Chapter 2 The Use of Funds in
Governmental Accounting questions
with actual answers.
primary government, component units ANS -In the book example, NYC is considered the ______ and its
constituent legally separate entities (public authorities or public benefit corporations for which the
primary government is financially accountable) are called _____
funds ANS -For internal accounting purposes, the primary government itself is disaggregated
(subdivided) into separate fiscal and accounting entities, called ____
each fund has its own GL ANS -the definition states that a fund is a fiscal and accounting entity with a
self-balancing set of accounts. this means that....
fund balance, net position ANS -In the absence of owners' equity, the difference between assets and
liabilities is called either _____ or _____, depending on the fund category.
governmental, proprietary, fiduciary ANS -what are the three Governmental fund categories?
appropriations ANS -authorizations created by the legislature that allow spending for specific purposes.
revenue ANS -The ____ side of the budget shows estimates of how much will be raised from each
revenue source
spending ANS -on the ______ side of the budget, budgetary appropriations not only authorize how
much may be spent for each activity or purpose, but also limit how much may be spent.
central government budget manager, departmental budget manager, cash manager ANS -internal
accounting systems must be designed to meet the needs of the:
_____(to help monitor actual results in relation to the budget),
,the ______ (to show how much of the appropriated resources are available for spending), and
the _____ (to help in preparing day-to-day cash forecasts)
the General Fund ANS -When the legislative branch appropriates resources for the day-to-day operating
needs of a government, the appropriations are generally from one fund called.....
governmental ANS -category of funds that are used to account for most of the day-to-day public services
provided by state and local governments.
ex: may include public safety (policing and fire suppression), elementary and secondary education,
health and mental health, sanitation, environmental protection, parks and recreation, transportation,
and so forth
issuing debt ANS -with governmental type funds, capital assets used to provide these services (such as
police stations and office buildings) are often financed by....
appropriations ANS -characteristic of governmental-type funds is that their expenditures are likely to be
controlled by budgets proposed by the executive branch of government and legally adopted by the
legislative branch in the form of ______
proprietary funds ANS -type of fund that is used to account for governmental activities that operate in a
manner similar to that of private-sector businesses in the sense that they charge fees for services and
measure whether their revenues will cover their expenses.
Ex: may include municipal hospitals, electric and water utilities, mass transit facilities, parking facilities,
and lotteries
fiduciary ANS -category of fund that is used to account for resources that governments hold in a trust or
custodial capacity for others. "Others" might be individuals, other governments, or private
organizations.
ex: pension and retiree health care trust funds operated by a government for its own employees and/or
the employees of other governments, investment pools operated by a sponsor-ing government on
, behalf of other governments, and sales taxes collected by a state on behalf of other governments within
that state, such as counties and cities
no (b/c they are held in trust for others) ANS -can resources in fiduciary funds be used to support the
government's own programs?
1. fund statements
2. government-wide statements ANS -GASB Statement No. 34 requires governments to prepare what 2
sets of financial statements?
1. measurement focus and basis of accounting used in the governmental-type fund category is different
from that used in the other two categories
2. info provided by the fund stmts for the gov't-type fund category is incomplete (and can be misleading
with the required second set of statements)
3. Although reporting on each fund serves a purpose, there is also a need for an overview of the finances
of the government as a whole ANS -why are two different sets of financial statements prepared for
governmental entities? (3)
governmental, proprietary, fiduciary ANS -The fund set of financial statements consists of what three
groupings
1. resource inflows and outflows ("operating statements")
2. financial position ("balance sheets"). ANS -for the governmental-type fund category, the statements
report what 2 things?
1. Statement of net position
2. Statement of Revs, Expenses, and Changes in Fund Net Position (operating statements)
3. Statements of Cash Flows ANS -for the proprietary type fund category, what are the financial
statements? (3)
1. Statements of Fiduciary Net Assets (net position)
2. Statement of Changes in Fiduciary Net Assets (net position) ANS -for the fiduciary type fund category,
what are the financial statements? (2)
Governmental Accounting questions
with actual answers.
primary government, component units ANS -In the book example, NYC is considered the ______ and its
constituent legally separate entities (public authorities or public benefit corporations for which the
primary government is financially accountable) are called _____
funds ANS -For internal accounting purposes, the primary government itself is disaggregated
(subdivided) into separate fiscal and accounting entities, called ____
each fund has its own GL ANS -the definition states that a fund is a fiscal and accounting entity with a
self-balancing set of accounts. this means that....
fund balance, net position ANS -In the absence of owners' equity, the difference between assets and
liabilities is called either _____ or _____, depending on the fund category.
governmental, proprietary, fiduciary ANS -what are the three Governmental fund categories?
appropriations ANS -authorizations created by the legislature that allow spending for specific purposes.
revenue ANS -The ____ side of the budget shows estimates of how much will be raised from each
revenue source
spending ANS -on the ______ side of the budget, budgetary appropriations not only authorize how
much may be spent for each activity or purpose, but also limit how much may be spent.
central government budget manager, departmental budget manager, cash manager ANS -internal
accounting systems must be designed to meet the needs of the:
_____(to help monitor actual results in relation to the budget),
,the ______ (to show how much of the appropriated resources are available for spending), and
the _____ (to help in preparing day-to-day cash forecasts)
the General Fund ANS -When the legislative branch appropriates resources for the day-to-day operating
needs of a government, the appropriations are generally from one fund called.....
governmental ANS -category of funds that are used to account for most of the day-to-day public services
provided by state and local governments.
ex: may include public safety (policing and fire suppression), elementary and secondary education,
health and mental health, sanitation, environmental protection, parks and recreation, transportation,
and so forth
issuing debt ANS -with governmental type funds, capital assets used to provide these services (such as
police stations and office buildings) are often financed by....
appropriations ANS -characteristic of governmental-type funds is that their expenditures are likely to be
controlled by budgets proposed by the executive branch of government and legally adopted by the
legislative branch in the form of ______
proprietary funds ANS -type of fund that is used to account for governmental activities that operate in a
manner similar to that of private-sector businesses in the sense that they charge fees for services and
measure whether their revenues will cover their expenses.
Ex: may include municipal hospitals, electric and water utilities, mass transit facilities, parking facilities,
and lotteries
fiduciary ANS -category of fund that is used to account for resources that governments hold in a trust or
custodial capacity for others. "Others" might be individuals, other governments, or private
organizations.
ex: pension and retiree health care trust funds operated by a government for its own employees and/or
the employees of other governments, investment pools operated by a sponsor-ing government on
, behalf of other governments, and sales taxes collected by a state on behalf of other governments within
that state, such as counties and cities
no (b/c they are held in trust for others) ANS -can resources in fiduciary funds be used to support the
government's own programs?
1. fund statements
2. government-wide statements ANS -GASB Statement No. 34 requires governments to prepare what 2
sets of financial statements?
1. measurement focus and basis of accounting used in the governmental-type fund category is different
from that used in the other two categories
2. info provided by the fund stmts for the gov't-type fund category is incomplete (and can be misleading
with the required second set of statements)
3. Although reporting on each fund serves a purpose, there is also a need for an overview of the finances
of the government as a whole ANS -why are two different sets of financial statements prepared for
governmental entities? (3)
governmental, proprietary, fiduciary ANS -The fund set of financial statements consists of what three
groupings
1. resource inflows and outflows ("operating statements")
2. financial position ("balance sheets"). ANS -for the governmental-type fund category, the statements
report what 2 things?
1. Statement of net position
2. Statement of Revs, Expenses, and Changes in Fund Net Position (operating statements)
3. Statements of Cash Flows ANS -for the proprietary type fund category, what are the financial
statements? (3)
1. Statements of Fiduciary Net Assets (net position)
2. Statement of Changes in Fiduciary Net Assets (net position) ANS -for the fiduciary type fund category,
what are the financial statements? (2)
