Gleim Question Test 3

The following information pertains to Pine City’s general fund for Year 1:

Appropriations	$6,500,000
Expenditures	5,000,000
Other financing sources	1,500,000
Other financing uses	2,000,000
Revenues	8,000,000

After Pine City’s general fund accounts were closed at the end of Year 1, the fund balance increased by

a. $3,000,000

b. $2,500,000

c. $1,500,000

d. $1,000,000

b

During the current year, Knoxx County levied property taxes of $2,000,000, of which 1% is expected to be uncollectible. The following amounts were collected during the current year:

Prior year taxes collected within the first 60 days of the current year	$    50,000
Prior year taxes collected between 60 and 90 days into the current year	120,000
Current year taxes collected in the current year	1,800,000
Current year taxes collected within the first 60 days of the subsequent year	80,000

What amount of property tax revenue should Knoxx County report in its government-wide statement of activities?

a. $1,800,000

b. $1,970,000

c. $1,980,000

d. $2,000,000

c

In Soan County’s general fund statement of revenues, expenditures, and changes in fund balances, which of the following has an effect on the excess of revenues over expenditures?

a. Purchase of fixed assets.

b. Payment to a debt-service fund.

c. Special items.

d. Proceeds from the sale of capital assets.

a

A county’s balances in the general fund included the following:

Appropriations	$745,000
Encumbrances	37,250
Expenditures	298,000
Vouchers payable	55,875

What is the remaining amount available for use by the county?

a. $353,875

b. $391,125

c. $409,750

d. $447,000

c

In which situations, if any, should property taxes due to a governmental unit be recorded as deferred inflows of resources?

1. Property taxes receivable are recognized in advance of the year for which they are levied.

2. Property taxes receivable are collected in advance of the year in which they are levied.

a. I only.

b. Both I and II.

c. II only.

d. Neither I nor II.

b

A transaction that is unusual in nature and infrequent in occurrence most likely is reported in the governmental funds statement of revenues, expenditures, and changes in fund balances

a. After other financing sources and uses.

b. Separately in a special items classification.

c. As an other financing source or use.

d. As a revenue or expense.

a

The following information pertains to property taxes levied by Oak City for calendar Year 6:

Collections during Year 6	$500,000
Expected collections during the first 60 days of Year 7	100,000
Expected collections during the balance of Year 7	60,000
Expected collections during January Year 8	30,000
Estimated to be uncollectible	10,000
Total levy	$700,000

What amount should Oak report for Year 6 net property tax revenues?

a. $700,000

b. $690,000

c. $600,000

d. $500,000

c

During the current year, Wythe County levied $2,000,000 property taxes, 1% of which is expected to be uncollectible. During the year, the county collected $1,800,000 and wrote off $15,000 as uncollectible. What amount should Wythe County report as property tax revenue in its government-wide statement of activities for the current year?

a. $1,800,000

b. $1,980,000

c. $1,985,000

d. $2,000,000

b

What is the major difference between an exchange transaction and a nonexchange transaction for governmental units?

a. The relationship between the amount of value given and received.

b. Time requirements and whether the transaction is required by law.

c. Purpose restrictions placed upon fund balances.

d. Whether resources acquired can be further exchanged.

a

On April 1, Oak County incurred the following expenditures in issuing long-term bonds:

Issue costs	$400,000
Debt insurance	90,000

When Oak establishes the accounting for operating debt service, what amount should be deferred and amortized over the life of the bonds?

a. $0

b. $90,000

c. $400,000

d. $490,000

a

The renovation of Fir City’s municipal park was accounted for in a capital projects fund. Financing for the renovation, which was begun and completed during the current year, came from the following sources:

Grant from state government	$400,000
Proceeds from general obligation bond issue	500,000
Transfer from Fir’s general fund	100,000

In its governmental fund statement of revenues, expenditures, and changes in fund balances for the current year, Fir should report these amounts as

Revenues

Other Financing Sources

Revenues $1,000,000

Other FinancingSources $0

Revenues $900,000

Other FinancingSources $100,000

Revenues $400,000

Other FinancingSources $600,000

Revenues $0

Other FinancingSources $1,000,000

c

Which of the following transactions is an expenditure of a governmental unit’s general fund?

a. Contribution of enterprise fund capital by the general fund.

b. Operating subsidy transfer from the general fund to an enterprise fund.

c. Routine employer contributions from the general fund to a pension trust fund.

d. Transfer from the general fund to a capital projects fund.

c

A capital projects fund for a new city courthouse recorded a receivable of $300,000 for a state grant and a $450,000 transfer from the general fund. What amount should be reported as revenue by the capital projects fund?

a. $0

b. $300,000

c. $450,000

d. $750,000

b

Japes City issued $1,000,000 general obligation bonds at 101 to build a new city hall. As part of the bond issue, the city also paid a $500 underwriter fee and $2,000 in debt issue costs. What amount should Japes City report as other financing sources?

a. $1,010,000

b. $1,008,000

c. $1,007,500

d. $1,000,000

a

The City of Curtain had the following interfund transactions during the month of May:

1. Billing by the internal service fund to a department financed by the general fund for services rendered in the amount of $5,000.

2. Transfer of $200,000 from the general fund to establish a new enterprise fund.Routine transfer of $50,000 from the general fund to the debt service fund.

3. Routine transfer of $50,000 from the general fund to the debt service fund.

What was the total reciprocal interfund activity for Curtain during May?

a. $5,000

b. $55,000

c. $200,000

d. $255,000

a

During the year, a city’s electric utility, which is operated as an enterprise fund, rendered billings for electricity supplied to the general fund. Which of the following accounts should be debited by the general fund?

a. Appropriations.

b. Expenditures.

c. Due to electric utility enterprise fund.

d. Other financing uses -- interfund transfer.

b

Zarr Town levied property taxes of $500,000, of which 1% is expected to be uncollectible. During the year, Zarr Town collected $450,000. What amount of property tax revenue should Zarr Town report in its government-wide statement of activities for the current year?

a. $0

b. $450,000

c. $495,000

d. $500,000

c

A local government’s utility sells part of its output to the primary government. The utility is accounted for in an enterprise fund. In the annual comprehensive financial report (ACFR), the sale of the utility’s output most likely is accounted for as

a. An elimination in the government-wide statement of activities.

b. An interfund transfer.

c. Expenditures in the general fund.

d. Interfund receivables and payables in the government-wide statement of net position.

c

Which of the following activities should be excluded when governmental fund financial statements are converted to government-wide financial statements?

a. Proprietary activities.

b. Fiduciary activities.

c. Government activities.

e. Enterprise activities.

b

If a capital asset is donated to a governmental unit, the asset is accounted for in an enterprise fund, and eligibility requirements are met, it should be recorded

a. At the donor’s carrying amount as revenue.

b. At acquisition value as revenue.

c. At the lower of the donor’s carrying amount or estimated fair value as deferred inflows of resources.

d. As a memorandum entry only.

b

The government-wide statement of activities reports

a. Activities accounted for in governmental funds at least at the segment level of detail.

b. Activities accounted for in the enterprise funds at least at the fund level of detail.

c. Net (expense) revenue for each function equal to expenses minus program revenues.

d. Net (expense) revenue for each function equal to expenses minus general revenues.

c

Government-wide financial statements

a. Display individual funds.

b. Display aggregated information about fund types.

c. Exclude information about discretely presented component units.

d. Use separate columns to distinguish between governmental and business-type activities.

d

Which of the following capital assets are least likely to be considered infrastructure assets of a state or local government?

a. Buildings.

b. Sewer systems.

c. Roads.

d. Lighting systems.

a

General revenues reported in the government-wide statement of activities

a. Include all taxes.

b. Exclude taxes levied for a specific purpose.

c. Are aggregated with contributions, special and extraordinary items, and transfers in a line item.

d. Exclude interest and grants.

a

If a government reports eligible infrastructure assets using the modified approach,

a. Complete condition assessments must be performed annually.

b. Expenditures for the assets are capitalized.

c. No depreciation expense is required to be recognized.

d. The assets are not being preserved at or above the established and disclosed condition level.

c

When a lease of a governmental unit represents the acquisition of a general capital asset, the acquisition should be reflected as

a. An expenditure but not as an other financing source.

b. An other financing source but not as an expenditure.

c. Both an expenditure and an other financing source.

d. Neither an expenditure nor an other financing source.

c

A city council designates funds in the enterprise fund for future equipment replacement. The enterprise fund should report this as

a. A restricted component of net position.

b. A net investment in capital assets.

c. A designated component of net position.

d. An unrestricted component of net position.

d

A state or local government’s general capital assets and general long-term liabilities must be reported in the

a. Governmental funds financial statements.

b. General account groups.

c. General fund’s balance sheet.

e. Governmental activities column of the government-wide statement of net position.

d