Governmental Accounting Chapters 1-4
MCQs questions & actual answers.
The body with primary accounting standards-setting authority for state and local governments is the...
ANS -Governmental Accounting Standards Board
The body with primary accounting standards-setting authority for colleges and universities is the... ANS -
Governmental Accountings Standards Board for governmental colleges and universities and the
Financial Accounting Standards Board for all other colleges and universities
A governmental (expendable) fund accounting entity... ANS -includes financial assets and related
liabilities
Legally adopted budgets of governmental funds are... ANS -Fixed dollar budgets, which establish
expenditure limits that are not to be exceeded.
A fund... ANS -is an entity for which financial statements is prepared; has a self encompassing, self-
balancing accounting equation; is used to account for a subset of an organization's resources that is to
be used for a specific purpose or to achieve a particular objective
One unique characteristic of most government and nonprofit organizations is that ANS -there is no
direct relationship between the amounts of goods or services that most resource providers receive and
the amount of resources provided by each individual
Organizations that are considered to be nonprofit typically include all of the following: ANS -Churches,
Boy Scouts and Girl Scouts, State CPA societies
Which of the following is a characteristic of governmental fund accounting and financial reporting? ANS
-The inclusion of only financial assets and related liabilities
Financial assets include ANS -Cash, investments, receivables
, All of the following are considered governmental funds except: ANS -An internal service fund is NOT a
governmental fund. That would be a proprietary fund.
However, A special revenue fund, capital projects fund, and permanent fund are all governmental funds.
Each of the following is a fiduciary fund except ANS -A permanent fund is NOT a fiduciary fund.
However, an investment trust fund, agency fund, and private purpose trust fund are all fiduciary funds.
Which of the following definitions best describes the term related liabilities? ANS -Related liabilities
refer primarily to general governmental liabilities that are related to the current year and are normally
paid from available expendable financial assets.
Which of the following transactions would NOT be reported in a county's General Fund? ANS -General
property taxes a county collects on behalf of municipalities located within the county would not be
reported in a county's general fund.
However, The purchase of 10 new public safety vehicles, the annual lease payment for the copiers in the
county courthouse, and the collection of property taxes that are past due from previous years would all
be reported in a county's general fund.
The transactions associated with a Community Development Block Grant that must be used to finance
rehabilitation of privately owned housing in an economically depressed neighborhood of the city
typically would be reported in which of the following funds and/or nonfood accounts? ANS -A special
revenue fund only
The city of Hannah has established a trust to provide resources to offset the costs of maintenance of the
city-owned cemetery. The majority of the resources of this trust will be cemetery plot sales and
donations from families of those buried in the cemetery. The trust corpus is nonexpendable in nature.
Transactions associated with this trust activity would most likely be accounted for in ANS -A permanent
fund
A transaction in which a municipal electric utility paid $150,000 out of its earnings for new equipment
requires accounting recognition in ANS -An Enterprise fund
MCQs questions & actual answers.
The body with primary accounting standards-setting authority for state and local governments is the...
ANS -Governmental Accounting Standards Board
The body with primary accounting standards-setting authority for colleges and universities is the... ANS -
Governmental Accountings Standards Board for governmental colleges and universities and the
Financial Accounting Standards Board for all other colleges and universities
A governmental (expendable) fund accounting entity... ANS -includes financial assets and related
liabilities
Legally adopted budgets of governmental funds are... ANS -Fixed dollar budgets, which establish
expenditure limits that are not to be exceeded.
A fund... ANS -is an entity for which financial statements is prepared; has a self encompassing, self-
balancing accounting equation; is used to account for a subset of an organization's resources that is to
be used for a specific purpose or to achieve a particular objective
One unique characteristic of most government and nonprofit organizations is that ANS -there is no
direct relationship between the amounts of goods or services that most resource providers receive and
the amount of resources provided by each individual
Organizations that are considered to be nonprofit typically include all of the following: ANS -Churches,
Boy Scouts and Girl Scouts, State CPA societies
Which of the following is a characteristic of governmental fund accounting and financial reporting? ANS
-The inclusion of only financial assets and related liabilities
Financial assets include ANS -Cash, investments, receivables
, All of the following are considered governmental funds except: ANS -An internal service fund is NOT a
governmental fund. That would be a proprietary fund.
However, A special revenue fund, capital projects fund, and permanent fund are all governmental funds.
Each of the following is a fiduciary fund except ANS -A permanent fund is NOT a fiduciary fund.
However, an investment trust fund, agency fund, and private purpose trust fund are all fiduciary funds.
Which of the following definitions best describes the term related liabilities? ANS -Related liabilities
refer primarily to general governmental liabilities that are related to the current year and are normally
paid from available expendable financial assets.
Which of the following transactions would NOT be reported in a county's General Fund? ANS -General
property taxes a county collects on behalf of municipalities located within the county would not be
reported in a county's general fund.
However, The purchase of 10 new public safety vehicles, the annual lease payment for the copiers in the
county courthouse, and the collection of property taxes that are past due from previous years would all
be reported in a county's general fund.
The transactions associated with a Community Development Block Grant that must be used to finance
rehabilitation of privately owned housing in an economically depressed neighborhood of the city
typically would be reported in which of the following funds and/or nonfood accounts? ANS -A special
revenue fund only
The city of Hannah has established a trust to provide resources to offset the costs of maintenance of the
city-owned cemetery. The majority of the resources of this trust will be cemetery plot sales and
donations from families of those buried in the cemetery. The trust corpus is nonexpendable in nature.
Transactions associated with this trust activity would most likely be accounted for in ANS -A permanent
fund
A transaction in which a municipal electric utility paid $150,000 out of its earnings for new equipment
requires accounting recognition in ANS -An Enterprise fund
