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ACCT 4421 Exam 3 ACTUAL EXAM ALL NEWEST 250
QUESTIONS and CORRECT ANSWERS LATEST
UPDATE THIS YEAR
QUESTION: The appropriate measurement focus for the business-type activities of the
Raymond City is
A. Current financial resources
B. Economic resources
C. Both (a) and (b)
D. None of the above - ANSWER-B
QUESTION: Which of the following is not a proprietary fund?
A. City Water Enterprise Fund
B. City Motor Pool Internal Service Fund
C. City Hall Capital Projects Fund
D. None of the above. They are all proprietary funds - ANSWER-C
1 ALL THE BEST CHAMP!!
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QUESTION: The appropriate basis of accounting for the proprietary funds of a government is
A. Cash basis
B. Modified accrual
C. Full accrual
D. None of the above - ANSWER-C
QUESTION: Which of the following is a valid reason for governments to engage in business-type
activities?
A. The government does not want control over the activity
B. The activity competes with general government activities
C. The government does not want to subsidize the activity
D. The government can provide the services more cheaply or efficiently than can a private firm -
ANSWER-D
QUESTION: Which of the following is a valid argument for separate accounting principles for
proprietary activities?
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A. Two separate measurement focuses and bases for accounting within the same set of
financial statements are confusing
B. There are no clear-cut distinctions between business and non-business activities
C. The measurement focus on all economic resources is more consistent with the GASB's
objectives that financial reporting should provide information to help determine whether
current-year revenues were sufficient to pay for current-year services
D. Surveys of statement users indicate that information on depreciation is not of high priority to
government decision makers - ANSWER-C
QUESTION: Which of the following is a key reason for using business-type accounting to
account for proprietary fund activities?
A. The modified accrual basis of accounting captures all the resources and obligations
associated with an activity
B. Depreciation is not recognized in business-type accounting in governments and surveys of
statement users indicate that information on depreciation is not of high priority to government
decision makers
C. The measurement focus on all economic resources is more consistent with the GASB's
objectives that financial reporting should provide information to help determine whether
current-year revenues were sufficient to pay for current-year services
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D. Business-type accounting facilitates comparisons with governmental activities - ANSWER-C
QUESTION: Which of the following is NOT a budget typically prepared for an activity accounted
for in a proprietary fund?
A. Appropriation budget
B. Cash budget
C. Capital budget
D. Flexible budget - ANSWER-A
QUESTION: A government reports the utility services it provides to citizens in a proprietary
fund. Which accounting standards must the proprietary fund apply?
A. All FASB pronouncements, unless a FASB pronouncement conflicts with or contradicts a
GASB pronouncement
B. All FASB pronouncements issued prior to November 30, 1989, as well as any post-November
30, 1989 pronouncements specifically adopted by GASB
C. All GASB pronouncements
1 ALL THE BEST CHAMP!!
ACCT 4421 Exam 3 ACTUAL EXAM ALL NEWEST 250
QUESTIONS and CORRECT ANSWERS LATEST
UPDATE THIS YEAR
QUESTION: The appropriate measurement focus for the business-type activities of the
Raymond City is
A. Current financial resources
B. Economic resources
C. Both (a) and (b)
D. None of the above - ANSWER-B
QUESTION: Which of the following is not a proprietary fund?
A. City Water Enterprise Fund
B. City Motor Pool Internal Service Fund
C. City Hall Capital Projects Fund
D. None of the above. They are all proprietary funds - ANSWER-C
1 ALL THE BEST CHAMP!!
, Page 2 of 110
QUESTION: The appropriate basis of accounting for the proprietary funds of a government is
A. Cash basis
B. Modified accrual
C. Full accrual
D. None of the above - ANSWER-C
QUESTION: Which of the following is a valid reason for governments to engage in business-type
activities?
A. The government does not want control over the activity
B. The activity competes with general government activities
C. The government does not want to subsidize the activity
D. The government can provide the services more cheaply or efficiently than can a private firm -
ANSWER-D
QUESTION: Which of the following is a valid argument for separate accounting principles for
proprietary activities?
1 ALL THE BEST CHAMP!!
, Page 3 of 110
A. Two separate measurement focuses and bases for accounting within the same set of
financial statements are confusing
B. There are no clear-cut distinctions between business and non-business activities
C. The measurement focus on all economic resources is more consistent with the GASB's
objectives that financial reporting should provide information to help determine whether
current-year revenues were sufficient to pay for current-year services
D. Surveys of statement users indicate that information on depreciation is not of high priority to
government decision makers - ANSWER-C
QUESTION: Which of the following is a key reason for using business-type accounting to
account for proprietary fund activities?
A. The modified accrual basis of accounting captures all the resources and obligations
associated with an activity
B. Depreciation is not recognized in business-type accounting in governments and surveys of
statement users indicate that information on depreciation is not of high priority to government
decision makers
C. The measurement focus on all economic resources is more consistent with the GASB's
objectives that financial reporting should provide information to help determine whether
current-year revenues were sufficient to pay for current-year services
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D. Business-type accounting facilitates comparisons with governmental activities - ANSWER-C
QUESTION: Which of the following is NOT a budget typically prepared for an activity accounted
for in a proprietary fund?
A. Appropriation budget
B. Cash budget
C. Capital budget
D. Flexible budget - ANSWER-A
QUESTION: A government reports the utility services it provides to citizens in a proprietary
fund. Which accounting standards must the proprietary fund apply?
A. All FASB pronouncements, unless a FASB pronouncement conflicts with or contradicts a
GASB pronouncement
B. All FASB pronouncements issued prior to November 30, 1989, as well as any post-November
30, 1989 pronouncements specifically adopted by GASB
C. All GASB pronouncements
1 ALL THE BEST CHAMP!!
