ACCT 4421 Module 2 Quiz
comprehensive Questions and Answers
with Verified Solutions
Question 1:
If a government records the budget, and actual revenues exceed
budgeted revenues, what would be the impact on the year-end financial
statements? A. The difference between actual and budgeted revenues
would be recorded as a budgetary reserve on the balance sheet. B. The
difference between actual and budgeted revenues would be shown as a
revenue contra account on the statement of revenues and expenditures.
C. The difference between actual and budgeted revenues would be
reported on neither the balance sheet nor the statement of revenues and
expenditures. D. The actual revenues would be shown on the statement
of revenues and expenditures as a deduction from estimated revenues.
Answer:
C. The difference between actual and budgeted revenues would be
reported on neither the balance sheet nor the statement of revenues and
expenditures.
Question 2:
Upon closing the books at year-end, a government should A. debit
encumbrances and credit reserve for encumbrances. B. debit fund
balance and credit encumbrances. C. debit reserve for encumbrances
and credit encumbrances. D. debit fund balance and credit reserve for
encumbrances.
Answer:
B. debit fund balance and credit encumbrances.
, Question 3:
In 2021, city employees earned $3.6 million in vaca-
Answer:
tion pay that they did not use during the year. The city estimates that of
this amount, $2.8 million will be paid in 2022 (out of amounts budgeted
for that year),
Question 4:
Per GASB Statement No. 34, governments must A. prepare a general
fund budget on a modified accrual basis. B. prepare a schedule that
reconciles any differences between the original budget and the amended
budget. C. prepare a general fund budget on a cash basis. D. prepare a
schedule that reconciles any differences between amounts reported on a
GAAP basis and a budgetary basis.
Answer:
D. prepare a schedule that reconciles any differences between amounts
reported on a GAAP basis and a budgetary basis.
Question 5:
Appropriation budgets are typically concerned with A. the details of
appropriated expenditures. B. long-term revenues and expenditures. C.
capital outlays. D. current operating revenues and expenditures.
Answer:
D. current operating revenues and expenditures.
Question 6:
Upon receiving supplies that had previously been encumbered, a
government should
Answer:
D. debit reserve for encumbrances and credit encumbrances.
comprehensive Questions and Answers
with Verified Solutions
Question 1:
If a government records the budget, and actual revenues exceed
budgeted revenues, what would be the impact on the year-end financial
statements? A. The difference between actual and budgeted revenues
would be recorded as a budgetary reserve on the balance sheet. B. The
difference between actual and budgeted revenues would be shown as a
revenue contra account on the statement of revenues and expenditures.
C. The difference between actual and budgeted revenues would be
reported on neither the balance sheet nor the statement of revenues and
expenditures. D. The actual revenues would be shown on the statement
of revenues and expenditures as a deduction from estimated revenues.
Answer:
C. The difference between actual and budgeted revenues would be
reported on neither the balance sheet nor the statement of revenues and
expenditures.
Question 2:
Upon closing the books at year-end, a government should A. debit
encumbrances and credit reserve for encumbrances. B. debit fund
balance and credit encumbrances. C. debit reserve for encumbrances
and credit encumbrances. D. debit fund balance and credit reserve for
encumbrances.
Answer:
B. debit fund balance and credit encumbrances.
, Question 3:
In 2021, city employees earned $3.6 million in vaca-
Answer:
tion pay that they did not use during the year. The city estimates that of
this amount, $2.8 million will be paid in 2022 (out of amounts budgeted
for that year),
Question 4:
Per GASB Statement No. 34, governments must A. prepare a general
fund budget on a modified accrual basis. B. prepare a schedule that
reconciles any differences between the original budget and the amended
budget. C. prepare a general fund budget on a cash basis. D. prepare a
schedule that reconciles any differences between amounts reported on a
GAAP basis and a budgetary basis.
Answer:
D. prepare a schedule that reconciles any differences between amounts
reported on a GAAP basis and a budgetary basis.
Question 5:
Appropriation budgets are typically concerned with A. the details of
appropriated expenditures. B. long-term revenues and expenditures. C.
capital outlays. D. current operating revenues and expenditures.
Answer:
D. current operating revenues and expenditures.
Question 6:
Upon receiving supplies that had previously been encumbered, a
government should
Answer:
D. debit reserve for encumbrances and credit encumbrances.
