©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 11:22 AM A+
Not for profit Exam #2 Questions And
Answers |Latest 2025 | Guaranteed Pass.
Unmatured long-term debt arising from the issuance of general obligation bonds is not
reported in governmental-type funds, but noncurrent liabilities associated with compensated
absences or claims and judgments are reported in governmental-type funds. - Answer✔False
A state provides a city with a grant of $500,000 for a special "meals for the homeless" program.
The city will receive payment from the state within 30 days of incurring eligible expenditures for
the program. The city's policy is to consider "available" any amounts collected no more than 60
days into its next fiscal year. When should the city recognize revenues under this grant? -
Answer✔When it incurs expenditures under the grant
On January 1, 2019, a city recorded General Fund property tax revenues of $750,000 but made
no provision for uncollectible receivables or tax refunds. During the year, it collected property
taxes of $720,000, wrote off $4,000 as uncollectible, and made tax refunds of $3,000. At year-
end, the city finance director concluded that $10,000 of the delinquent taxes would be
collected in January and February of 2020, $12,000 would be collected later in 2020, and $1,000
would need to be written off as uncollectible. How much should the city report as property tax
revenue in its General Fund financial statements for the year 2019? - Answer✔$730,000
Deferred inflows are a government's: - Answer✔Acquisition of net assets that are applicable to
a future reporting period
Which of the following describes the proper accounting procedure for supplies in the General
Fund? - Answer✔Supplies may be accounted for as expenditures either when purchased or
when consumed. In either case, material amounts of inventory are shown on the balance sheet
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, ©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 11:22 AM A+
A school district receives a grant from the federal government to reimburse the district for the
salaries of teachers in an "English as a Second Language" program. The grant has no time
requirements. The school district has paid the teachers and expects to receive payment from
the federal government within 30 days of its year-end. The school district considers amounts
received within 60 days of its year-end as available. Which of the following journal entries
would be needed for the school district's Special Revenue Fund? - Answer✔Debit Due from
federal government and credit Intergovernmental revenues—grants
The complete governmental fund equation is: - Answer✔Financial Assets + Deferred Outflows
of Resources =
Near-term liabilits + Deferred Inflows of Resources + Fund Balance
Which of the following interfund transactions will be reported in the Other financing sources
(uses) section of the operating statement of a General Fund? - Answer✔Transfer out to a Debt
Service Fund
A General Fund receives an invoice from the Electric Utility Fund (an Enterprise Fund) for
electricity provided by the Utility Fund. When it receives the invoice, what account should be
debited in the General Fund? - Answer✔Expenditures - utility services
A property owner receives a property tax bill for $4,000 and appeals the assessment. Before he
pays the bill, the city reduces his property tax to $3,000. If the city had previously established
an allowance for property tax refunds, what entry should it make to record the reduction in its
General Fund? - Answer✔Allowance for refunds and uncollectible taxes 1,000
Property taxes receivable 1,000
Under the consumption method of accounting for inventories, a debit is made to Supplies
inventory and a credit is made to Nonspendable fund balance if year-end inventory is greater
than the beginning of the year inventory in governmental-type funds. - Answer✔False
A government levies property taxes for general government activities of $8,000,000 for the
current year and it expects to not be able to collect $80,000 of the property taxes. The
government should credit Revenues—property taxes for $800,000 - Answer✔False
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, ©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 11:22 AM A+
An interfund reimbursement occurs when a fund provides cash to another fund with equivalent
flows of assets in return and without a requirement of repayment - Answer✔False
The City of Mayville had total fund balance in its General Fund of $200,000 on December 31,
2019. The City of Maysville's General Fund balance sheet for its December 31, 2019 year end
shows inventory of $28,000 and prepaid rent of $10,000. The City also had $60,000 of
outstanding encumbrances in its General Fund at year-end. In December 2019, a grantor
provided the City with $42,000 that must be used to buy musical instruments for the City's
youth orchestra. No instruments had been purchased at year-end. How much should the City
report as unassigned fund balance in its General Fund on December 31, 2019? -
Answer✔$60,000
During its 2019 fiscal year, a city receives a grant from the state to hire a police officer who is to
educate young people about the dangers of using illegal drugs. The grant is for $60,000. The
only requirement is that the city hire the police officer. The city hires the police officer and will
receive the grant proceeds from the state during its 2019 fiscal year and the proceeds are
considered available at the time of hire. How should the city report the grant in its Special
Revenue Fund when it hires the police officer? - Answer✔Due from state government $60,000
Intergovernmental revenues - grants $60,000
The city council decides to close the Library Special Revenue fund and send its remaining
resources ($45,000 cash) to the General Fund. What journal entry should the Library Special
Revenue Fund make? - Answer✔Transfer out to General Fund
45,000
Cash 45,000
On January 1, 2019, a city recorded General Fund property tax revenues of $750,000 but made
no provision for uncollectible receivables or tax refunds. During the year, it collected property
taxes of $720,000, wrote off $4,000 as uncollectible, and made tax refunds of $3,000. At year-
end, the city finance director concluded that $10,000 of the delinquent taxes would be
collected in January and February of 2020, $12,000 would be collected later in 2020, and $1,000
would need to be written off as uncollectible. How much should the city report as Deferred
3|P a g e
Not for profit Exam #2 Questions And
Answers |Latest 2025 | Guaranteed Pass.
Unmatured long-term debt arising from the issuance of general obligation bonds is not
reported in governmental-type funds, but noncurrent liabilities associated with compensated
absences or claims and judgments are reported in governmental-type funds. - Answer✔False
A state provides a city with a grant of $500,000 for a special "meals for the homeless" program.
The city will receive payment from the state within 30 days of incurring eligible expenditures for
the program. The city's policy is to consider "available" any amounts collected no more than 60
days into its next fiscal year. When should the city recognize revenues under this grant? -
Answer✔When it incurs expenditures under the grant
On January 1, 2019, a city recorded General Fund property tax revenues of $750,000 but made
no provision for uncollectible receivables or tax refunds. During the year, it collected property
taxes of $720,000, wrote off $4,000 as uncollectible, and made tax refunds of $3,000. At year-
end, the city finance director concluded that $10,000 of the delinquent taxes would be
collected in January and February of 2020, $12,000 would be collected later in 2020, and $1,000
would need to be written off as uncollectible. How much should the city report as property tax
revenue in its General Fund financial statements for the year 2019? - Answer✔$730,000
Deferred inflows are a government's: - Answer✔Acquisition of net assets that are applicable to
a future reporting period
Which of the following describes the proper accounting procedure for supplies in the General
Fund? - Answer✔Supplies may be accounted for as expenditures either when purchased or
when consumed. In either case, material amounts of inventory are shown on the balance sheet
1|P a g e
, ©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 11:22 AM A+
A school district receives a grant from the federal government to reimburse the district for the
salaries of teachers in an "English as a Second Language" program. The grant has no time
requirements. The school district has paid the teachers and expects to receive payment from
the federal government within 30 days of its year-end. The school district considers amounts
received within 60 days of its year-end as available. Which of the following journal entries
would be needed for the school district's Special Revenue Fund? - Answer✔Debit Due from
federal government and credit Intergovernmental revenues—grants
The complete governmental fund equation is: - Answer✔Financial Assets + Deferred Outflows
of Resources =
Near-term liabilits + Deferred Inflows of Resources + Fund Balance
Which of the following interfund transactions will be reported in the Other financing sources
(uses) section of the operating statement of a General Fund? - Answer✔Transfer out to a Debt
Service Fund
A General Fund receives an invoice from the Electric Utility Fund (an Enterprise Fund) for
electricity provided by the Utility Fund. When it receives the invoice, what account should be
debited in the General Fund? - Answer✔Expenditures - utility services
A property owner receives a property tax bill for $4,000 and appeals the assessment. Before he
pays the bill, the city reduces his property tax to $3,000. If the city had previously established
an allowance for property tax refunds, what entry should it make to record the reduction in its
General Fund? - Answer✔Allowance for refunds and uncollectible taxes 1,000
Property taxes receivable 1,000
Under the consumption method of accounting for inventories, a debit is made to Supplies
inventory and a credit is made to Nonspendable fund balance if year-end inventory is greater
than the beginning of the year inventory in governmental-type funds. - Answer✔False
A government levies property taxes for general government activities of $8,000,000 for the
current year and it expects to not be able to collect $80,000 of the property taxes. The
government should credit Revenues—property taxes for $800,000 - Answer✔False
2|P a g e
, ©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 11:22 AM A+
An interfund reimbursement occurs when a fund provides cash to another fund with equivalent
flows of assets in return and without a requirement of repayment - Answer✔False
The City of Mayville had total fund balance in its General Fund of $200,000 on December 31,
2019. The City of Maysville's General Fund balance sheet for its December 31, 2019 year end
shows inventory of $28,000 and prepaid rent of $10,000. The City also had $60,000 of
outstanding encumbrances in its General Fund at year-end. In December 2019, a grantor
provided the City with $42,000 that must be used to buy musical instruments for the City's
youth orchestra. No instruments had been purchased at year-end. How much should the City
report as unassigned fund balance in its General Fund on December 31, 2019? -
Answer✔$60,000
During its 2019 fiscal year, a city receives a grant from the state to hire a police officer who is to
educate young people about the dangers of using illegal drugs. The grant is for $60,000. The
only requirement is that the city hire the police officer. The city hires the police officer and will
receive the grant proceeds from the state during its 2019 fiscal year and the proceeds are
considered available at the time of hire. How should the city report the grant in its Special
Revenue Fund when it hires the police officer? - Answer✔Due from state government $60,000
Intergovernmental revenues - grants $60,000
The city council decides to close the Library Special Revenue fund and send its remaining
resources ($45,000 cash) to the General Fund. What journal entry should the Library Special
Revenue Fund make? - Answer✔Transfer out to General Fund
45,000
Cash 45,000
On January 1, 2019, a city recorded General Fund property tax revenues of $750,000 but made
no provision for uncollectible receivables or tax refunds. During the year, it collected property
taxes of $720,000, wrote off $4,000 as uncollectible, and made tax refunds of $3,000. At year-
end, the city finance director concluded that $10,000 of the delinquent taxes would be
collected in January and February of 2020, $12,000 would be collected later in 2020, and $1,000
would need to be written off as uncollectible. How much should the city report as Deferred
3|P a g e
