ACC 430 - Exam 3 Test Questions with
All Correct Answers.
Accrual - Answer Which basis of accounting is required for a city's government-wide financial
statements?
$5,000 - Answer Elm City issued a purchase order for supplies with an estimated cost of
$5,000. When the supplies were received, the accompanying invoice indicated an actual price of
$4,950. What amount should Elm debit (credit) to Budgetary Fund Balance - Reserved for
Encumbrances after the supplies and invoice were received?
Non-operating revenues - Answer How should state appropriations to a state university
choosing to report as engaged only in business-type activities be reported in its statement of
revenues, expenses, and changes in net position?
Allow users to determine the cost of providing services and the cost of administering the
government - Answer According to GASB concept statements, which of the following is not an
objective of financial reporting for a state or local government?
Debt service fund ($5,300,000) - Answer Dale City is accumulating financial resources that are
legally restricted to payments of general long-term debt principal and interest maturing in
future years. At December 31, 20X3, $5,000,000 has been accumulated for principal payments
and $300,000 has been accumulated for interest payments. These restricted funds should be
accounted for in the
Investing Activities - Answer A city's water enterprise fund received interest of $10,000 on
long-term investments. How should this amount be reported on the Statement of Cash Flows?
Permanent - Answer Tang City received land from a donor who stipulated that the land must
remain intact, but any income generated from the property may be used for general
government services. In which fund should Tang City record the donated land?
Both financial control and legal restrictions - Answer Which of the following lead(s) to the use
of fund accounting by a governmental organization?
Focus: Economic resources
All Correct Answers.
Accrual - Answer Which basis of accounting is required for a city's government-wide financial
statements?
$5,000 - Answer Elm City issued a purchase order for supplies with an estimated cost of
$5,000. When the supplies were received, the accompanying invoice indicated an actual price of
$4,950. What amount should Elm debit (credit) to Budgetary Fund Balance - Reserved for
Encumbrances after the supplies and invoice were received?
Non-operating revenues - Answer How should state appropriations to a state university
choosing to report as engaged only in business-type activities be reported in its statement of
revenues, expenses, and changes in net position?
Allow users to determine the cost of providing services and the cost of administering the
government - Answer According to GASB concept statements, which of the following is not an
objective of financial reporting for a state or local government?
Debt service fund ($5,300,000) - Answer Dale City is accumulating financial resources that are
legally restricted to payments of general long-term debt principal and interest maturing in
future years. At December 31, 20X3, $5,000,000 has been accumulated for principal payments
and $300,000 has been accumulated for interest payments. These restricted funds should be
accounted for in the
Investing Activities - Answer A city's water enterprise fund received interest of $10,000 on
long-term investments. How should this amount be reported on the Statement of Cash Flows?
Permanent - Answer Tang City received land from a donor who stipulated that the land must
remain intact, but any income generated from the property may be used for general
government services. In which fund should Tang City record the donated land?
Both financial control and legal restrictions - Answer Which of the following lead(s) to the use
of fund accounting by a governmental organization?
Focus: Economic resources
