Governmental and Nonprofit
Accounting (PMQC) with
Questions and 100% Correct
Answers
Measurement focus -✔✔Which basis of accounting determines what assets and liabilities will be
given accounting recognition and be reported on the balance sheet?
Basis of accounting
Nonspendable
Measurement focus
Assigned fund balance
Taxes collected by one government for the benefit of another -✔✔Which activity is an example of a
custodial fund?
Healthcare insurance and related forms of remuneration to government retirees and their beneficiaries
Account for gifts the school district receives to be used for a particular purpose
Taxes collected by one government for the benefit of another
Available cash invested into an investment pool to earn a return on assets
It reports only on the balances and flows of current and noncurrent assets and liabilities. -✔✔What
does the economic resources measurement for full accrual basis do?
It reports only on the balances and flow of current assets and liabilities.
It reports only cash or items expected to be converted into cash during the current period.
,It reports only on the balances and flows of current and noncurrent assets and liabilities.
It reports only on governmental activities.
To adhere to restrictions placed on them by various external parties -✔✔Why should governments
separate resources into funds?
To adhere to restrictions placed on them by various external parties
To isolate certain business risks
To account for activities by product or region
To minimize their tax obligations
The actual amounts in the budgetary comparison schedule should be reported using the government's
budgetary basis. -✔✔How should a local government report the budgetary comparison schedule if a
state law requires that local governments prepare general fund and special revenue fund budgets on a
basis that differs from the basis of accounting required by GAAP?
The actual amounts in the budgetary comparison schedule should be reported on the GAAP basis.
Both the budgeted and actual amounts in the budgetary comparison schedule should be reported
on the GAAP basis.
The actual amounts in the budgetary comparison schedule should be reported using the government's
budgetary basis.
Only a budgetary comparison schedule prepared for the appropriate state oversight body is required.
, A credit to Expenditures -✔✔Expenditures for supplies ordered by a special revenue fund were
inadvertently recorded in the accounts of the general fund in the amount of $100.What should the
journal entry for the general fund include, upon reimbursement of the $100, later the same month?
A credit to Expenditures
A credit to Encumbrances
A credit to Interfund Transfers In
A credit to Fund Balance
Appropriation -✔✔What is the first recording step for the general fund?
Disbursement
Encumbrance
Appropriation
Expenditure
When a purchase order is issued -✔✔When should an encumbrance be recorded?
When a purchase order is issued
When an invoice is received
When a sales order is issued
When the general fund transfers money to another fund
Accounting (PMQC) with
Questions and 100% Correct
Answers
Measurement focus -✔✔Which basis of accounting determines what assets and liabilities will be
given accounting recognition and be reported on the balance sheet?
Basis of accounting
Nonspendable
Measurement focus
Assigned fund balance
Taxes collected by one government for the benefit of another -✔✔Which activity is an example of a
custodial fund?
Healthcare insurance and related forms of remuneration to government retirees and their beneficiaries
Account for gifts the school district receives to be used for a particular purpose
Taxes collected by one government for the benefit of another
Available cash invested into an investment pool to earn a return on assets
It reports only on the balances and flows of current and noncurrent assets and liabilities. -✔✔What
does the economic resources measurement for full accrual basis do?
It reports only on the balances and flow of current assets and liabilities.
It reports only cash or items expected to be converted into cash during the current period.
,It reports only on the balances and flows of current and noncurrent assets and liabilities.
It reports only on governmental activities.
To adhere to restrictions placed on them by various external parties -✔✔Why should governments
separate resources into funds?
To adhere to restrictions placed on them by various external parties
To isolate certain business risks
To account for activities by product or region
To minimize their tax obligations
The actual amounts in the budgetary comparison schedule should be reported using the government's
budgetary basis. -✔✔How should a local government report the budgetary comparison schedule if a
state law requires that local governments prepare general fund and special revenue fund budgets on a
basis that differs from the basis of accounting required by GAAP?
The actual amounts in the budgetary comparison schedule should be reported on the GAAP basis.
Both the budgeted and actual amounts in the budgetary comparison schedule should be reported
on the GAAP basis.
The actual amounts in the budgetary comparison schedule should be reported using the government's
budgetary basis.
Only a budgetary comparison schedule prepared for the appropriate state oversight body is required.
, A credit to Expenditures -✔✔Expenditures for supplies ordered by a special revenue fund were
inadvertently recorded in the accounts of the general fund in the amount of $100.What should the
journal entry for the general fund include, upon reimbursement of the $100, later the same month?
A credit to Expenditures
A credit to Encumbrances
A credit to Interfund Transfers In
A credit to Fund Balance
Appropriation -✔✔What is the first recording step for the general fund?
Disbursement
Encumbrance
Appropriation
Expenditure
When a purchase order is issued -✔✔When should an encumbrance be recorded?
When a purchase order is issued
When an invoice is received
When a sales order is issued
When the general fund transfers money to another fund
