ACCT 4421 Exam 2 ACTUAL Exam
Questions and CORRECT Answers
A town receives from the state its share of gas tax that was collected last month. Which fund
balance classification would best reflect the constraint on the use of this money? (the gas tax was
passed by the legislature and the proceeds of the gas tax can only be used for road and bridge
maintenance.
A. Non-spendable
B. Restricted
C. Unassigned
D. Committed - CORRECT ANSWER -B
A city and a land owner agree that the city will borrow $5 million to widen a road and add a
traffic signal that will be needed if the landowner contructs a major shopping center. An
agreement is made to dedicate the new property taxes that will come from the development to
repayment of the bond. This arrangement is commonly called a _________________
A. New Revenue Bond (NFB)
B. Tax Increment Financing (TIF)
C. General Obligation Property Bond (GO Bond)
D. Tax Qualified Obligation - CORRECT ANSWER - B. TIF
The legislature allocates $1 million to the City of Baton Rouge and the city can only use the
money to update fire department equipment. This constraint would result in the funds being
reflected as __________________ fund balance.
A Permanent
B Assigned
C Committed
D Restricted - CORRECT ANSWER - D. restricted
, A city spends $50,000 on a new truck that will be used by employees of the water department.
The money came out of a __________ fund.
A. Fiduciary Fund
B. Enterprise Fund
C. Special Revenue Fund
D. Capital Projects Fund - CORRECT ANSWER -B
Which of the following is NOT a proper categorization of a fund balance?
A Retained
B Committed
C Assigned
D Restricted - CORRECT ANSWER -A
A city golf course is primarily funded by user fees (known as greens fees) and proceeds from
concession sales. The operations of the city golf course would likely be accounted for in a
_________ fund. A Fiduciary Fund
B Enterprise Fund
C Special Revenue Fund
D Internal Service Fund - CORRECT ANSWER -B
Which governing body provides authoratative guidance to non-profit entities regarding financial
reporting?
A Both FASB and GASB
B GASB
C FASB
D AICPA and GASB - CORRECT ANSWER -C
The City of Clinton, Louisiana received a gift of $1,000,000 that is to be invested and only the
interest can be spent by the city. The interest income is to be used to maintain the city parks.
What type of fund will be set up for this money?
Questions and CORRECT Answers
A town receives from the state its share of gas tax that was collected last month. Which fund
balance classification would best reflect the constraint on the use of this money? (the gas tax was
passed by the legislature and the proceeds of the gas tax can only be used for road and bridge
maintenance.
A. Non-spendable
B. Restricted
C. Unassigned
D. Committed - CORRECT ANSWER -B
A city and a land owner agree that the city will borrow $5 million to widen a road and add a
traffic signal that will be needed if the landowner contructs a major shopping center. An
agreement is made to dedicate the new property taxes that will come from the development to
repayment of the bond. This arrangement is commonly called a _________________
A. New Revenue Bond (NFB)
B. Tax Increment Financing (TIF)
C. General Obligation Property Bond (GO Bond)
D. Tax Qualified Obligation - CORRECT ANSWER - B. TIF
The legislature allocates $1 million to the City of Baton Rouge and the city can only use the
money to update fire department equipment. This constraint would result in the funds being
reflected as __________________ fund balance.
A Permanent
B Assigned
C Committed
D Restricted - CORRECT ANSWER - D. restricted
, A city spends $50,000 on a new truck that will be used by employees of the water department.
The money came out of a __________ fund.
A. Fiduciary Fund
B. Enterprise Fund
C. Special Revenue Fund
D. Capital Projects Fund - CORRECT ANSWER -B
Which of the following is NOT a proper categorization of a fund balance?
A Retained
B Committed
C Assigned
D Restricted - CORRECT ANSWER -A
A city golf course is primarily funded by user fees (known as greens fees) and proceeds from
concession sales. The operations of the city golf course would likely be accounted for in a
_________ fund. A Fiduciary Fund
B Enterprise Fund
C Special Revenue Fund
D Internal Service Fund - CORRECT ANSWER -B
Which governing body provides authoratative guidance to non-profit entities regarding financial
reporting?
A Both FASB and GASB
B GASB
C FASB
D AICPA and GASB - CORRECT ANSWER -C
The City of Clinton, Louisiana received a gift of $1,000,000 that is to be invested and only the
interest can be spent by the city. The interest income is to be used to maintain the city parks.
What type of fund will be set up for this money?
