ACCT 4421: Module 5 Practice
Questions comprehensive Questions and
Answers with Verified Solutions
Question 1:
Bilberry County voted to establish an internal service fund to account for
printing and copying for all its departments and agencies. The county
engaged in the following activities related to the new fund. The county
commission voted to transfer $300,000 from the general fund to the
internal service fund to establish the new fund. Dr. ? for $300,000 Cr. ?
for $300,000 Options: Due to General Fund Cash Revenue Nonreicprocal
Transfer-In from General Fund
Answer:
Dr. Cash Cr. Nonreciprocal Transfer-In from General Fund
Question 2:
Falmouth City owns and operates a mini-bus system which it accounts for
in an enterprise fund. Choose the journal entry to be used to record the
following transactions, which occurred in a recent year. The mini-bus
system issued $5 million of 8 percent revenue bonds at par and used the
proceeds to acquire new mini-buses. Dr. ? for $5M Cr. ? for $5M
Answer:
Dr. Mini-buses Cr. Revenue Bonds Payable
,Question 3:
Falmouth City owns and operates a mini-bus system which it accounts for
in an enterprise fund. Choose the journal entry to be used to record the
following transactions, which occurred in a recent year.
Answer:
Dr. Interest Expense Cr. Accrued Interest
Question 4:
When insurance premiums went through the roof, Jolly City decided to
"self-insure." It established an internal service fund (ISF), setting aside
resources for potential claims in the new fund. During the year, the
following transactions were recorded in the ISF: The ISF recognized $1.5
million in claims expense/liabilities in accordance with GASB standards
and paid $1.3 million of those claims. Based on an actuarial calculation,
the ISF billed the other funds of the city for $2.0 million. Of this amount,
$1.2 million was billed to the city's general fund and $0.8 million was
billed to the city's water and sewer enterprise fund. The actuarial
valuation included a reasonable provision for future catastrophe losses of
$0.3 million. Choose the journal entries to record these transactions in the
city's self-insurance ISF. A. Dr. Cash $2M & Expense - Claims $1.3M Cr.
Revenue $2M & Cash $1.3M B. Dr. Cash $2M, Expense - Claims $1.5M
& Claims Liability $.02M Cr. Revenue $2M & Cash $2M C. No options are
correct
Answer:
B. Dr. Cash $2M, Expense - Claims $1.5M & Claims Liability $.02M Cr.
Revenue $2M & Cash $2M
Question 5:
State University maintains accounts for each of its student groups. The
monies collected by the Accounting Fraternity are deposited with the
university. As the fraternity authorizes disbursements of its funds, the
university disburses the monies. During the year, the fraternity engaged
in the following transactions. Choose the appropriate entry for each
transaction to be recorded on the books of the university. The fraternity
, operated a book exchange on a consignment basis and collected The
fraternity operated a book exchange on a consignment basis and
collected revenues of $10,000. It authorized the university to write $9,000
of checks to the students whose books the fraternity had sold. The
fraternity was pleased with the $1,000 profit. Entry to record payments for
consigned books: A. Dr. Due to Fraternity $9,000 Cr. Cash $9,000 B. Dr.
Expense $9,000 Cr. Cash $9,000 C. No options are correct D. Dr.
Expenditure $9,000 Cr. Cash $9,000
Answer:
A. Dr. Due to Fraternity $9,000 Cr. Cash $9,000
Question 6:
Bilberry County voted to establish an internal service fund to account for
printing and copying for all its departments and agencies. The county
engaged in the following activities related to the new fund.The County
Answer:
B. Dr. Cash $2,020,000 Cr. Deferred Bond Premium $20,000 & Bonds
Payable $2,000,000
Questions comprehensive Questions and
Answers with Verified Solutions
Question 1:
Bilberry County voted to establish an internal service fund to account for
printing and copying for all its departments and agencies. The county
engaged in the following activities related to the new fund. The county
commission voted to transfer $300,000 from the general fund to the
internal service fund to establish the new fund. Dr. ? for $300,000 Cr. ?
for $300,000 Options: Due to General Fund Cash Revenue Nonreicprocal
Transfer-In from General Fund
Answer:
Dr. Cash Cr. Nonreciprocal Transfer-In from General Fund
Question 2:
Falmouth City owns and operates a mini-bus system which it accounts for
in an enterprise fund. Choose the journal entry to be used to record the
following transactions, which occurred in a recent year. The mini-bus
system issued $5 million of 8 percent revenue bonds at par and used the
proceeds to acquire new mini-buses. Dr. ? for $5M Cr. ? for $5M
Answer:
Dr. Mini-buses Cr. Revenue Bonds Payable
,Question 3:
Falmouth City owns and operates a mini-bus system which it accounts for
in an enterprise fund. Choose the journal entry to be used to record the
following transactions, which occurred in a recent year.
Answer:
Dr. Interest Expense Cr. Accrued Interest
Question 4:
When insurance premiums went through the roof, Jolly City decided to
"self-insure." It established an internal service fund (ISF), setting aside
resources for potential claims in the new fund. During the year, the
following transactions were recorded in the ISF: The ISF recognized $1.5
million in claims expense/liabilities in accordance with GASB standards
and paid $1.3 million of those claims. Based on an actuarial calculation,
the ISF billed the other funds of the city for $2.0 million. Of this amount,
$1.2 million was billed to the city's general fund and $0.8 million was
billed to the city's water and sewer enterprise fund. The actuarial
valuation included a reasonable provision for future catastrophe losses of
$0.3 million. Choose the journal entries to record these transactions in the
city's self-insurance ISF. A. Dr. Cash $2M & Expense - Claims $1.3M Cr.
Revenue $2M & Cash $1.3M B. Dr. Cash $2M, Expense - Claims $1.5M
& Claims Liability $.02M Cr. Revenue $2M & Cash $2M C. No options are
correct
Answer:
B. Dr. Cash $2M, Expense - Claims $1.5M & Claims Liability $.02M Cr.
Revenue $2M & Cash $2M
Question 5:
State University maintains accounts for each of its student groups. The
monies collected by the Accounting Fraternity are deposited with the
university. As the fraternity authorizes disbursements of its funds, the
university disburses the monies. During the year, the fraternity engaged
in the following transactions. Choose the appropriate entry for each
transaction to be recorded on the books of the university. The fraternity
, operated a book exchange on a consignment basis and collected The
fraternity operated a book exchange on a consignment basis and
collected revenues of $10,000. It authorized the university to write $9,000
of checks to the students whose books the fraternity had sold. The
fraternity was pleased with the $1,000 profit. Entry to record payments for
consigned books: A. Dr. Due to Fraternity $9,000 Cr. Cash $9,000 B. Dr.
Expense $9,000 Cr. Cash $9,000 C. No options are correct D. Dr.
Expenditure $9,000 Cr. Cash $9,000
Answer:
A. Dr. Due to Fraternity $9,000 Cr. Cash $9,000
Question 6:
Bilberry County voted to establish an internal service fund to account for
printing and copying for all its departments and agencies. The county
engaged in the following activities related to the new fund.The County
Answer:
B. Dr. Cash $2,020,000 Cr. Deferred Bond Premium $20,000 & Bonds
Payable $2,000,000
