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NFP Exam 2 Questions And Answers |Latest
2025 | Guaranteed Pass.
A city levies property takes of $1,050,000, but believes that it wil not be able to collect $50,000
of those taxes. What entry should it make when the taxes are levied? - Answer✔Debit: PT
Receivable 1,050,000
Credit: Allowance for uncollectible taxes 50,000
Credit: Revenue - PT 1,000,000
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✔Expenditure - utility service
Debit: Expenditure
Credit: Due to
The city council appropriates a portion of the government's current year-end fund balance to
eliminate an anticipated budget deficit in the next year's budget. Projected expenditures are
anticipated to be greater than expected revenues next year.
The appropriated portion of the
current year's fund balance should be reported as - Answer✔Assigned fund balance
True or False (General Fund):
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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. - Answer✔True
True or False (General Fund):
Supplies must be accounted for asexpenditures when purchased. Therefore inventories are not
shown on the balance sheet. - Answer✔False
True or False (General Fund):
Supplies must be initially recorded as assets, and then charged off as expenditures as the
supplies are consumed. - Answer✔False
True or False (General Fund):
Supplies may be accounted for as expenditures either when purchased or when consumed. fI
the purchases method is used, inventories are not shown on the balance sheet. - Answer✔False
What is the purpose of the Debt Service Fund? - Answer✔To account for resources that are
restricted or otherwise limited to pay principal and
interest on general long-term debt
A city keeps its books on a calendar year basis. On April 1, 2013, the city sold $500,000 of 6%
general obligation bonds, payable in semi-annual installments. The first installment, due
October 31, 2013 covered interest of $15,000 and principal of $25,000. For the year ended
December 31, 2013, how much should the Debt Service Fund report as expenditures? -
Answer✔$40,000
2|P a g e
NFP Exam 2 Questions And Answers |Latest
2025 | Guaranteed Pass.
A city levies property takes of $1,050,000, but believes that it wil not be able to collect $50,000
of those taxes. What entry should it make when the taxes are levied? - Answer✔Debit: PT
Receivable 1,050,000
Credit: Allowance for uncollectible taxes 50,000
Credit: Revenue - PT 1,000,000
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✔Expenditure - utility service
Debit: Expenditure
Credit: Due to
The city council appropriates a portion of the government's current year-end fund balance to
eliminate an anticipated budget deficit in the next year's budget. Projected expenditures are
anticipated to be greater than expected revenues next year.
The appropriated portion of the
current year's fund balance should be reported as - Answer✔Assigned fund balance
True or False (General Fund):
1|P a g e
, ©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 11:22 AM A+
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. - Answer✔True
True or False (General Fund):
Supplies must be accounted for asexpenditures when purchased. Therefore inventories are not
shown on the balance sheet. - Answer✔False
True or False (General Fund):
Supplies must be initially recorded as assets, and then charged off as expenditures as the
supplies are consumed. - Answer✔False
True or False (General Fund):
Supplies may be accounted for as expenditures either when purchased or when consumed. fI
the purchases method is used, inventories are not shown on the balance sheet. - Answer✔False
What is the purpose of the Debt Service Fund? - Answer✔To account for resources that are
restricted or otherwise limited to pay principal and
interest on general long-term debt
A city keeps its books on a calendar year basis. On April 1, 2013, the city sold $500,000 of 6%
general obligation bonds, payable in semi-annual installments. The first installment, due
October 31, 2013 covered interest of $15,000 and principal of $25,000. For the year ended
December 31, 2013, how much should the Debt Service Fund report as expenditures? -
Answer✔$40,000
2|P a g e
