Governmental Accounting questions
with validated answers.
Agency Trust ANS -Where are the debt service transactions of a special assessment for which the
government is not obligated in any manner reported?
General Fund and as an expenditure ANS -Which governmental fund bears the cost of funding the
pension plan and how is this cost reported under the fund?
Pension (and other employee benefits) trust fund. ANS -Deferred compensation plans, for other than
proprietary fund employees, adopted under IRC Sec. 457
should be reported in a:
Agency Fund ANS -In which of the following funds should the debt service transactions of a special
assessment issue for which the government is not obligated in any matter be reported?
Agency ANS -Which fund is used to account for assets (such as taxes collected) held by a governmental
unit (such as a county) acting as an agent for another governmental unit (such as a school district)?
Ex: Taxes collected and held by Franklin County for a separate school district would be accounted for in
which fund?
Special Revenue ANS -Which fund accounts for the proceeds of specific revenue sources that are legally
restricted or earmarked to expenditures for specified purposes?
Internal Service (SE) ANS -Which fund accounts for the financing of goods or services provided by one
department to other departments within the governmental unit on a cost reimbursement basis?
$1,000,000 - General Fund
$200,000 - Pension Trust Fund ANS -The following were among Cal's cash receipts during the current
year:
Unrestricted state grant: $1,000,000
,Interest on bank accounts held for employees' pension plan: $200,000
Where should each cash receipt be classified?
Private Purpose Trust ANS -Where should escheat property held for individuals, private organizations, or
another government be reported?
Private Purpose Trust Fund ANS -Which fund is the designated fund for reporting all other trust
arrangements under which principal and income are for the benefit of one of the following: Specific
Individuals, Private Organizations and Other Governments
Expendable, both Principal and Interest can be used ANS -Are restricted funds held in a Special Revenue
Fund, for public use, expendable (Interest and Principal) or non-expendable (Interest Only)?
Non-Expendable, Only Interest can be used ANS -Are restricted funds held in a Permanent Fund, for
public use, expendable (Interest and Principal) or non-expendable (Interest Only)?
Expendable, both Principal and Interest can be used ANS -Are restricted funds held in a Private Purpose
Trust Fund, for private use, expendable (Interest and Principal) or non-expendable (Interest Only)?
Statement of Fiduciary Net Position (Balance Sheet) and Statement of Changes in Fiduciary Net Position
(Income Statement) ANS -What are the two financial statements required for an Investment Trust Fund?
Statement of Plan Net Position (Balance Sheet) and Statement of Changes in Plan Net Position (Income
Statement) ANS -What are the two financial statements required for a Pension Trust Fund?
Statement of Net Position (Balance Sheet) and Statement of Changes in Net Position (Income
Statement) ANS -What are the two financial statements required for a Private Purpose Trust Fund?
Statement of Fiduciary Net Position (Balance Sheet). No I/S type F/S because there is no profit motive
ANS -What financial statement is required for an Agency Trust Fund?
Agency (no monitoring) ANS -In which fund would cash conduit arrangements such as pass-through
grants, food stamps, traffic citations, alimony, child support and other court ordered payments be kept?
,Yes, although these transfers are not recorded as revenues or expenditures, they do affect both funds'
expendable resources, and, therefore, affect the results of operations for both funds. ANS -Do interfund
transfers affect the results of operations in Governmental Funds and Proprietary Funds Financial
Statements?
Expenditure ANS -The City of Sequoia made contributions to the police pension fund during the year
ended December 31, Year 1. The contribution would be recorded in the General Fund as an:
Liability - due to other fund:
DR:Cash xxx
CR:Due to other units xxx (amount due)
CR: Due to county/general fund xxx (retained fee) ANS -How should a retention fee in the Agency Fund
be accounted for?
Private Purpose Fund ANS -Where would abandoned funds (such as abandoned refundable deposits) be
held?
Investment Trust Fund ANS -Investment pools operated by a government that account for the
investments of other entities would display those investments in which type of fund?
Enterprise Fund: $500,000 expense
Pension Trust Fund: $100,000 deduction ANS -At year end, Lily City reported the following information
related to OPEB (other postemployment benefits), for the water enterprise fund:
Benefits paid: $100,000
Annual required contribution: $500,000
Where would each cash outflow be reported in fund financial statements?
, Operational accountability (F/S) and Fiscal Accountability (for specific funding) ANS -What are the dual
objectives of Governmental Accountability and Reporting?
Timeliness, Consistency, Comparability, Reliability ANS -What are the four characteristics that
governmental financial statements seek to achieve? (TCCR)
Accountability ANS -What is the paramount objective of Governmental Financial Reporting?
Interperiod equity ANS -A balanced budget helps to demonstrate what?
GASB (Governmental Accounting Standards Board) ANS -What agency establishes accounting and
reporting standards for governments?
GASB 34 ANS -_______ defines a fund structure for governments.
Full accrual and economic resources measurement focus ANS -Government-wide financial statements
use which basis of accounting and which measurement focus?
Governmental (General, Special Revenue, Debt Service, Capital Project and Permanent) ANS -
__________ funds focus on the flow of funds (source, use, and balance of current financial resources)
Proprietary (Internal Service Fund and Enterprise) and Fiduciary (Pension, Agency, Private Purpose,
Investment) ANS -_______ funds focus on income determination and capital maintenance.
Modified accrual accounting and current financial resources measurement focus ANS -Governmental
fund financial statements use which basis of accounting and which measurement focus?
Current Assets + Deferred Outflows = Current Liabilities + Deferred Inflows + Fund Balance ANS -What
composes the Balance Sheet of Governmental fund (GRaSPP) financial statements?
Statement of Revenues, Expenditures, and Changes in Fund Balance:
with validated answers.
Agency Trust ANS -Where are the debt service transactions of a special assessment for which the
government is not obligated in any manner reported?
General Fund and as an expenditure ANS -Which governmental fund bears the cost of funding the
pension plan and how is this cost reported under the fund?
Pension (and other employee benefits) trust fund. ANS -Deferred compensation plans, for other than
proprietary fund employees, adopted under IRC Sec. 457
should be reported in a:
Agency Fund ANS -In which of the following funds should the debt service transactions of a special
assessment issue for which the government is not obligated in any matter be reported?
Agency ANS -Which fund is used to account for assets (such as taxes collected) held by a governmental
unit (such as a county) acting as an agent for another governmental unit (such as a school district)?
Ex: Taxes collected and held by Franklin County for a separate school district would be accounted for in
which fund?
Special Revenue ANS -Which fund accounts for the proceeds of specific revenue sources that are legally
restricted or earmarked to expenditures for specified purposes?
Internal Service (SE) ANS -Which fund accounts for the financing of goods or services provided by one
department to other departments within the governmental unit on a cost reimbursement basis?
$1,000,000 - General Fund
$200,000 - Pension Trust Fund ANS -The following were among Cal's cash receipts during the current
year:
Unrestricted state grant: $1,000,000
,Interest on bank accounts held for employees' pension plan: $200,000
Where should each cash receipt be classified?
Private Purpose Trust ANS -Where should escheat property held for individuals, private organizations, or
another government be reported?
Private Purpose Trust Fund ANS -Which fund is the designated fund for reporting all other trust
arrangements under which principal and income are for the benefit of one of the following: Specific
Individuals, Private Organizations and Other Governments
Expendable, both Principal and Interest can be used ANS -Are restricted funds held in a Special Revenue
Fund, for public use, expendable (Interest and Principal) or non-expendable (Interest Only)?
Non-Expendable, Only Interest can be used ANS -Are restricted funds held in a Permanent Fund, for
public use, expendable (Interest and Principal) or non-expendable (Interest Only)?
Expendable, both Principal and Interest can be used ANS -Are restricted funds held in a Private Purpose
Trust Fund, for private use, expendable (Interest and Principal) or non-expendable (Interest Only)?
Statement of Fiduciary Net Position (Balance Sheet) and Statement of Changes in Fiduciary Net Position
(Income Statement) ANS -What are the two financial statements required for an Investment Trust Fund?
Statement of Plan Net Position (Balance Sheet) and Statement of Changes in Plan Net Position (Income
Statement) ANS -What are the two financial statements required for a Pension Trust Fund?
Statement of Net Position (Balance Sheet) and Statement of Changes in Net Position (Income
Statement) ANS -What are the two financial statements required for a Private Purpose Trust Fund?
Statement of Fiduciary Net Position (Balance Sheet). No I/S type F/S because there is no profit motive
ANS -What financial statement is required for an Agency Trust Fund?
Agency (no monitoring) ANS -In which fund would cash conduit arrangements such as pass-through
grants, food stamps, traffic citations, alimony, child support and other court ordered payments be kept?
,Yes, although these transfers are not recorded as revenues or expenditures, they do affect both funds'
expendable resources, and, therefore, affect the results of operations for both funds. ANS -Do interfund
transfers affect the results of operations in Governmental Funds and Proprietary Funds Financial
Statements?
Expenditure ANS -The City of Sequoia made contributions to the police pension fund during the year
ended December 31, Year 1. The contribution would be recorded in the General Fund as an:
Liability - due to other fund:
DR:Cash xxx
CR:Due to other units xxx (amount due)
CR: Due to county/general fund xxx (retained fee) ANS -How should a retention fee in the Agency Fund
be accounted for?
Private Purpose Fund ANS -Where would abandoned funds (such as abandoned refundable deposits) be
held?
Investment Trust Fund ANS -Investment pools operated by a government that account for the
investments of other entities would display those investments in which type of fund?
Enterprise Fund: $500,000 expense
Pension Trust Fund: $100,000 deduction ANS -At year end, Lily City reported the following information
related to OPEB (other postemployment benefits), for the water enterprise fund:
Benefits paid: $100,000
Annual required contribution: $500,000
Where would each cash outflow be reported in fund financial statements?
, Operational accountability (F/S) and Fiscal Accountability (for specific funding) ANS -What are the dual
objectives of Governmental Accountability and Reporting?
Timeliness, Consistency, Comparability, Reliability ANS -What are the four characteristics that
governmental financial statements seek to achieve? (TCCR)
Accountability ANS -What is the paramount objective of Governmental Financial Reporting?
Interperiod equity ANS -A balanced budget helps to demonstrate what?
GASB (Governmental Accounting Standards Board) ANS -What agency establishes accounting and
reporting standards for governments?
GASB 34 ANS -_______ defines a fund structure for governments.
Full accrual and economic resources measurement focus ANS -Government-wide financial statements
use which basis of accounting and which measurement focus?
Governmental (General, Special Revenue, Debt Service, Capital Project and Permanent) ANS -
__________ funds focus on the flow of funds (source, use, and balance of current financial resources)
Proprietary (Internal Service Fund and Enterprise) and Fiduciary (Pension, Agency, Private Purpose,
Investment) ANS -_______ funds focus on income determination and capital maintenance.
Modified accrual accounting and current financial resources measurement focus ANS -Governmental
fund financial statements use which basis of accounting and which measurement focus?
Current Assets + Deferred Outflows = Current Liabilities + Deferred Inflows + Fund Balance ANS -What
composes the Balance Sheet of Governmental fund (GRaSPP) financial statements?
Statement of Revenues, Expenditures, and Changes in Fund Balance:
