Governmental Accounting Test 2 with
complete solutions graded A+ passed
A concerned citizen provides resources and establishes a trust with the local
government. What factors should be considered in determining which fund to
report the activities? - correct answer ✔✔It is important to determine: (1)
Whether the trust benefits the government or its citizenry or (2) Alternatively
whether the trust benefits individuals, private organizations or other
governments.
The trust benefits individuals, private organizations other governments: - correct
answer ✔✔It should be reported in the private-purpose trust fund, a fiduciary
type fund.
The trust benefits the government or its citizenry: - correct answer ✔✔It is
important to determine whether the trust principal must be maintained or
alternatively, if it can be expended for purposes supported by the trust. If the trust
principal must be maintained, the trust should be reported in a permanent fund.
If there is no requirement to maintain the principal, it should be reported in a
special revenue fund.
What accounting problem arises if an internal service fund is operated at a
significant profit? - correct answer ✔✔The expenditures reported in the general
fund exceed the true cost of operating the government.
complete solutions graded A+ passed
A concerned citizen provides resources and establishes a trust with the local
government. What factors should be considered in determining which fund to
report the activities? - correct answer ✔✔It is important to determine: (1)
Whether the trust benefits the government or its citizenry or (2) Alternatively
whether the trust benefits individuals, private organizations or other
governments.
The trust benefits individuals, private organizations other governments: - correct
answer ✔✔It should be reported in the private-purpose trust fund, a fiduciary
type fund.
The trust benefits the government or its citizenry: - correct answer ✔✔It is
important to determine whether the trust principal must be maintained or
alternatively, if it can be expended for purposes supported by the trust. If the trust
principal must be maintained, the trust should be reported in a permanent fund.
If there is no requirement to maintain the principal, it should be reported in a
special revenue fund.
What accounting problem arises if an internal service fund is operated at a
significant profit? - correct answer ✔✔The expenditures reported in the general
fund exceed the true cost of operating the government.
