Accounting for NFP/Government Exam 2 -
Chapter 3 UPDATED ACTUAL Exam
Questions and CORRECT Answers
Which of the following best describes the recommended format for the government-wide
statement of activities? - CORRECT ANSWER - Expenses - Program revenues = Net
(expense) revenue
Net (expense) revenue + general revenues = change in net position
Which of the following is an acceptable method of reporting depreciation expense for
depreciable assets used by governmental activities? - CORRECT ANSWER - Either report
as a direct expense of the function or program with which the related depreciable assets are
identified or report as an indirect expense on a separate line if the depreciable assets benefit all
functions or programs.
Which of the following accounts neither increases nor decreases the fund balance of the General
Fund during the fiscal year? - CORRECT ANSWER - encumbrances
When determining taxable property for the purpose of the property tax levy, which of the
following would likely be excluded from the calculation? - CORRECT ANSWER -
property owned by governments, property used by religious or charitable organizations, and
property exempted from taxation by the government
Which of the following statements is true for other financing uses but is not true for
expenditures? - CORRECT ANSWER - arise from interfund transfers out
According to GASB standards, expenditures are classified by - CORRECT ANSWER -
fund, function/program, organization unit, activity, character and object
, Under GASB requirements for external financial reporting, the budgetary comparison schedule
(or statement) would be found as a part of - CORRECT ANSWER - Either required
supplementary information OR basic financial statements, as elected by the government
Before placing a purchase order, a department should check that available appropriations are
sufficient to cover the cost of the item being ordered. This type of budgetary control is achieved
by reviewing: - CORRECT ANSWER - appropriations - (expenditures + outstanding
encumbrances)
Which of the following is correct concerning the presentation of the budgetary comparison
schedule? - CORRECT ANSWER - the actual column is required to be presented using the
government's budgetary basis of accounting
Which of the following best identifies when an encumbrance is recorded? - CORRECT
ANSWER - when goods or services are ordered
Supplies ordered by the Public Works function of the General Fund were received at an actual
price that was less than the estimated price listed on the purchase order. What effect will this
have on Public Work's appropriations available balance? - CORRECT ANSWER -
increase
Indicate whether the following revenues should be classified as program revenues, or general
revenues on the government-wide statement of activities
1. operating grants that can be used at the discretion of the city council - CORRECT
ANSWER - general
Indicate whether the following revenues should be classified as program revenues, or general
revenues on the government-wide statement of activities
2. federal grants restricted for highway construction - CORRECT ANSWER - program
Chapter 3 UPDATED ACTUAL Exam
Questions and CORRECT Answers
Which of the following best describes the recommended format for the government-wide
statement of activities? - CORRECT ANSWER - Expenses - Program revenues = Net
(expense) revenue
Net (expense) revenue + general revenues = change in net position
Which of the following is an acceptable method of reporting depreciation expense for
depreciable assets used by governmental activities? - CORRECT ANSWER - Either report
as a direct expense of the function or program with which the related depreciable assets are
identified or report as an indirect expense on a separate line if the depreciable assets benefit all
functions or programs.
Which of the following accounts neither increases nor decreases the fund balance of the General
Fund during the fiscal year? - CORRECT ANSWER - encumbrances
When determining taxable property for the purpose of the property tax levy, which of the
following would likely be excluded from the calculation? - CORRECT ANSWER -
property owned by governments, property used by religious or charitable organizations, and
property exempted from taxation by the government
Which of the following statements is true for other financing uses but is not true for
expenditures? - CORRECT ANSWER - arise from interfund transfers out
According to GASB standards, expenditures are classified by - CORRECT ANSWER -
fund, function/program, organization unit, activity, character and object
, Under GASB requirements for external financial reporting, the budgetary comparison schedule
(or statement) would be found as a part of - CORRECT ANSWER - Either required
supplementary information OR basic financial statements, as elected by the government
Before placing a purchase order, a department should check that available appropriations are
sufficient to cover the cost of the item being ordered. This type of budgetary control is achieved
by reviewing: - CORRECT ANSWER - appropriations - (expenditures + outstanding
encumbrances)
Which of the following is correct concerning the presentation of the budgetary comparison
schedule? - CORRECT ANSWER - the actual column is required to be presented using the
government's budgetary basis of accounting
Which of the following best identifies when an encumbrance is recorded? - CORRECT
ANSWER - when goods or services are ordered
Supplies ordered by the Public Works function of the General Fund were received at an actual
price that was less than the estimated price listed on the purchase order. What effect will this
have on Public Work's appropriations available balance? - CORRECT ANSWER -
increase
Indicate whether the following revenues should be classified as program revenues, or general
revenues on the government-wide statement of activities
1. operating grants that can be used at the discretion of the city council - CORRECT
ANSWER - general
Indicate whether the following revenues should be classified as program revenues, or general
revenues on the government-wide statement of activities
2. federal grants restricted for highway construction - CORRECT ANSWER - program
