Govt. and NFP Test 1 Questions and Answers
100% Correct
Which of the following is a true statement regarding the definition of a fund:
A. A fund is a fiscal entity which is designed to provide reporting that demonstrates conformance
with finance-related legal and contractual provisions separately from GAAP reporting.
B. A fund is an accounting entity which is designed to enable reporting in conformity with
GAAP without being restricted by legal provisions.
C. A fund is a mechanism developed to provide accounting for revenue and expenses that are
subject to certain restrictions.
D. A fund exists to assist in carrying on activities and attaining objectives when there are no
specific restrictions. A. A fund is a fiscal entity which is designed to provide reporting that
demonstrates conformance with finance-related legal and contractual provisions separately from
GAAP reporting.
Which of the following statements is true regarding the basic financial statements of a state or
local government:
A. Separate columns should be provided in govt.-wide financial statements for govt. activities
and business-type activities.
,B. Govt. fund and proprietary fund financial statements should provide a separate column for
each major fund.
C. Aggregate information about all non-major govt. funds or non-major enterprise funds should
be reported in a single column of the govt. fund or proprietary fund financial statements
D. All of the above D. All of the above
Which of the following sets of elements are common for both govt. financial statements and NFP
financial statements?
A. Assets and net position
B. Deferred outflows of resources and liabilities
C. Assets and Liabilities
D. Net position and liabilities C. Assets and Liabilities
The measurement focus and basis for accounting that should be used for the govt. fund F/S are:
Current Financial Resources
Modified Accrual
,Which of the following amounts that are identified at the end of the fiscal year would be
classified as a restricted fund balance:
A. Resources the city manager has set aside for major street repair
B. A federal grant that is to be used for playground equipment
C. Significant amounts of inventory
D. Endowment resources that the city must maintain in perpetuity B. Federal grant that is
to be used for playground equipment
Separate reporting for major funds is needed because:
A. Users of govt. F/S are usually interested in the details of every fund used by a govt.
B. It is illegal to aggregate funds where the elements of the fund represent at least 5% of the
corresponding element for all funds of the same type
C. Users of govt. F/S need to be able to examine the activities and resources fiduciary funds
D. Users of Govt. F/S need to be able to examine funds that represent large dollar amounts of
govts. resources and activities D. Users of Govt. F/S need to be able to examine funds that
represent large dollar amounts of govts. resources and activities.
Assets and Liabilities of activities for which the govt. is acting in either an agency or trustee
capacity for individuals organizations or other govts. should be reported as:
, A. The fiduciary column of the govt. wide F/S
B. The fiduciary fund F/S
C. Both govt. wide and fiduciary fund statements
D. Neither govt.-wide nor fiduciary fund statements D. - The fiduciary fund F/S
Under the modified accrual basis of accounting:
A. Revenues are recognized at the the time an exchange transaction occurs
B. Expenditures are recognized as the cost of an asset expires or is used up in providing govt.
services
C. Revenues are recognized when current financial resources become measurable and available
to pay current period obligations
D. Expenses are recognized when an obligation occurs for costs incurred in providing services
C. - Revenues are recognized when current financial resources become measurable and
available to pay current period obligations
Financial information about an internal service fund should be reported in the proprietary fund
financial statements and the:
A. Govt. Activities column of the govt-wide F/S
B. Business-type activities column of the govt-wide F/S
100% Correct
Which of the following is a true statement regarding the definition of a fund:
A. A fund is a fiscal entity which is designed to provide reporting that demonstrates conformance
with finance-related legal and contractual provisions separately from GAAP reporting.
B. A fund is an accounting entity which is designed to enable reporting in conformity with
GAAP without being restricted by legal provisions.
C. A fund is a mechanism developed to provide accounting for revenue and expenses that are
subject to certain restrictions.
D. A fund exists to assist in carrying on activities and attaining objectives when there are no
specific restrictions. A. A fund is a fiscal entity which is designed to provide reporting that
demonstrates conformance with finance-related legal and contractual provisions separately from
GAAP reporting.
Which of the following statements is true regarding the basic financial statements of a state or
local government:
A. Separate columns should be provided in govt.-wide financial statements for govt. activities
and business-type activities.
,B. Govt. fund and proprietary fund financial statements should provide a separate column for
each major fund.
C. Aggregate information about all non-major govt. funds or non-major enterprise funds should
be reported in a single column of the govt. fund or proprietary fund financial statements
D. All of the above D. All of the above
Which of the following sets of elements are common for both govt. financial statements and NFP
financial statements?
A. Assets and net position
B. Deferred outflows of resources and liabilities
C. Assets and Liabilities
D. Net position and liabilities C. Assets and Liabilities
The measurement focus and basis for accounting that should be used for the govt. fund F/S are:
Current Financial Resources
Modified Accrual
,Which of the following amounts that are identified at the end of the fiscal year would be
classified as a restricted fund balance:
A. Resources the city manager has set aside for major street repair
B. A federal grant that is to be used for playground equipment
C. Significant amounts of inventory
D. Endowment resources that the city must maintain in perpetuity B. Federal grant that is
to be used for playground equipment
Separate reporting for major funds is needed because:
A. Users of govt. F/S are usually interested in the details of every fund used by a govt.
B. It is illegal to aggregate funds where the elements of the fund represent at least 5% of the
corresponding element for all funds of the same type
C. Users of govt. F/S need to be able to examine the activities and resources fiduciary funds
D. Users of Govt. F/S need to be able to examine funds that represent large dollar amounts of
govts. resources and activities D. Users of Govt. F/S need to be able to examine funds that
represent large dollar amounts of govts. resources and activities.
Assets and Liabilities of activities for which the govt. is acting in either an agency or trustee
capacity for individuals organizations or other govts. should be reported as:
, A. The fiduciary column of the govt. wide F/S
B. The fiduciary fund F/S
C. Both govt. wide and fiduciary fund statements
D. Neither govt.-wide nor fiduciary fund statements D. - The fiduciary fund F/S
Under the modified accrual basis of accounting:
A. Revenues are recognized at the the time an exchange transaction occurs
B. Expenditures are recognized as the cost of an asset expires or is used up in providing govt.
services
C. Revenues are recognized when current financial resources become measurable and available
to pay current period obligations
D. Expenses are recognized when an obligation occurs for costs incurred in providing services
C. - Revenues are recognized when current financial resources become measurable and
available to pay current period obligations
Financial information about an internal service fund should be reported in the proprietary fund
financial statements and the:
A. Govt. Activities column of the govt-wide F/S
B. Business-type activities column of the govt-wide F/S
