GOV & NFP - EXAM II - Ch 10 Questions
and Answers 100% Correct
2. In previous years, Center City had received a $400,000 gift of cash and investments. The
donor had specified that the earnings from the gift must be used to beautify city-owned parks and
the principal must be re-invested. During the current year, the earnings from this gift were
$24,000. The earnings from this gift should generally be considered revenue to which of the
following funds?
a) Special revenue fund.
b) Private-purpose trust fund.
c) Agency fund.
d) Permanent fund. D
The City received $200,000 to help maintain a local art museum that is owned and operated by a
not-for-profit organization. During the year the City transferred net earnings of $20,000 to the
appropriate entity/fund.
4. The $20,000 transfer would be reported by the fund that made the transfer as a (an)
a) Transfer out.
b) Expenditure.
,c) Deduction from Net Assets—Benefits.
d) Expense. C
The City received $200,000 to help maintain a local art museum that is owned and operated by a
not-for-profit organization. During the year the City transferred net earnings of $20,000 to the
appropriate entity/fund.
3. The $200,000 gift would be reported in a (an):
a) Special revenue fund.
b) Private-purpose trust fund.
c) Agency fund.
d) Permanent fund. B
In the current year, the City of Katerah earned $24,000 on the principal of a private-purpose trust
fund but disbursed only $20,000.
5. During the current year the private-purpose trust fund will recognize, related to earnings:
, a) $24,000 revenues.
b) $20,000 revenues.
c) $24,000 addition to net assets.
d) $20,000 addition to net assets. C
In the current year, the City of Katerah earned $24,000 on the principal of a private-purpose trust
fund but disbursed only $20,000.
6. During the current year the private-purpose trust fund will recognize, related to the cash
outflow:
a) $20,000 transfer out.
b) $20,000 expenses.
c) $24,000 deduction from net assets.
d) $20,000 deduction from net assets. D
7. Which of the following activities of a governmental entity should be accounted for in a
fiduciary fund?
a) Funds received from the federal government to support public transportation activities.
and Answers 100% Correct
2. In previous years, Center City had received a $400,000 gift of cash and investments. The
donor had specified that the earnings from the gift must be used to beautify city-owned parks and
the principal must be re-invested. During the current year, the earnings from this gift were
$24,000. The earnings from this gift should generally be considered revenue to which of the
following funds?
a) Special revenue fund.
b) Private-purpose trust fund.
c) Agency fund.
d) Permanent fund. D
The City received $200,000 to help maintain a local art museum that is owned and operated by a
not-for-profit organization. During the year the City transferred net earnings of $20,000 to the
appropriate entity/fund.
4. The $20,000 transfer would be reported by the fund that made the transfer as a (an)
a) Transfer out.
b) Expenditure.
,c) Deduction from Net Assets—Benefits.
d) Expense. C
The City received $200,000 to help maintain a local art museum that is owned and operated by a
not-for-profit organization. During the year the City transferred net earnings of $20,000 to the
appropriate entity/fund.
3. The $200,000 gift would be reported in a (an):
a) Special revenue fund.
b) Private-purpose trust fund.
c) Agency fund.
d) Permanent fund. B
In the current year, the City of Katerah earned $24,000 on the principal of a private-purpose trust
fund but disbursed only $20,000.
5. During the current year the private-purpose trust fund will recognize, related to earnings:
, a) $24,000 revenues.
b) $20,000 revenues.
c) $24,000 addition to net assets.
d) $20,000 addition to net assets. C
In the current year, the City of Katerah earned $24,000 on the principal of a private-purpose trust
fund but disbursed only $20,000.
6. During the current year the private-purpose trust fund will recognize, related to the cash
outflow:
a) $20,000 transfer out.
b) $20,000 expenses.
c) $24,000 deduction from net assets.
d) $20,000 deduction from net assets. D
7. Which of the following activities of a governmental entity should be accounted for in a
fiduciary fund?
a) Funds received from the federal government to support public transportation activities.
