ACCT 4421- CH 5 Questions and Answers
100% Solved
In May 2012, Nolanville repaid $2M of the bonds that it had issued in 2007. In its 2012 fund and
government-wide statements, Nolanville should report an expenditure/expense relation to the
repayment of the bonds of Fund Statements: $2M
Govt-Wide: $0
consumption method A government would account for inventory the same as would a
business, with one additional feature-the designation of an amount equal to the inventory balance
as nonspendable, as opposed to spendable.
expenditures Under the modified accrual basis of accounting, governmental funds are
more concerned with this. They are narrower in scope, decreases in financial resources, and are
recognized when an asset is acquired.
expenses Proprietary funds focus more on this. They are decreases in economic resources
and are recognized when it is consumed.
, financial resources Cash and other assets that are expected to be transformed into cash in
the normal course of operations.
object Classifications such as payroll, insurance, supplies.
purchases method A government would record the purchase of the inventory as an
expenditure. It is consistent with full accrual accounting.
zero coupon bonds Bonds pay zero interest each period and are sold at a deep discount.
Upon maturity the full amount is paid.
reciprocal interfund activity This is the internal equivalent of exchange transactions in
which the parties receive and surrender consideration of approximately equal value.
nonreciprocal interfund activity The internal equivalent of nonexchange transactions.
Such as the transfer for "start-up capital".
100% Solved
In May 2012, Nolanville repaid $2M of the bonds that it had issued in 2007. In its 2012 fund and
government-wide statements, Nolanville should report an expenditure/expense relation to the
repayment of the bonds of Fund Statements: $2M
Govt-Wide: $0
consumption method A government would account for inventory the same as would a
business, with one additional feature-the designation of an amount equal to the inventory balance
as nonspendable, as opposed to spendable.
expenditures Under the modified accrual basis of accounting, governmental funds are
more concerned with this. They are narrower in scope, decreases in financial resources, and are
recognized when an asset is acquired.
expenses Proprietary funds focus more on this. They are decreases in economic resources
and are recognized when it is consumed.
, financial resources Cash and other assets that are expected to be transformed into cash in
the normal course of operations.
object Classifications such as payroll, insurance, supplies.
purchases method A government would record the purchase of the inventory as an
expenditure. It is consistent with full accrual accounting.
zero coupon bonds Bonds pay zero interest each period and are sold at a deep discount.
Upon maturity the full amount is paid.
reciprocal interfund activity This is the internal equivalent of exchange transactions in
which the parties receive and surrender consideration of approximately equal value.
nonreciprocal interfund activity The internal equivalent of nonexchange transactions.
Such as the transfer for "start-up capital".
