ACCT 4421 Module 2 Quiz UPDATED
ACTUAL Exam Questions and CORRECT
Answers
Appropriation budgets are typically concerned with - CORRECT ANSWER - current
operating revenues and expenditures.
On December 1, 2021, Nolanville issued $10 million of 30-year, 8 percent bonds for $9.78
million, a price that reflects a semiannual yield of 4.1 percent. Interest ($400,000 per semiannual
period) is payable on May 31 and November 30, beginning May 31, 2022.
In its 2021 fund and government-wide statements, Nolanville should report an interest
expenditure - CORRECT ANSWER - expense of/
Fund Statement $0 Government-Wide Statement $66,830
In 2021, city employees earned $3.6 million in vacation 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), $0.6 million will be paid in subsequent years, and the balance of $0.2
million will not have to be paid.
The amount that the city should add to a fund-statement liability account as of year-end 2021 is -
CORRECT ANSWER - $0
Which of the following accounts would a government be most likely to debit as part of its year-
end closing process? - CORRECT ANSWER - revenues, appropriations, and fund balance
In adopting and recording the budget, a government should - CORRECT ANSWER - debit
estimated revenues and credit fund balance.
A government requires that all appropriations lapse at the end of a year. At the end of year 1, that
government has $100,000 of goods and services on order. At the start of Year 2, the government
should - CORRECT ANSWER - debit encumbrances and credit fund balance.
, Per GASB Statement No. 34, governments must - CORRECT ANSWER - prepare a
schedule that reconciles any differences between amounts reported on a GAAP basis and a
budgetary basis.
Upon closing the books at year-end, a government should - CORRECT ANSWER - debit
fund balance and credit encumbrances
A government places an order for a particular item of equipment and encumbers $5,500. The
item arrives accompanied by an invoice for $5,200. The entries that the government should make
should include (but are not necessarily be limited to): - CORRECT ANSWER - a debit to
expenditures for $5,200, a credit to encumbrances for $5,500, and credit to accounts payable for
$5,200
Which of the following types of budgets would be most likely to include a line-item "purchase of
supplies?" - CORRECT ANSWER - object classification
A primary virtue of an object classification budget is that it - CORRECT ANSWER -
facilitates control by establishing detailed spending mandates.
In 2021, city employees earned $3.6 million in vacation 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), $0.6 million will be paid in subsequent years, and the balance of $0.2
million will not have to be paid.
The amount that the city should add to the liability account in the government-wide statement of
net position as of year-end 2021 is - CORRECT ANSWER - $3.4 million
In 2021, city employees earned $1.4 million in sick leave that they did not take during the year.
The city estimates that of this amount, $0.8 million will actually be paid to employees who take
sick leave. Of the balance, $0.1 million will be paid to employees upon their retirement or
resignation and $0.5 million will not have to be paid (since employees are limited in the number
of sick days that they can carry over from one year to the next).
The amount that the city should add to the liability account in the government-wide statement of
net position as of year-end 2021 is - CORRECT ANSWER - $0.1 million
ACTUAL Exam Questions and CORRECT
Answers
Appropriation budgets are typically concerned with - CORRECT ANSWER - current
operating revenues and expenditures.
On December 1, 2021, Nolanville issued $10 million of 30-year, 8 percent bonds for $9.78
million, a price that reflects a semiannual yield of 4.1 percent. Interest ($400,000 per semiannual
period) is payable on May 31 and November 30, beginning May 31, 2022.
In its 2021 fund and government-wide statements, Nolanville should report an interest
expenditure - CORRECT ANSWER - expense of/
Fund Statement $0 Government-Wide Statement $66,830
In 2021, city employees earned $3.6 million in vacation 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), $0.6 million will be paid in subsequent years, and the balance of $0.2
million will not have to be paid.
The amount that the city should add to a fund-statement liability account as of year-end 2021 is -
CORRECT ANSWER - $0
Which of the following accounts would a government be most likely to debit as part of its year-
end closing process? - CORRECT ANSWER - revenues, appropriations, and fund balance
In adopting and recording the budget, a government should - CORRECT ANSWER - debit
estimated revenues and credit fund balance.
A government requires that all appropriations lapse at the end of a year. At the end of year 1, that
government has $100,000 of goods and services on order. At the start of Year 2, the government
should - CORRECT ANSWER - debit encumbrances and credit fund balance.
, Per GASB Statement No. 34, governments must - CORRECT ANSWER - prepare a
schedule that reconciles any differences between amounts reported on a GAAP basis and a
budgetary basis.
Upon closing the books at year-end, a government should - CORRECT ANSWER - debit
fund balance and credit encumbrances
A government places an order for a particular item of equipment and encumbers $5,500. The
item arrives accompanied by an invoice for $5,200. The entries that the government should make
should include (but are not necessarily be limited to): - CORRECT ANSWER - a debit to
expenditures for $5,200, a credit to encumbrances for $5,500, and credit to accounts payable for
$5,200
Which of the following types of budgets would be most likely to include a line-item "purchase of
supplies?" - CORRECT ANSWER - object classification
A primary virtue of an object classification budget is that it - CORRECT ANSWER -
facilitates control by establishing detailed spending mandates.
In 2021, city employees earned $3.6 million in vacation 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), $0.6 million will be paid in subsequent years, and the balance of $0.2
million will not have to be paid.
The amount that the city should add to the liability account in the government-wide statement of
net position as of year-end 2021 is - CORRECT ANSWER - $3.4 million
In 2021, city employees earned $1.4 million in sick leave that they did not take during the year.
The city estimates that of this amount, $0.8 million will actually be paid to employees who take
sick leave. Of the balance, $0.1 million will be paid to employees upon their retirement or
resignation and $0.5 million will not have to be paid (since employees are limited in the number
of sick days that they can carry over from one year to the next).
The amount that the city should add to the liability account in the government-wide statement of
net position as of year-end 2021 is - CORRECT ANSWER - $0.1 million
