Government & NFP Accounting Chapter 2
Exam Review UPDATED ACTUAL Exam
Questions and CORRECT Answers
Which of the following is not a characteristic of a fund as defined by GASB Standard?
- an accounting entity
- a fiscal entity
-a reporting entity
- a self- balancing set of accounts - CORRECT ANSWER - A reporting entity
In accounting for state and local governments the modified accrual basis is required for -
CORRECT ANSWER - Governmental Funds
Under the modified accrual basis of accounting, revenues should be recognized when -
CORRECT ANSWER - measurable and available
The accrual basis of accounting applicable to proprietary fund types requires that exchange
revenues be recognized when - CORRECT ANSWER - earned
Which of the following funds is a governmental fund-type?
-private purpose trust fund
-internal service fund
-permanent fund
-enterprise fund - CORRECT ANSWER - Permanent Fund
Financial Resources set aside to pay principal and interest on general long term debt may be
accounted for in which of the following fund types
- private purpose trust fund
- debt service fund
, - principal and interest trust fund
- internal service fund - CORRECT ANSWER - Debt service fund
According to GASB standards transfers should be recognized - CORRECT ANSWER - in
the period the interfund receivable and payable arise
Generally accepted accounting principals applicable to state and local governments require that -
CORRECT ANSWER - only those funds required by law, GASB standards and sound
financial administration should be established
Which of the following is a proprietary fund?
- special revenue fund
- investment trust fund
- debt service fund
- internal service fund - CORRECT ANSWER - Internal Service Fund
Which of the following is a fiduciary fund?
- investment trust fund
- special revenue fund
- debt service fund
- enterprise fund - CORRECT ANSWER - Investment trust fund
Which of the following funds would be most appropriate when accounting for an activity that
provides goods or services to the public for a fee that is intended to make the activity self-
supporting?
- investment trust fund
- enterprise fund
- internal service fund
- special revenue fund - CORRECT ANSWER - Enterprise Fund
Exam Review UPDATED ACTUAL Exam
Questions and CORRECT Answers
Which of the following is not a characteristic of a fund as defined by GASB Standard?
- an accounting entity
- a fiscal entity
-a reporting entity
- a self- balancing set of accounts - CORRECT ANSWER - A reporting entity
In accounting for state and local governments the modified accrual basis is required for -
CORRECT ANSWER - Governmental Funds
Under the modified accrual basis of accounting, revenues should be recognized when -
CORRECT ANSWER - measurable and available
The accrual basis of accounting applicable to proprietary fund types requires that exchange
revenues be recognized when - CORRECT ANSWER - earned
Which of the following funds is a governmental fund-type?
-private purpose trust fund
-internal service fund
-permanent fund
-enterprise fund - CORRECT ANSWER - Permanent Fund
Financial Resources set aside to pay principal and interest on general long term debt may be
accounted for in which of the following fund types
- private purpose trust fund
- debt service fund
, - principal and interest trust fund
- internal service fund - CORRECT ANSWER - Debt service fund
According to GASB standards transfers should be recognized - CORRECT ANSWER - in
the period the interfund receivable and payable arise
Generally accepted accounting principals applicable to state and local governments require that -
CORRECT ANSWER - only those funds required by law, GASB standards and sound
financial administration should be established
Which of the following is a proprietary fund?
- special revenue fund
- investment trust fund
- debt service fund
- internal service fund - CORRECT ANSWER - Internal Service Fund
Which of the following is a fiduciary fund?
- investment trust fund
- special revenue fund
- debt service fund
- enterprise fund - CORRECT ANSWER - Investment trust fund
Which of the following funds would be most appropriate when accounting for an activity that
provides goods or services to the public for a fee that is intended to make the activity self-
supporting?
- investment trust fund
- enterprise fund
- internal service fund
- special revenue fund - CORRECT ANSWER - Enterprise Fund
