ACCY 4070 - Exercise 9-2 Multiple Choice

Ch. 9 Financial Reporting of State and Local Governments - Ex 9-2 (LO9-1 through LO9-5)

1. The members of the Museum Board of the City of Springfield are appointed by the City of Springfield City Council, which has agreed to finance any operating deficits of the museum. Under these conditions:

The museum is a component unit of the city.

2. Raider City has established a legally separate public financing corporation to issue debt for the city's capital projects. The corporation's debt will be paid by the city. How should the public financing corporation be reported by the city?

A blended component unit.

3. Which of the following statements is used to determine whether a component unit should be classified as major?

It has a significant financial relationship with the primary government.

4. Interim government financial reports

Are important for budgetary and cash management purposes.

5. The annual comprehensive financial report (ACFR) of a government reporting entity should contain a statement of cash flows for which of the following? (Governmental Funds / Proprietary Funds)

Governmental Funds: No; Proprietary Funds: Yes

6. Which of the following terms would be used when describing a primary government?

All of the terms listed would be used to describe a primary government.

7. A city ordinance requires that the city maintain a level of resources equal to at least 5 percent of the city's operating revenues for the period. How would these resources be classified in the city's fund balances?

Committed fund balance.

8. Which of the following require a statement of changes in net position?

Fiduciary funds.

9. What are intra-entity transactions?

Exchange or nonexchange transactions between a primary government and its component units.

10. Which of the following would NOT be included as a reconciling item in reconciling the governmental funds statement of revenues, expenditures, and changes in fund balances to the government-wide statement of activities?

Issuance of a short-term note payable.

11. A positive unassigned fund balance can be found in which of the following funds?

General fund.

12. A city established a special revenue fund for federal Department of Transportation funds that are to be used for street construction, maintenance, and repair. How would the fund balance for the special revenue fund be classified?

Restricted.

13. The city manager set aside $100,000 during the current fiscal year to extend the city's bike trails during the next fiscal year. How would the fund balance be classified for the $100,000 at the end of the current fiscal year?

Assigned.

14. Due to differences in bases of accounting, which of the following would be included as a reconciling item in reconciling the governmental funds balance sheet to the government-wide statement of net position?

Interest payable on bonds payable at fiscal year-end.

15. Which of the following would be considered a special purpose framework for accounting?

Cash framework.