters can be read.
True False
23. General obligation bonds used to increase the capacity of a water treatment plant (part of a
water utility enterprise fund), but for which the debt service (including repayment of principal)
will be paid from general government revenues should be reported as a long-term liability in
the water utility fund balance sheet.
True False
24. Interest and principal on enterprise fund revenue bonds should be recorded in a debt service
fund until paid.
True False
25. Governments can follow either the GASB or FASB Codification.
True False
26. The liability for long-term debt issued to provide financing for an enterprise fund and to be
serviced from revenues of the enterprise fund should be reported in the financial statements
of the enterprise fund, even though the debt also is backed by the general obligation credit of
the government.
True False
7-5
27. Utility enterprise funds that report to regulatory agencies may capitalize both actual interest
paid on debt incurred for construction of plant assets and an imputed amount on their own
funds so used.
True False
28. In the context of regulatory utility plant accounting, original cost and historical cost have the
same meaning.
True False
29. The amount of expense and liability to be reported each period for the closure and
postclosure costs of a municipal solid waste landfill (MSWLF) is proportional to the amount of
landfill capacity used during the period.
True False
30. The balance sheet format recommended for financial statements submitted to the NARUC
and FERC for utilities subject to regulatory reporting requirements displays Utility Plant before
Current and Accrued Assets and Long-Term Debt before Current and Accrued Liabilities.
True False
31. GASB requires interest capitalization for self-constructed assets of proprietary funds, except
those constructed with general long-term debt that will be repaid from resources of
governmental activities.
True False
7-6
32. To facilitate the combination of utility financial statements with the statements of other
enterprise funds, GAAP permits utilities to follow the customary format used by nonutility
business organizations.
True False
33. Premiums or discounts on bonds payable issued by enterprise funds should be accounted for
in the same manner as those of a comparable business entity.
True False
34. Plant and equipment utilized by a governmentally owned utility should be depreciated in the
same manner as if it belonged to an investor-owned utility.
True False
Multiple Choice Questions
35. Which of the following may properly be reported as a component of net position in the
proprietary fund statement of net position?
A. Retained earnings.
B. Designated equity.
C. Restricted net position.
D. Contributed capital.
7-7
36. Which of the following properly portrays the components of net position for proprietary
funds?
A. Net investment in capital assets, Reserved, Unreserved.
B. Designated, Undesignated, Restricted, Unrestricted.
C. Net investment in capital assets, Restricted, Unrestricted.
D. Contributed capital, Net investment in capital assets, Reserved, Unreserved.
37. Which of the following funds of a government uses the same basis of accounting as a
proprietary fund?
A. Permanent trust.
B. Investment trust fund.
C. Special revenue.
D. Capital projects.
38. Internal service funds should be used only if
A. The reporting government is the predominant participant in the activity.
B. The reporting government provides services primarily to external participants.
C. The reporting government provides services primarily to other departments of the same
government.
D. The reporting government provides services to other departments at a charge that covers
the full cost of operations.
7-8
39. In which of the following funds is it appropriate to record depreciation of capital assets?
A. Internal service fund.
B. Permanent fund.
C. General fund.
D. Capital projects fund.
40. Which of the following is a difference between enterprise funds and internal service funds?
A. The use of cost accounting by enterprise funds but not internal service funds.
B. The customers who primarily benefit from the fund's service.
C. The number of basic financial statements required.
D. The measurement focus on economic resources for enterprise funds and current financial
resources for internal service funds.
41. Depreciation on capital assets used by an enterprise fund of a government
A. Should not be recorded for infrastructure assets.
B. Should be recorded in the General Fund as an expenditure.
C. Should be recorded in the governmental activities accounts.
D. Should be recorded in the enterprise fund as an expense.
42. The comprehensive annual financial report (CAFR) of a government should contain a
statement of revenues, expenses, and changes in net position for
A. Both proprietary and governmental funds.
B. Proprietary but not governmental funds.
C. Governmental but not proprietary funds.
D. Proprietary and fiduciary funds.
7-9
43. Which of the following activities or services would most likely not be accounted for by an
internal service fund?
A. Electronic data processing.
B. Central purchasing, warehousing, and issuing of supplies.
C. Municipal golf course.
D. Risk management.
44. When a supplies internal service fund records a billing to the General Fund, the journal entry
in the internal service fund will include
A. A debit to Cost of Supplies Issued.
B. A debit to Loans Receivable.
C. A debit to Billings to Department.
D. A debit to Inventory of Supplies.
45. When a supplies internal service fund records a billing to the General Fund, the journal entry
in the General Fund will include
A. A debit to Cost of Supplies Issued.
B. A credit to Interfund Loans Payable.
C. A debit to Expenditures.
D. A credit to Billings to Department.
7-10
46. Which of the following is not true regarding proprietary funds?
A. The difference between assets and liabilities of proprietary funds is called "fund balance".
B. Proprietary funds record long-term debt directly in the fund accounts.
C. Proprietary funds record capital assets directly in the fund accounts.
D. Proprietary funds present a statement of cash flows.
47. Which of the following is (are) an appropriate basis of accounting for an internal service
fund?
A. Modified accrual basis: Yes; accrual basis: No
B. Modified accrual basis: No; accrual basis: Yes
C. Modified accrual basis: Yes; accrual basis: Yes
D. Modified accrual basis: No; accrual basis: No
48. Which of the following funds of a government would account for depreciation in the accounts
of the fund?
A. General.
B. Internal service.
C. Capital projects.
D. Special revenue.
49. An internal service fund normally uses which of the following budgetary accounts?
A. Estimated Revenues.
B. Appropriations.
C. Encumbrances.
D. An internal service fund normally does not use budgetary accounts.
7-11
50. Under GASB standards, an internal service fund should prepare all of the following financial
statements except for a
A. Statement of revenues, expenditures, and changes in fund balance.
B. Statement of revenues, expenses, and changes in net position.
C. Statement of net position.
D. Statement of cash flows.
51. In order to conform to GASB standards, goods and services provided by internal service funds
to other departments of the government must be priced to
A. Cover variable costs only.
B. Cover full costs (both fixed and variable).
C. Cover full costs, plus an additional charge to cover inflation and anticipated needs for
expansion.
D. GASB standards do not address appropriate fees. Each government determines its own
operating and pricing policies, which may include subsidizing the cost of operating an
internal service fund.
7-12
52. What amount of the following items should be accounted for in an internal service fund?
A. $2,100,000.
B. $1,760,000.
C. $1,640,000.
D. $350,000.
53. What amount of the following items should be accounted for in an enterprise fund?
A. $2,100,000.
B. $1,760,000.
C. $1,640,000.
D. $350,000.
7-13
54. To establish a new internal service fund with a transfer of funds (not to be repaid), which
account would be credited in the internal service fund?
A. Cash.
B. Interfund Transfer In.
C. Interfund Transfer Out.
D. Estimated Revenues.
55. The City of Jennings operates a central motor pool as an internal service fund for the benefit
of the city’s other funds and departments. In the current year, this fund billed the Community
Services Department $30,000 for vehicle rentals. What account should the internal service
fund use to record these billings?
A. Interfund Transfers In.
B. Interfund Exchanges.
C. Billings to Departments.
D. Cost of Providing Rentals to Other Funds and Units.
56. When utility customers are billed during the year, the enterprise fund journal entry will
include
A. A debit to Sales of Water.
B. A debit to Cash - Restricted.
C. A debit to Customer Accounts Receivable.
D. All of the above.
7-14
57. When a new utility customer submits a deposit, the enterprise fund journal entry will include
A. A credit to Customer Deposits.
B. A debit to Customer Deposits.
C. A debit to Sales of Water.
D. A credit to Sales of Water.
58. GASB accounting and financial reporting standards for risk financing activities provide that an
internal service fund should recognize claims expense and a related liability when a claim has
been asserted and
A. A municipal court has awarded a judgment to a claimant fund (e.g., the General Fund).
B. It is reasonably possible that a loss has been incurred and the amount can be reasonably
estimated.
C. It is probable that a loss has been incurred and the amount can be reasonably estimated.
D. A loss has been incurred, but the amount cannot be reasonably estimated.
59. Which of the following is not a typical means of dissolving an internal service fund that a city
no longer needs or wants?
A. Conversion of the fund's noncash assets to cash and distribution of the cash to another
fund or funds.
B. Transfer the fund's assets to another fund that will continue the same or similar operating
activities.
C. Distribute the fund's assets in kind to another fund or funds that will not continue the same
or similar operating activities.
D. Transfer the fund's assets to a not-for-profit organization that provides charitable services
in the community.
7-15
60. Which of the following account balances would only be reported if a city-owned utility
followed regulatory accounting principles?
A. Depreciation expense.
B. Pumping expense.
C. Restricted Assets—Cash.
D. Utility Plant Acquisition Adjustments.
61. Customers' meter deposits, which cannot be spent for normal operating purposes, would be
classified as restricted cash in the balance sheet of which fund type?
A. Internal service.
B. Private-purpose trust fund.
C. Enterprise.
D. Special revenue.
62. Which of the following organizations or units would least likely be accounted for by an
enterprise fund?
A. A hospital.
B. An airport.
C. The computer department.
D. A sports stadium.
7-16
63. Which of the following accounts would appropriately be included on an enterprise fund
balance sheet?
A. Fund Balance: No; Net Position—Unrestricted: Yes
B. Fund Balance: Yes; Net Position—Unrestricted: No
C. Fund Balance: No; Net Position—Unrestricted: No
D. Fund Balance: Yes; Net Position—Unrestricted: Yes
64. The water utility fund of the City of Pikesville uses cycle billing procedures. Under these
procedures, the City of Pikesville will likely do which of the following on December 31, the end
of its fiscal year?
A. Read meters and bill all customers on December 31.
B. Accrue revenue and a receivable for the number of days from the last billing date for each
customer until December 31.
C. Ignore water consumed by customers from their last billing date until December 31.
D. Call the unbilled customers and request that they read their own meters.
7-17
65. The following cash transactions were among those reported by Crawford County's Water and
Sewer Enterprise Fund for the year:
In the Water and Sewer Enterprise Fund's statement of cash flows for the year ended
December 31, what amount should be reported as cash flows from capital and related
financing activities?
A. $5,000,000.
B. $6,000,000.
C. $8,000,000.
D. $9,000,000.
66. Which of the following is not a true statement about the Allowance for Funds Used During
Construction (AFUDC)?
A. AFUDC may have either a debt component or an equity component.
B. The amount credited to AFUDC may exceed the amount of interest paid during the period
on bonds issued for construction.
C. AFUDC may be credited for an imputed amount of interest on the utility's own funds used
for construction.
D. AFUDC may include the total amount of borrowing during construction.
7-18
67. Which of the following items is not required to be included in the segment information that
must be reported for a municipality's enterprise funds?
A. Material enterprise fund capital assets.
B. Material enterprise fund operating income or loss.
C. Material enterprise fund tax revenues.
D. Material intergovernmental operating subsidies to an enterprise fund.
68. A municipal solid waste landfill (MSWLF) accounted for by an enterprise fund should
recognize an expense and liability for the year in the amount of
A. The estimated total current costs for closure and postclosure of the MSWLF determined at
the time the landfill is placed into initial operation divided by the estimated number of years
the landfill will be operated.
B. The estimated total current costs for closure and postclosure of the MSWLF as reevaluated
at the end of each fiscal year divided by the remaining estimated number of years the
landfill will be operated.
C. A portion of the estimated total current costs for closure and postclosure of the MSWLF,
determined at the time the landfill is placed into initial operation, equal to the ratio of
landfill used during the year to its total capacity.
D. A portion of the estimated total current costs for closure and postclosure of the MSWLF, as
reevaluated at the end of the fiscal year, equal to the ratio of landfill used during the year
to its total capacity.
7-19
69. Under utility regulatory accounting principles (RAP), the account "Utility Plant Acquisition
Adjustment" reflects
A. The difference between the amount paid for utility plant and the amount originally paid by
the utility that first placed the plant into public service, less accumulated depreciation.
B. The difference between the fair market value of the utility plant and the amount paid for it,
less accumulated depreciation.
C. The difference between the amount paid for the utility plant less its current replacement
cost.
D. The difference between the amount paid for the utility plant less the fair market value of its
tangible plant assets.
70. The liability for general obligation bonds issued for the benefit of a governmentally owned
electric utility and serviced by its earnings should be recorded in
A. An enterprise fund.
B. An enterprise fund and disclosed in the notes to the financial statements.
C. An enterprise fund and the business-like activities accounts.
D. The governmental activities accounts.
71. Sales revenues of a utility for a certain fiscal period
A. Are equivalent to total debits to Customer Accounts Receivable for that period.
B. Include receivables billed during a fiscal period, plus receivables billed early in the next
year if meters were read before year-end.
C. Should be reported on the cash basis for the sake of conservatism.
D. Include billed receivables and an accrual for unbilled receivables as of the balance sheet
date.
7-20
72. For which of the following assets can the "modified approach" be elected in lieu of
depreciation?
A. Eligible infrastructure assets.
B. All general capital assets.
C. Buildings and equipment.
D. All capital assets.
73. The Capitol City Golf Course, an enterprise fund, purchased new furniture for use in the golf
pro's office. The debit for the entry to record the event should be to
A. Expenditures.
B. Purchases.
C. Furniture and fixtures.
D. General capital assets.
74. Which of the following accounts would least likely be found in the general ledger of an internal
service fund?
A. Cash.
B. Expenditures.
C. Billings to Departments.
D. Machinery and equipment.
7-21
75. Which of the following would be reflected in the operating statement of a proprietary fund?
A. Incurrence of interest expense.
B. Repayment of the principal of debt.
C. Issuance of debt.
D. Purchase of a capital asset.
76. How should financial information for internal service funds be reported in the government-
wide financial statements?
A. As part of governmental activities.
B. As part of business-type activities.
C. Amounts allocated proportionately between governmental and business-type activities.
D. Usually as part of governmental activities, unless the internal service fund predominantly
serves one or more enterprise funds.
77. Primarily, the operating statement of a proprietary fund should provide information useful in
answering which of the following questions?
A. What are the transactions or events of the period that have increased or decreased the
resources available for spending in the near future?
B. Have current financial resources increased or decreased during the period?
C. Have cash balances increased or decreased as a result of transactions and events of the
period?
D. What are the transactions or events of the period that have increased or decreased the
fund's total economic resources?
7-22
Short Answer Questions
78. The following are key terms in Chapter 7 that relate accounting for the business-type
activities of state and local governments:
A. Customer advances for construction
B. Revenue bonds
C. Utility plant acquisition adjustment
D. Regulatory accounting principles
E. Original cost
F. Historical cost
G. General obligation bonds
For each of the following definitions, indicate the key term from the list above that best
matches by placing the appropriate letter in the blank space next to the definition.
7-23
Essay Questions
79. "In order to determine whether user charges are commensurate with operating costs, it is
desirable for internal service fund operations to be accounted for on a business basis." Do you
agree? Why or why not?
80. Legislators often believe an internal service fund function will not be subjected to annual
legislative budget review and the legislature will “lose control” of the fund. Do you agree with
this line of reasoning? Why or why not?
7-24
81. Explain how governmental entities that use internal service funds to account for risk financing
and risk management activities should account for those activities.
82. "Enterprise funds should not be permitted to accumulate unrestricted net position, since to do
so would indicate overpricing of its services." Do you agree? Why or why not?
7-25
83. Enterprise funds for utilities often report in their operating statement an "Allowance for Funds
Used During Construction (AFUDC)" for interest paid or imputed during construction of plant
assets. What purposes are served by reporting AFUDC in the manner described?
84. In some local government financial reports you will find activities such as solid waste disposal
and sewage disposal accounted for as a part of the General Fund. In other reports apparently
identical activities are accounted for as enterprise funds. Under what conditions would each
treatment be proper?
7-26
85. How does GASB reporting of uncollectible accounts for governmental funds and proprietary
funds differ from the reporting of uncollectible accounts under FASB standards?
86. A government provided original financing for its supplies fund by a transfer of $40,000 cash
from the General Fund. The transferee fund credited the amount to Interfund Loan from
General Fund—Noncurrent. Assuming that the terminology is correct, how should the transfer
be classified in the statements of the supplies fund? Suggest an appropriate name for the
corresponding account in the General Fund; how should the corresponding account be shown
in the statements of the General Fund?
7-27
87. Explain how capitalization of interest costs differs for enterprise funds as opposed to
governmental funds.
88. What are the alternative methods of dissolving an internal service fund? What factors should
be considered in choosing the appropriate method?
89. What factors should be considered in determining whether an activity or operation should be
accounted for as an enterprise fund or as a governmental fund? As an internal service fund?
7-28
90. For items reported in the restricted assets section of an enterprise fund balance sheet, how
are the related items reported in the liability and fund equity sections of the balance sheet?
91. "Reporting 'utility plant in service' as a single line on the balance sheet provides adequate
information for regulatory purposes and/or sound management." Do you agree with the
statement? Explain why or why not.
7-29
92. The Motor Vehicle Repair Fund of Laramee County provides centralized repair for county-
owned vehicles. For the following summarized transactions and events for the year ended
June 30, provide the fund level entries in general journal form required to conform to generally
accepted accounting principles. If no entry is needed, so indicate.
1) The Motor Vehicle Repair Fund ordered supplies at an estimated cost of $92,000.
2) The supplies ordered in (1) above were received at invoice costs of $91,400; these invoices
were approved for payment.
3) Supplies costing $800 were used to repair a police car, and the Motor Vehicle Repair Fund
billed to the General Fund at a markup of 20 percent on cost.
4) Expenses paid in cash during the year were: purchasing, $5,700; warehousing, $7,100; and
general and administrative, $6,200.
7-30
93. The Supplies Fund, an internal service fund, of a certain city recorded the following journal
entry:
In the entry above, explain the difference between the accounts "Interfund Loan from Water
Utility Fund" and "Interfund Transfer In from General Fund".
7-31
94. On July 1, the first day of its fiscal year, Yale Township issued bonds with a face value of
$1,000,000 at 102 percent of par on the date of issue. The bonds bear annual interest at 6
percent; interest is payable semiannually. The bonds will mature in equal annual installments
over 20 years. Bond premium must be used for eventual bond redemption and is recorded as a
restricted asset. Assuming the bonds are revenue bonds sold to finance the construction of a
parking garage to be operated in a manner similar to an investor-owned business:
1) Name the type of fund in which each of the following should be recorded. (If any of the
following should not be recorded at all, enter "none" on the appropriate line.)
(a) The cash received for the sale of the bonds
(b) The liability of $1,000,000 for bonds payable
(c) The cost of the parking garage
(d) Interest paid or accrued during the period of construction
2) Show in general journal form all entries that should be made to record the sale of the
bonds. For each entry indicate the fund in which the entry is made.
7-32
Chapter 07 Accounting for the Business-type Activities of State and
Local Governments Answer Key
True / False Questions
1. For proprietary funds, governments generally present a statement of net position in a

format that displays assets, plus deferred outflows of resources, less liabilities, less
deferred inflows of resources, equals net position.
TRUE
This sentence describes the nature of a proprietary fund statement of net position.
Difficulty: Easy
Question Type: Concept
2. Internal service funds of one government may not provide goods or services, on a cost-
reimbursement basis, to other governments.
FALSE
The definition of internal service funds quoted in the text is to provide for service to other
governments as well as to other departments or agencies of the unit operating the internal
service fund. While internal service funds exist primarily to provide goods and services to
other departments and agencies of the same government, there is no prohibition to
providing the goods or services to other governments as well.
Difficulty: Easy
7-33
3. Revenues of internal service funds should be recognized only when they are expected to be
available in time to pay current liabilities of the fund.
FALSE
Revenues of internal service funds should be recognized on the accrual basis: when
earned, without regard to when they will be available to pay current liabilities of the fund.
Difficulty: Medium
4. Internal service funds should account for operating expenditures on the accrual basis.
FALSE
This question requires careful reading. Internal service funds account for expenses, not
expenditures, and use the accrual basis.
Difficulty: Medium
5. Internal service funds account within the fund for any long-term liabilities to be serviced
from revenue derived from fund operations.
TRUE
Since the internal service fund uses accrual accounting, it recognizes any long-term
liabilities of the fund. Long-term liabilities of an internal service fund ordinarily result from
advances from other funds or governments, not from outside creditors.
Difficulty: Easy
7-34
6. Internal service funds should not account for depreciation of capital assets used in their
operations, since this would, in effect, charge the government twice for the same assets.
FALSE
As for a business enterprise, including a depreciation charge is necessary to determine the

full cost of services.
Difficulty: Medium
7. Internal service funds are intended to operate on taxes or other financing sources
authorized by the legally enacted revenue budget for each year; therefore, they are
classified as governmental funds.
FALSE
Internal service funds and enterprise funds are intended to cover operating costs on a
continuing basis and ordinarily obtain their revenues from user charges, not taxes or other
financing sources provided for by an annual budget; therefore, these are both proprietary,
not governmental, funds. However, under GASB standards, internal service funds are
reported as governmental activities, not business-like activities, on the government-wide
statements if they primarily serve other governmental departments or functions.
Difficulty: Medium
7-35
8. The net position of an internal service fund consists of contributed equity and reserves for
assets that will not be converted into cash in the normal operation of the fund.
FALSE
Under GASB standards, net position is classified into the three categories of net
investment in capital assets, restricted, and unrestricted.
Difficulty: Easy
9. In the information for the Supplies Fund that follows, the account "Interfund Loan from
Electric Utility Fund" should be credited for $320,000 because this amount was borrowed
from and will have to be repaid by the Supplies Fund.
TRUE
Loan is the term described in GASB standards for such transactions. Interfund loans
should be properly classified as current or noncurrent receivables or payables.
Difficulty: Medium
Question Type: Journal Entry
7-36
10. In the information for the Supplies Fund that follows, the account "Interfund Transfer In
from General Fund" should be credited for $89,200 because this amount was transferred
from the General Fund to the Supplies Fund in a nonexchange transfer that will not have to
be repaid.
TRUE
"Interfund Transfer In" is a temporary account that will be closed to Net Position—
Unrestricted at year-end.
Difficulty: Medium
Question Type: Journal Entry
11. The Encumbrances account should be used by an internal service fund in the same manner
as by the General Fund.
FALSE
Internal service funds do not incorporate budgetary accounts with proprietary accounts.
Memorandum records of purchase orders and contracts should be kept, however, for
management control purposes.
Difficulty: Easy
7-37
12. Proprietary funds are accounted for in a manner similar to investor-owned businesses;
among other features, the accrual basis of accounting is used and all of the capital assets
used in fund operations are accounted for by the using fund.
TRUE
The features described are characteristic of GAAP applicable to proprietary funds.
Difficulty: Easy
13. Internal balances between governmental and business-type activities are reported in the
government-wide statements.
TRUE
GASB standards require that interfund receivables and payables between governmental
and business-type activities be presented as internal balances. While internal balances do
not meet the definition of elements of financial statements, they are reported in the
government-wide statement of net position for purposes of fairly presenting each reporting
entity.
Difficulty: Medium
7-38
14. Capital assets acquired under a capital lease for use by an internal service fund should be
recorded in the General Fund in order to report all leased assets in one financial
statement.
FALSE
All capital assets used by an internal service fund, regardless of source, should be recorded
in the accounts of that fund.
Difficulty: Easy
15. A statement of revenues, expenses, and changes in net position for an internal service fund
is similar in many respects to an income statement prepared for an investor-owned
business.
TRUE
The terminology differs somewhat, but otherwise the statement is similar in format and
display to income statements prepared for business organizations.
Difficulty: Easy
16. A statement of cash flows is not prepared for an internal service fund.
FALSE
GASB standards require that a statement of cash flows be prepared for proprietary funds.
However, this statement is not required for governmental fund types.
Difficulty: Easy
7-39
17. An internal service fund can be liquidated only if there is a ready and willing buyer for the
fund's assets.
FALSE
The text suggests three ways, or combinations thereof, in which liquidation of an internal
service fund may be accomplished. Even if there is no external buyer for the fund's assets,
the fund could be dissolved by either distributing the fund's assets in kind to other funds or
by simply making the fund a department of another fund.
Difficulty: Medium
18. Public utilities owned and operated by governments are common examples of enterprise
funds.
TRUE
A government may operate almost any kind of enterprise, but public utilities are the most
common examples.
Difficulty: Easy
7-40
19. Enterprise funds are used by state and local governments to account for services that are
provided to the general public on a user-charge basis, with prices set to recover the costs
of operations, activities financed with debt secured solely by revenues from fees of the
activity, activities required by law or regulations to recover operating costs from user
charges, or any activity that the governing body of the government has decided should be
accounted for on a "business basis".
TRUE
Even if user charges are not the primary source of revenues, the enterprise fund approach
may be used for any activities for which the governing body desires periodic determination
of revenues earned, expenses incurred, and/or net income.
Difficulty: Medium
20. The liability for utility revenue bonds should be reported in business-type activities on the
government-wide statements, as well as in the enterprise fund.
TRUE
Utility revenue bonds, for which interest and principal are to be paid from revenues of the
enterprise fund, are a liability of that fund and should be so reported. They should also
appear as long-term liabilities of business-type activities on the government-wide
statement of financial position.
Difficulty: Easy
7-41
21. Budgets for enterprise funds should be recorded in the accounts in the same manner as
budgets for a General Fund or a special revenue fund.
FALSE
Budgets for enterprise funds are prepared to assist management in the efficient use of
resources and normally are not legally binding documents. Consequently, GASB standards
do not require or recommend that budgets be recorded in the accounts of an enterprise
fund. (However, in jurisdictions in which enterprise funds are required by law to prepare
budgets it may be desirable to integrate budgetary accounts with proprietary accounts.
Only the proprietary account balances should be reported in the basic financial statements,
however.)
Difficulty: Easy
22. Unbilled customer accounts receivable should be reflected in the balance sheet of a
governmentally owned utility even though the exact amount of service to be billed is
unknown until the customers' meters can be read.
TRUE
Unbilled receivables represent revenues that have been earned and therefore should be
reported in the current period. These receivables/revenues should be estimated as
accurately as possible using projections based on past usage patterns for the same
customers or recent usage patterns for other customers who have been billed.
Difficulty: Medium
7-42
23. General obligation bonds used to increase the capacity of a water treatment plant (part of
a water utility enterprise fund), but for which the debt service (including repayment of
principal) will be paid from general government revenues should be reported as a long-
term liability in the water utility fund balance sheet.
FALSE
Since water utility revenues will not be used for debt service on these bonds, the liability
must be reported in the governmental activities financial statements. However, the
enterprise fund should report a contribution from the General Fund (assumed) in the
amount of the bond proceeds used for the water treatment plant.
Difficulty: Medium
24. Interest and principal on enterprise fund revenue bonds should be recorded in a debt
service fund until paid.
FALSE
Debt service for revenue bonds is paid from the revenues of the enterprise fund and
therefore should be accounted for by that fund.
Difficulty: Medium
7-43
25. Governments can follow either the GASB or FASB Codification.
FALSE
GASB issued GASBS 62 which officially incorporated applicable private sector guidance
from FASB and AICPA pronouncements into the GASB codification. Additional accounting
guidance, such as FASB statements issued after 2010 or industry-specific guidance, is
considered “other accounting literature”, as defined in GASB Codification, Section 1000,
pars. 103 and 104, and may be followed by governments as long as they do not conflict
with or contradict GASB pronouncements.
Difficulty: Medium
26. The liability for long-term debt issued to provide financing for an enterprise fund and to be
serviced from revenues of the enterprise fund should be reported in the financial
statements of the enterprise fund, even though the debt also is backed by the general
obligation credit of the government.
TRUE
Although the liability should be reported as a liability of the enterprise fund, the fact that it
is secondarily a general obligation must be disclosed as a contingent liability in the notes
to the financial statements.
Difficulty: Medium
7-44
27. Utility enterprise funds that report to regulatory agencies may capitalize both actual
interest paid on debt incurred for construction of plant assets and an imputed amount on
their own funds so used.
TRUE
Utilities that report to regulatory agencies are usually allowed to capitalize both the net
cost for the period of construction of borrowed funds and a reasonable imputed rate on
other funds so used. FASB standards also permit such capitalization by regulated entities,
providing that imputed amounts capitalized are allowed to be recovered through rates
charged to customers, and it is probable that all capitalized costs will be recovered through
future revenues.
Difficulty: Medium
28. In the context of regulatory utility plant accounting, original cost and historical cost have
the same meaning.
FALSE
In the context of regulatory utility enterprise accounting, original cost is the cost to the
owner who first devoted the property to public service, whereas historical cost is simply the
acquisition cost to the current owner.
Difficulty: Medium
7-45
Another random document with
no related content on Scribd:
Conclusion.
I. The work on the oxalate and sulphide methods described in

this paper is of no value for determining the atomic weight of
cadmium. It does not even enable us to fix an approximate value.
II. There are a number of errors in the chloride and bromide
methods as they were used in this work, but they are not very large
and partially compensate each other. Their results, 112.383 and
112.396 respectively, may be regarded as approximations to the true
value.
III. The synthesis of cadmium sulphate as carried out is of
especial value in fixing a minimum value for the atomic weight of
cadmium. The result is 112.35, agreeing closely with that obtained by
the bromide and chloride methods.
IV. There is an error in the oxide method due to products of
decomposition of the nitrate being retained. Direct experiments gave
.39 of a unit for this when platinum crucibles were used and .24 of a
unit when porcelain ones were used. The calculated errors for
porcelain and platinum crucibles are .30 and .51 of a unit
respectively, if 112.38 is assumed as the atomic weight of Cadmium.
V. The average of the chloride, bromide, and sulphate methods
is 112.38. This result is to be regarded as tentative and not as final
since the main object of this work has been to find the cause of the
discrepancy in some methods employed in determining this
constant, rather than to make an atomic weight determination.
Biographical Sketch.
John Emery Bucher was born near Hanover, Pa., August 17,
1872. He entered Lehigh University in 1888 and graduated in 1891.
During the past three years he has been a graduate student in the
Johns Hopkins University.
Subjects: Chemistry, Mineralogy and Mathematics.
TRANSCRIBER’S NOTES
1. Silently corrected obvious typographical errors and
variations in spelling.
2. Retained archaic, non-standard, and uncertain spellings
as printed.
*** END OF THE PROJECT GUTENBERG EBOOK AN
EXAMINATION OF SOME METHODS EMPLOYED IN
DETERMINING THE ATOMIC WEIGHT OF CADMIUM ***
Updated editions will replace the previous one—the old editions

will be renamed.
Creating the works from print editions not protected by U.S.

copyright law means that no one owns a United States copyright
in these works, so the Foundation (and you!) can copy and
distribute it in the United States without permission and without
paying copyright royalties. Special rules, set forth in the General
Terms of Use part of this license, apply to copying and
distributing Project Gutenberg™ electronic works to protect the
PROJECT GUTENBERG™ concept and trademark. Project
Gutenberg is a registered trademark, and may not be used if
you charge for an eBook, except by following the terms of the
trademark license, including paying royalties for use of the
Project Gutenberg trademark. If you do not charge anything for
copies of this eBook, complying with the trademark license is
very easy. You may use this eBook for nearly any purpose such
as creation of derivative works, reports, performances and
research. Project Gutenberg eBooks may be modified and
printed and given away—you may do practically ANYTHING in
the United States with eBooks not protected by U.S. copyright
law. Redistribution is subject to the trademark license, especially
commercial redistribution.
START: FULL LICENSE

THE FULL PROJECT GUTENBERG LICENSE
PLEASE READ THIS BEFORE YOU DISTRIBUTE OR USE THIS WORK
To protect the Project Gutenberg™ mission of promoting the

free distribution of electronic works, by using or distributing this
work (or any other work associated in any way with the phrase
“Project Gutenberg”), you agree to comply with all the terms of
the Full Project Gutenberg™ License available with this file or
online at www.gutenberg.org/license.
Section 1. General Terms of Use and

Redistributing Project Gutenberg™
electronic works
1.A. By reading or using any part of this Project Gutenberg™
electronic work, you indicate that you have read, understand,
agree to and accept all the terms of this license and intellectual
property (trademark/copyright) agreement. If you do not agree to
abide by all the terms of this agreement, you must cease using
and return or destroy all copies of Project Gutenberg™
electronic works in your possession. If you paid a fee for
obtaining a copy of or access to a Project Gutenberg™
electronic work and you do not agree to be bound by the terms
of this agreement, you may obtain a refund from the person or
entity to whom you paid the fee as set forth in paragraph 1.E.8.
1.B. “Project Gutenberg” is a registered trademark. It may only

be used on or associated in any way with an electronic work by
people who agree to be bound by the terms of this agreement.
There are a few things that you can do with most Project
Gutenberg™ electronic works even without complying with the
full terms of this agreement. See paragraph 1.C below. There
are a lot of things you can do with Project Gutenberg™
electronic works if you follow the terms of this agreement and
help preserve free future access to Project Gutenberg™
electronic works. See paragraph 1.E below.
1.C. The Project Gutenberg Literary Archive Foundation (“the
Foundation” or PGLAF), owns a compilation copyright in the
collection of Project Gutenberg™ electronic works. Nearly all the
individual works in the collection are in the public domain in the
United States. If an individual work is unprotected by copyright
law in the United States and you are located in the United
States, we do not claim a right to prevent you from copying,
distributing, performing, displaying or creating derivative works
based on the work as long as all references to Project
Gutenberg are removed. Of course, we hope that you will
support the Project Gutenberg™ mission of promoting free
access to electronic works by freely sharing Project
Gutenberg™ works in compliance with the terms of this
agreement for keeping the Project Gutenberg™ name
associated with the work. You can easily comply with the terms
of this agreement by keeping this work in the same format with
its attached full Project Gutenberg™ License when you share it
without charge with others.
1.D. The copyright laws of the place where you are located also
govern what you can do with this work. Copyright laws in most
countries are in a constant state of change. If you are outside
the United States, check the laws of your country in addition to
the terms of this agreement before downloading, copying,
displaying, performing, distributing or creating derivative works
based on this work or any other Project Gutenberg™ work. The
Foundation makes no representations concerning the copyright
status of any work in any country other than the United States.
1.E. Unless you have removed all references to Project

Gutenberg:
1.E.1. The following sentence, with active links to, or other

immediate access to, the full Project Gutenberg™ License must
appear prominently whenever any copy of a Project
Gutenberg™ work (any work on which the phrase “Project
Gutenberg” appears, or with which the phrase “Project
Gutenberg” is associated) is accessed, displayed, performed,
viewed, copied or distributed:
This eBook is for the use of anyone anywhere in the United

States and most other parts of the world at no cost and with
almost no restrictions whatsoever. You may copy it, give it
away or re-use it under the terms of the Project Gutenberg
License included with this eBook or online at
www.gutenberg.org. If you are not located in the United
States, you will have to check the laws of the country where
you are located before using this eBook.
1.E.2. If an individual Project Gutenberg™ electronic work is

derived from texts not protected by U.S. copyright law (does not
contain a notice indicating that it is posted with permission of the
copyright holder), the work can be copied and distributed to
anyone in the United States without paying any fees or charges.
If you are redistributing or providing access to a work with the
phrase “Project Gutenberg” associated with or appearing on the
work, you must comply either with the requirements of
paragraphs 1.E.1 through 1.E.7 or obtain permission for the use
of the work and the Project Gutenberg™ trademark as set forth
in paragraphs 1.E.8 or 1.E.9.
1.E.3. If an individual Project Gutenberg™ electronic work is

posted with the permission of the copyright holder, your use and
distribution must comply with both paragraphs 1.E.1 through
1.E.7 and any additional terms imposed by the copyright holder.
Additional terms will be linked to the Project Gutenberg™
License for all works posted with the permission of the copyright
holder found at the beginning of this work.
1.E.4. Do not unlink or detach or remove the full Project

Gutenberg™ License terms from this work, or any files
containing a part of this work or any other work associated with
Project Gutenberg™.
1.E.5. Do not copy, display, perform, distribute or redistribute
this electronic work, or any part of this electronic work, without
prominently displaying the sentence set forth in paragraph 1.E.1
with active links or immediate access to the full terms of the
Project Gutenberg™ License.
1.E.6. You may convert to and distribute this work in any binary,
compressed, marked up, nonproprietary or proprietary form,
including any word processing or hypertext form. However, if
you provide access to or distribute copies of a Project
Gutenberg™ work in a format other than “Plain Vanilla ASCII” or
other format used in the official version posted on the official
Project Gutenberg™ website (www.gutenberg.org), you must, at
no additional cost, fee or expense to the user, provide a copy, a
means of exporting a copy, or a means of obtaining a copy upon
request, of the work in its original “Plain Vanilla ASCII” or other
form. Any alternate format must include the full Project
Gutenberg™ License as specified in paragraph 1.E.1.
1.E.7. Do not charge a fee for access to, viewing, displaying,

performing, copying or distributing any Project Gutenberg™
works unless you comply with paragraph 1.E.8 or 1.E.9.
1.E.8. You may charge a reasonable fee for copies of or

providing access to or distributing Project Gutenberg™
electronic works provided that:
• You pay a royalty fee of 20% of the gross profits you derive from
the use of Project Gutenberg™ works calculated using the
method you already use to calculate your applicable taxes. The
fee is owed to the owner of the Project Gutenberg™ trademark,
but he has agreed to donate royalties under this paragraph to
the Project Gutenberg Literary Archive Foundation. Royalty
payments must be paid within 60 days following each date on
which you prepare (or are legally required to prepare) your
periodic tax returns. Royalty payments should be clearly marked
as such and sent to the Project Gutenberg Literary Archive
Foundation at the address specified in Section 4, “Information
about donations to the Project Gutenberg Literary Archive
Foundation.”
• You provide a full refund of any money paid by a user who

notifies you in writing (or by e-mail) within 30 days of receipt that
s/he does not agree to the terms of the full Project Gutenberg™
License. You must require such a user to return or destroy all
copies of the works possessed in a physical medium and
discontinue all use of and all access to other copies of Project
Gutenberg™ works.
• You provide, in accordance with paragraph 1.F.3, a full refund of

any money paid for a work or a replacement copy, if a defect in
the electronic work is discovered and reported to you within 90
days of receipt of the work.
• You comply with all other terms of this agreement for free
distribution of Project Gutenberg™ works.
1.E.9. If you wish to charge a fee or distribute a Project

Gutenberg™ electronic work or group of works on different
terms than are set forth in this agreement, you must obtain
permission in writing from the Project Gutenberg Literary
Archive Foundation, the manager of the Project Gutenberg™
trademark. Contact the Foundation as set forth in Section 3
below.
1.F.
1.F.1. Project Gutenberg volunteers and employees expend

considerable effort to identify, do copyright research on,
transcribe and proofread works not protected by U.S. copyright
law in creating the Project Gutenberg™ collection. Despite
these efforts, Project Gutenberg™ electronic works, and the
medium on which they may be stored, may contain “Defects,”
such as, but not limited to, incomplete, inaccurate or corrupt
data, transcription errors, a copyright or other intellectual
property infringement, a defective or damaged disk or other
medium, a computer virus, or computer codes that damage or
cannot be read by your equipment.
1.F.2. LIMITED WARRANTY, DISCLAIMER OF DAMAGES -

Except for the “Right of Replacement or Refund” described in
paragraph 1.F.3, the Project Gutenberg Literary Archive
Foundation, the owner of the Project Gutenberg™ trademark,
and any other party distributing a Project Gutenberg™ electronic
work under this agreement, disclaim all liability to you for
damages, costs and expenses, including legal fees. YOU
AGREE THAT YOU HAVE NO REMEDIES FOR NEGLIGENCE,
STRICT LIABILITY, BREACH OF WARRANTY OR BREACH
OF CONTRACT EXCEPT THOSE PROVIDED IN PARAGRAPH
1.F.3. YOU AGREE THAT THE FOUNDATION, THE
TRADEMARK OWNER, AND ANY DISTRIBUTOR UNDER
THIS AGREEMENT WILL NOT BE LIABLE TO YOU FOR
ACTUAL, DIRECT, INDIRECT, CONSEQUENTIAL, PUNITIVE
OR INCIDENTAL DAMAGES EVEN IF YOU GIVE NOTICE OF
THE POSSIBILITY OF SUCH DAMAGE.
1.F.3. LIMITED RIGHT OF REPLACEMENT OR REFUND - If

you discover a defect in this electronic work within 90 days of
receiving it, you can receive a refund of the money (if any) you
paid for it by sending a written explanation to the person you
received the work from. If you received the work on a physical
medium, you must return the medium with your written
explanation. The person or entity that provided you with the
defective work may elect to provide a replacement copy in lieu
of a refund. If you received the work electronically, the person or
entity providing it to you may choose to give you a second
opportunity to receive the work electronically in lieu of a refund.
If the second copy is also defective, you may demand a refund
in writing without further opportunities to fix the problem.
1.F.4. Except for the limited right of replacement or refund set

forth in paragraph 1.F.3, this work is provided to you ‘AS-IS’,
WITH NO OTHER WARRANTIES OF ANY KIND, EXPRESS
OR IMPLIED, INCLUDING BUT NOT LIMITED TO
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR
ANY PURPOSE.
1.F.5. Some states do not allow disclaimers of certain implied

warranties or the exclusion or limitation of certain types of
damages. If any disclaimer or limitation set forth in this
agreement violates the law of the state applicable to this
agreement, the agreement shall be interpreted to make the
maximum disclaimer or limitation permitted by the applicable
state law. The invalidity or unenforceability of any provision of
this agreement shall not void the remaining provisions.
1.F.6. INDEMNITY - You agree to indemnify and hold the

Foundation, the trademark owner, any agent or employee of the
Foundation, anyone providing copies of Project Gutenberg™
electronic works in accordance with this agreement, and any
volunteers associated with the production, promotion and
distribution of Project Gutenberg™ electronic works, harmless
from all liability, costs and expenses, including legal fees, that
arise directly or indirectly from any of the following which you do
or cause to occur: (a) distribution of this or any Project
Gutenberg™ work, (b) alteration, modification, or additions or
deletions to any Project Gutenberg™ work, and (c) any Defect
you cause.
Section 2. Information about the Mission of

Project Gutenberg™
Project Gutenberg™ is synonymous with the free distribution of
electronic works in formats readable by the widest variety of
computers including obsolete, old, middle-aged and new
computers. It exists because of the efforts of hundreds of
volunteers and donations from people in all walks of life.
Volunteers and financial support to provide volunteers with the

assistance they need are critical to reaching Project
Gutenberg™’s goals and ensuring that the Project Gutenberg™
collection will remain freely available for generations to come. In
2001, the Project Gutenberg Literary Archive Foundation was
created to provide a secure and permanent future for Project
Gutenberg™ and future generations. To learn more about the
Project Gutenberg Literary Archive Foundation and how your
efforts and donations can help, see Sections 3 and 4 and the
Foundation information page at www.gutenberg.org.
Section 3. Information about the Project

Gutenberg Literary Archive Foundation
The Project Gutenberg Literary Archive Foundation is a non-
profit 501(c)(3) educational corporation organized under the
laws of the state of Mississippi and granted tax exempt status by
the Internal Revenue Service. The Foundation’s EIN or federal
tax identification number is 64-6221541. Contributions to the
Project Gutenberg Literary Archive Foundation are tax
deductible to the full extent permitted by U.S. federal laws and
your state’s laws.
The Foundation’s business office is located at 809 North 1500

West, Salt Lake City, UT 84116, (801) 596-1887. Email contact
links and up to date contact information can be found at the
Foundation’s website and official page at
www.gutenberg.org/contact
Section 4. Information about Donations to

the Project Gutenberg Literary Archive
Foundation
Project Gutenberg™ depends upon and cannot survive without
widespread public support and donations to carry out its mission
of increasing the number of public domain and licensed works
that can be freely distributed in machine-readable form
accessible by the widest array of equipment including outdated
equipment. Many small donations ($1 to $5,000) are particularly
important to maintaining tax exempt status with the IRS.
The Foundation is committed to complying with the laws

regulating charities and charitable donations in all 50 states of
the United States. Compliance requirements are not uniform
and it takes a considerable effort, much paperwork and many
fees to meet and keep up with these requirements. We do not
solicit donations in locations where we have not received written
confirmation of compliance. To SEND DONATIONS or
determine the status of compliance for any particular state visit
www.gutenberg.org/donate.
While we cannot and do not solicit contributions from states

where we have not met the solicitation requirements, we know
of no prohibition against accepting unsolicited donations from
donors in such states who approach us with offers to donate.
International donations are gratefully accepted, but we cannot

make any statements concerning tax treatment of donations
received from outside the United States. U.S. laws alone swamp
our small staff.
Please check the Project Gutenberg web pages for current

donation methods and addresses. Donations are accepted in a
number of other ways including checks, online payments and
credit card donations. To donate, please visit:
www.gutenberg.org/donate.
Section 5. General Information About Project

Gutenberg™ electronic works
Professor Michael S. Hart was the originator of the Project
Gutenberg™ concept of a library of electronic works that could
be freely shared with anyone. For forty years, he produced and
distributed Project Gutenberg™ eBooks with only a loose
network of volunteer support.
Project Gutenberg™ eBooks are often created from several

printed editions, all of which are confirmed as not protected by
copyright in the U.S. unless a copyright notice is included. Thus,
we do not necessarily keep eBooks in compliance with any
particular paper edition.
Most people start at our website which has the main PG search
facility: www.gutenberg.org.
This website includes information about Project Gutenberg™,

including how to make donations to the Project Gutenberg
Literary Archive Foundation, how to help produce our new
eBooks, and how to subscribe to our email newsletter to hear
about new eBooks.

Accounting For Governmental and Nonprofit Entities 16th Edition Reck Test Bank Full Chapter PDF

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Accounting For Governmental and Nonprofit Entities 16th Edition Reck Test Bank Full Chapter PDF

Uploaded by

Copyright:

Available Formats

Accounting for Governmental and

Nonprofit Entities 16th Edition Reck

Accounting for the Business-type Activities of State and Local

True / False Questions

25. Governments can follow either the GASB or FASB Codification.

Multiple Choice Questions

C. Restricted net position.

A. Net investment in capital assets, Reserved, Unreserved.

B. Designated, Undesignated, Restricted, Unrestricted.

C. Net investment in capital assets, Restricted, Unrestricted.

D. Contributed capital, Net investment in capital assets, Reserved, Unreserved.

B. Investment trust fund.

38. Internal service funds should be used only if

A. The reporting government is the predominant participant in the activity.

B. The reporting government provides services primarily to external participants.

A. Internal service fund.

D. Capital projects fund.

B. The customers who primarily benefit from the fund's service.

C. The number of basic financial statements required.

41. Depreciation on capital assets used by an enterprise fund of a government

A. Should not be recorded for infrastructure assets.

B. Should be recorded in the General Fund as an expenditure.

C. Should be recorded in the governmental activities accounts.

D. Should be recorded in the enterprise fund as an expense.

A. Both proprietary and governmental funds.

B. Proprietary but not governmental funds.

C. Governmental but not proprietary funds.

D. Proprietary and fiduciary funds.

A. Electronic data processing.

B. Central purchasing, warehousing, and issuing of supplies.

C. Municipal golf course.

A. A debit to Cost of Supplies Issued.

B. A debit to Loans Receivable.

C. A debit to Billings to Department.

D. A debit to Inventory of Supplies.

A. A debit to Cost of Supplies Issued.

B. A credit to Interfund Loans Payable.

D. A credit to Billings to Department.

B. Proprietary funds record long-term debt directly in the fund accounts.

C. Proprietary funds record capital assets directly in the fund accounts.

D. Proprietary funds present a statement of cash flows.

A. Modified accrual basis: Yes; accrual basis: No

B. Modified accrual basis: No; accrual basis: Yes

C. Modified accrual basis: Yes; accrual basis: Yes

D. Modified accrual basis: No; accrual basis: No

D. An internal service fund normally does not use budgetary accounts.

A. Statement of revenues, expenditures, and changes in fund balance.

B. Statement of revenues, expenses, and changes in net position.

C. Statement of net position.

D. Statement of cash flows.

A. Cover variable costs only.

B. Cover full costs (both fixed and variable).

B. Interfund Transfer In.

C. Interfund Transfer Out.

A. Interfund Transfers In.

D. Cost of Providing Rentals to Other Funds and Units.

A. A debit to Sales of Water.

B. A debit to Cash - Restricted.

C. A debit to Customer Accounts Receivable.

D. All of the above.

A. A credit to Customer Deposits.

B. A debit to Customer Deposits.