ACCT 4421 Exam 2 Review Questions with
Complete Solutions
Under the accrual basis of accounting, property tax revenues are recognized
A. when they are received in cash
B. in the year for which they were levied
C. in the year for which they were levied and when collection in cash is reasonably assured
D. when they are available to finance expenditures of the fiscal period B
Under the modified accrual basis of accounting, the amount of property tax revenues that should
be recognized by a government in the current year related to the current-year levy will be
A. the total amount of the levy
B. the expected collectible portion of the levy
C. the portion of the levy collected
D. the portion of the levy collected in the current year or within sixty days after the end of the
fiscal period D
Under the modified accrual basis of accounting, investment revenues for the current period
should include
,A. only interest and dividends received
B. all interest and dividends received during the period plus all accruals of interest and dividends
earned
C. all interest and dividends received plus gains and losses on securities that were sold during the
period
D. all interest and dividends received, all gains and losses on securities sold, and all changes in
market values on securities held in the portfolio at year-end D
Under the accrual basis of accounting used by governments, investment revenues for the current
period should include
A. only interest and dividends received
B. all interest and dividends received during the period plus all accruals of interest and dividends
earned
C. all interest and dividends received plus gains and losses on securities that were sold during the
period
D. all interest and dividends received, all gains and losses on securities sold, and all changes in
market values on securities held in the portfolio at year-end D
Under the modified accrual basis of accounting, imposed nonexchange revenues (such as fines)
should be recognized
,A. when assessed
B. when the government has an enforceable legal claim
C. when collected
D. when the government has an enforceable legal claim and when collected within the current
period or soon enough thereafter to be used to pay the liabilities of the current period D
Under the accrual basis of accounting, imposed nonexchange revenues (such as fines) should be
recognized
A. when assessed
B. when the government has an enforceable legal claim
C. when collected
D. when the government has an enforceable legal claim and when collected within the current
period or soon enough thereafter to be used to pay the liabilities of the current period B
Under the modified accrual basis of accounting, gains and losses on disposal of capital assets
A. are not recognized
B. are recognized when the proceeds (cash) of the sale are received (on the installment basis)
C. are recognized only if there is a gain
D. are recognized when the sale occurs, regardless of when the cash is collected A
, Under the accrual basis of accounting, gains and losses on disposal of capital assets
A. are not recognized
B. are recognized when the proceeds (cash) of the sale are received (on the installment basis)
C. are recognized only if there is a gain
D. are recognized when the sale occurs, regardless of when the cash is collected D
Under the modified accrual basis of accounting, license fees, permits, and other miscellaneous
revenue are generally recognized for practical purposes
A. when cash is received
B. when the exchange takes place
C. over the period during which the government obtains an enforceable legal claim
D. when related expenditures are incurred A
Ideally, under the accrual basis of accounting, license fees, permits, and other miscellaneous
revenue should be recognized
A. when cash is received
B. when the exchange takes place
C. over the period during which the government obtains an enforceable legal claim
Complete Solutions
Under the accrual basis of accounting, property tax revenues are recognized
A. when they are received in cash
B. in the year for which they were levied
C. in the year for which they were levied and when collection in cash is reasonably assured
D. when they are available to finance expenditures of the fiscal period B
Under the modified accrual basis of accounting, the amount of property tax revenues that should
be recognized by a government in the current year related to the current-year levy will be
A. the total amount of the levy
B. the expected collectible portion of the levy
C. the portion of the levy collected
D. the portion of the levy collected in the current year or within sixty days after the end of the
fiscal period D
Under the modified accrual basis of accounting, investment revenues for the current period
should include
,A. only interest and dividends received
B. all interest and dividends received during the period plus all accruals of interest and dividends
earned
C. all interest and dividends received plus gains and losses on securities that were sold during the
period
D. all interest and dividends received, all gains and losses on securities sold, and all changes in
market values on securities held in the portfolio at year-end D
Under the accrual basis of accounting used by governments, investment revenues for the current
period should include
A. only interest and dividends received
B. all interest and dividends received during the period plus all accruals of interest and dividends
earned
C. all interest and dividends received plus gains and losses on securities that were sold during the
period
D. all interest and dividends received, all gains and losses on securities sold, and all changes in
market values on securities held in the portfolio at year-end D
Under the modified accrual basis of accounting, imposed nonexchange revenues (such as fines)
should be recognized
,A. when assessed
B. when the government has an enforceable legal claim
C. when collected
D. when the government has an enforceable legal claim and when collected within the current
period or soon enough thereafter to be used to pay the liabilities of the current period D
Under the accrual basis of accounting, imposed nonexchange revenues (such as fines) should be
recognized
A. when assessed
B. when the government has an enforceable legal claim
C. when collected
D. when the government has an enforceable legal claim and when collected within the current
period or soon enough thereafter to be used to pay the liabilities of the current period B
Under the modified accrual basis of accounting, gains and losses on disposal of capital assets
A. are not recognized
B. are recognized when the proceeds (cash) of the sale are received (on the installment basis)
C. are recognized only if there is a gain
D. are recognized when the sale occurs, regardless of when the cash is collected A
, Under the accrual basis of accounting, gains and losses on disposal of capital assets
A. are not recognized
B. are recognized when the proceeds (cash) of the sale are received (on the installment basis)
C. are recognized only if there is a gain
D. are recognized when the sale occurs, regardless of when the cash is collected D
Under the modified accrual basis of accounting, license fees, permits, and other miscellaneous
revenue are generally recognized for practical purposes
A. when cash is received
B. when the exchange takes place
C. over the period during which the government obtains an enforceable legal claim
D. when related expenditures are incurred A
Ideally, under the accrual basis of accounting, license fees, permits, and other miscellaneous
revenue should be recognized
A. when cash is received
B. when the exchange takes place
C. over the period during which the government obtains an enforceable legal claim
