ACCT 4421- CH 4 Questions with Complete
Solutions
government-mandated nonexchange transactions These occur when a government at one
level provides resources to a government at another level and requires that recipient to use the
resources for a specific purpose. (The DARE program in public schools)
voluntary nonexchange transactions These result from legislative or contractual
agreements entered into willingly by two or more parties. They include grants given by one
government to another and contributions from individuals. (gifts to public universities)
time requirements These specify the period during which resources must be used or when
use may begin.
purpose restrictions These specify the purpose for which the resources must be used.
lien The right to seize or sell property due to bad debt on property. Most jurisdictions
experience a low rate.
, pass-through grants Grants that a government must transfer to, or spend on behalf of, a
secondary recipient. Vary in the extent of responsibility they impose on the primary recipient.
on-behalf payments One government makes payment for employment fringe benefits 'on
behalf' of another.
Under the modified accrual basis of accounting, revenues cannot be recognized Until
they are measurable and available
"Available" (as in "measurable and available") means Available to finance expenditures
of the current period
Property taxes are an example of An imposed nonexchange transaction
To be considered "Available" property taxes must have been collected either during the
government's fiscal year or within 60 days of year end
For its fiscal year ending September 30, 2011, Twin City levied $500 million in property taxes. It
collected taxes applicable to fiscal 2011 as follows (in millions):
June 1 2010, through September 30, 2010 $20
Solutions
government-mandated nonexchange transactions These occur when a government at one
level provides resources to a government at another level and requires that recipient to use the
resources for a specific purpose. (The DARE program in public schools)
voluntary nonexchange transactions These result from legislative or contractual
agreements entered into willingly by two or more parties. They include grants given by one
government to another and contributions from individuals. (gifts to public universities)
time requirements These specify the period during which resources must be used or when
use may begin.
purpose restrictions These specify the purpose for which the resources must be used.
lien The right to seize or sell property due to bad debt on property. Most jurisdictions
experience a low rate.
, pass-through grants Grants that a government must transfer to, or spend on behalf of, a
secondary recipient. Vary in the extent of responsibility they impose on the primary recipient.
on-behalf payments One government makes payment for employment fringe benefits 'on
behalf' of another.
Under the modified accrual basis of accounting, revenues cannot be recognized Until
they are measurable and available
"Available" (as in "measurable and available") means Available to finance expenditures
of the current period
Property taxes are an example of An imposed nonexchange transaction
To be considered "Available" property taxes must have been collected either during the
government's fiscal year or within 60 days of year end
For its fiscal year ending September 30, 2011, Twin City levied $500 million in property taxes. It
collected taxes applicable to fiscal 2011 as follows (in millions):
June 1 2010, through September 30, 2010 $20
