FINAL CPFO ACCOUNTING EXAM - CONSOLIDATED -
PART 3 - CHAPTERS 18-19, 21, 29-32, 34-36,41, 44-47
Which of the following would be reported as a deferred item in the governmental fund
financial statements, but not in the government-wide financial statements?
A. Unavailable revenue
B. Unearned revenue
C. Deferred charge - difference between net carrying amount of refunded debt and
reacquisition price
D. All of the above
E. None of the above - Answers - [Correct response = A]
The deferral of revenue because it is unavailable is unique to financial statements
prepared using the current financial resources measurement focus (governmental
funds).
Source: 2021 eGAAFR 2.18 Exercises
2. Which of the following accounts would appear in the statement of financial position
for governmental funds?
A. Discount on long-term debt
B. Bonds payable
C. Both A and B
D. Neither A nor B - Answers - [Correct response = D]
For governmental funds, cash is the only account on the statement of financial position
affected by the issuance of long-term debt.
Source: 2021 eGAAFR 2.18 Exercises
Which of the following accounts would appear in the statement of financial position for
governmental activities?
A. Discount on long-term debt
B. Bonds payable
C. Both A and B
D. Neither A nor B - Answers - [Correct response = C]
For governmental activities (economic resources measurement focus/accrual basis of
accounting), the issuance of long-term debt primarily affects the statement of financial
position.
Source: 2021 eGAAFR 2.18 Exercises
,The amount of the adjustment for capital outlays normally should equal the amount
reported as capital outlays on the governmental fund statement of revenues,
expenditures, and changes in fund balances.
A. True
B. False - Answers - [Correct response = B]
The character classification capital outlays normally is used only in capital projects
funds. Capital acquisition in the general fund typically is reported in the appropriate
functional category. Moreover, the amount reported as capital outlays in a capital
projects fund may include amounts related to a project, but not ultimately capitalized (for
example, furnishings). The worksheet conversion adjustment would include all amounts
ultimately capitalized (including expenditures reported in the various functions of the
general fund) and only capitalized amounts (excluding capital outlays reported in capital
projects funds for amounts that were not ultimately capitalized).
Source: 2021 eGAAFR 2.18 Exercises
Source: 2021 eGAAFR 2.18 Exercises
An internal service fund is deemed to predominately service governmental funds. Which
of the following items from the internal service fund statement of net position would be
incorporated directly into governmental activities in the government-wide statement of
net position?
A. Assets
B. Liabilities
C. Both A and B
D. Neither A nor B - Answers - [Correct response = C]
Although they are classified as proprietary, if an internal service fund is determined to
provide services predominately to governmental funds, then it is incorporated as part of
governmental activities for purposes of government-wide financial reporting. When so,
internal service funds are treated essentially as though they were an additional
governmental fund type for purposes of government-wide financial reporting. That is,
the various permanent accounts of internal service funds are combined on the
worksheet with the corresponding accounts related to governmental funds.
Source: 2021 eGAAFR 2.18 Exercises
Which of the following items from the internal service fund statement of revenues,
expenses, and changes in net position would be incorporated directly into governmental
activities in the government-wide statement of activities?
A. Investment income
,B. Interest expense
C. Both A and B
D. Neither A nor B - Answers - [Correct response = C]
Increases and decreases in internal service fund net position associated with non-
operating items (investment earnings, interest expense, gains, and losses) should not
be eliminated in the process of consolidation.
Source: 2021 eGAAFR 2.18 Exercises
How is internally generated profit in an internal service fund treated in the process of
consolidation from the vantage point of the governmental activities column?
A. Reduction of expenditures
B. Liability
C. Either A or B, depending on the specific circumstances
D. Either A or B, at the government's option - Answers - [Correct response = C]
An internal service fund operating surplus from internal customers is eliminated (debit)
by reducing the amount reported as expenditures by from internal customers functions
(credit). For customers reported in business-type activities (enterprise funds), an
internal payable ("crossover adjustment") replaces a reduction of expenditures.
Source: 2021 eGAAFR 2.18 Exercises
Which of the following would be eliminated in the process of consolidation?
A. Revenues/expenditures related to interfund services provided and used
B. Receivables/payables between governmental funds
C. Both A and B - Answers - [Correct response = B]
Interfund balances between funds reported within the same activity column of the
government-wide statement of net position must be eliminated in the process of
consolidation. Conversely, revenues and expenditures/expense related to interfund
services provided and used between functions are not eliminated in the process of
consolidation, because to do so would compromise the cost information reported in
each function.
Source: 2021 eGAAFR 2.18 Exercises
Which of the following is a basic government-wide financial statement?
A. Statement of net position
B. Statement of activities
C. Statement of cash flows
D. All of the above
, E. Both A and B - Answers - [Correct response = E]
Proprietary funds, like private-sector businesses, present three basic financial
statements: a statement of financial position, a statement of resource flows - accrual
basis, and a statement of resource flows - cash basis. The government-wide financial
statements present just two basic financial statements: a statement of financial position,
known as the statement of net position, and a statement of resource flows - accrual
basis, known as the statement of activities. The basic government-wide financial
statements do not include a statement of cash flows.
Source: 2021 eGAAFR 2.19 Exercises
Which of the following adjustments involves only a change in terminology, rather than
an adjustment to the measurement focus or basis of accounting, for conversion from a
governmental fund to government-wide activities?
A. Sale of capital assets
B. Sale of fund assets
C. Both A and B
D. Neither A nor B - Answers - [Correct response = B]
In the case of the sale of an asset that is reported in a governmental fund (investments),
the only difference between the treatment in the governmental fund financial statements
and the government-wide financial statements would be one of terminology (revenue v.
gain).
Source: 2021 eGAAFR 2.18 Exercises
Which of the following would be reflected as an adjustment to fund balance/net position
on the adjustments worksheet?
A. Revenues of the current period related to prior periods
B. Unavailable revenue - prior periods
C. Unavailable revenue - current period
D. All of the above
E. Both A and B - Answers - [Correct response = E]
Revenues are closed to fund balance at the end of each reporting period; therefore,
adjustments to amounts that would have been reported as revenues in a prior period
must be made to fund balance, which is ultimately reclassified as "net position."
Source: 2021 eGAAFR 2.18 Exercises
How should a government record the adjustments made to convert the governmental
funds to governmental activities?
PART 3 - CHAPTERS 18-19, 21, 29-32, 34-36,41, 44-47
Which of the following would be reported as a deferred item in the governmental fund
financial statements, but not in the government-wide financial statements?
A. Unavailable revenue
B. Unearned revenue
C. Deferred charge - difference between net carrying amount of refunded debt and
reacquisition price
D. All of the above
E. None of the above - Answers - [Correct response = A]
The deferral of revenue because it is unavailable is unique to financial statements
prepared using the current financial resources measurement focus (governmental
funds).
Source: 2021 eGAAFR 2.18 Exercises
2. Which of the following accounts would appear in the statement of financial position
for governmental funds?
A. Discount on long-term debt
B. Bonds payable
C. Both A and B
D. Neither A nor B - Answers - [Correct response = D]
For governmental funds, cash is the only account on the statement of financial position
affected by the issuance of long-term debt.
Source: 2021 eGAAFR 2.18 Exercises
Which of the following accounts would appear in the statement of financial position for
governmental activities?
A. Discount on long-term debt
B. Bonds payable
C. Both A and B
D. Neither A nor B - Answers - [Correct response = C]
For governmental activities (economic resources measurement focus/accrual basis of
accounting), the issuance of long-term debt primarily affects the statement of financial
position.
Source: 2021 eGAAFR 2.18 Exercises
,The amount of the adjustment for capital outlays normally should equal the amount
reported as capital outlays on the governmental fund statement of revenues,
expenditures, and changes in fund balances.
A. True
B. False - Answers - [Correct response = B]
The character classification capital outlays normally is used only in capital projects
funds. Capital acquisition in the general fund typically is reported in the appropriate
functional category. Moreover, the amount reported as capital outlays in a capital
projects fund may include amounts related to a project, but not ultimately capitalized (for
example, furnishings). The worksheet conversion adjustment would include all amounts
ultimately capitalized (including expenditures reported in the various functions of the
general fund) and only capitalized amounts (excluding capital outlays reported in capital
projects funds for amounts that were not ultimately capitalized).
Source: 2021 eGAAFR 2.18 Exercises
Source: 2021 eGAAFR 2.18 Exercises
An internal service fund is deemed to predominately service governmental funds. Which
of the following items from the internal service fund statement of net position would be
incorporated directly into governmental activities in the government-wide statement of
net position?
A. Assets
B. Liabilities
C. Both A and B
D. Neither A nor B - Answers - [Correct response = C]
Although they are classified as proprietary, if an internal service fund is determined to
provide services predominately to governmental funds, then it is incorporated as part of
governmental activities for purposes of government-wide financial reporting. When so,
internal service funds are treated essentially as though they were an additional
governmental fund type for purposes of government-wide financial reporting. That is,
the various permanent accounts of internal service funds are combined on the
worksheet with the corresponding accounts related to governmental funds.
Source: 2021 eGAAFR 2.18 Exercises
Which of the following items from the internal service fund statement of revenues,
expenses, and changes in net position would be incorporated directly into governmental
activities in the government-wide statement of activities?
A. Investment income
,B. Interest expense
C. Both A and B
D. Neither A nor B - Answers - [Correct response = C]
Increases and decreases in internal service fund net position associated with non-
operating items (investment earnings, interest expense, gains, and losses) should not
be eliminated in the process of consolidation.
Source: 2021 eGAAFR 2.18 Exercises
How is internally generated profit in an internal service fund treated in the process of
consolidation from the vantage point of the governmental activities column?
A. Reduction of expenditures
B. Liability
C. Either A or B, depending on the specific circumstances
D. Either A or B, at the government's option - Answers - [Correct response = C]
An internal service fund operating surplus from internal customers is eliminated (debit)
by reducing the amount reported as expenditures by from internal customers functions
(credit). For customers reported in business-type activities (enterprise funds), an
internal payable ("crossover adjustment") replaces a reduction of expenditures.
Source: 2021 eGAAFR 2.18 Exercises
Which of the following would be eliminated in the process of consolidation?
A. Revenues/expenditures related to interfund services provided and used
B. Receivables/payables between governmental funds
C. Both A and B - Answers - [Correct response = B]
Interfund balances between funds reported within the same activity column of the
government-wide statement of net position must be eliminated in the process of
consolidation. Conversely, revenues and expenditures/expense related to interfund
services provided and used between functions are not eliminated in the process of
consolidation, because to do so would compromise the cost information reported in
each function.
Source: 2021 eGAAFR 2.18 Exercises
Which of the following is a basic government-wide financial statement?
A. Statement of net position
B. Statement of activities
C. Statement of cash flows
D. All of the above
, E. Both A and B - Answers - [Correct response = E]
Proprietary funds, like private-sector businesses, present three basic financial
statements: a statement of financial position, a statement of resource flows - accrual
basis, and a statement of resource flows - cash basis. The government-wide financial
statements present just two basic financial statements: a statement of financial position,
known as the statement of net position, and a statement of resource flows - accrual
basis, known as the statement of activities. The basic government-wide financial
statements do not include a statement of cash flows.
Source: 2021 eGAAFR 2.19 Exercises
Which of the following adjustments involves only a change in terminology, rather than
an adjustment to the measurement focus or basis of accounting, for conversion from a
governmental fund to government-wide activities?
A. Sale of capital assets
B. Sale of fund assets
C. Both A and B
D. Neither A nor B - Answers - [Correct response = B]
In the case of the sale of an asset that is reported in a governmental fund (investments),
the only difference between the treatment in the governmental fund financial statements
and the government-wide financial statements would be one of terminology (revenue v.
gain).
Source: 2021 eGAAFR 2.18 Exercises
Which of the following would be reflected as an adjustment to fund balance/net position
on the adjustments worksheet?
A. Revenues of the current period related to prior periods
B. Unavailable revenue - prior periods
C. Unavailable revenue - current period
D. All of the above
E. Both A and B - Answers - [Correct response = E]
Revenues are closed to fund balance at the end of each reporting period; therefore,
adjustments to amounts that would have been reported as revenues in a prior period
must be made to fund balance, which is ultimately reclassified as "net position."
Source: 2021 eGAAFR 2.18 Exercises
How should a government record the adjustments made to convert the governmental
funds to governmental activities?
