Q&A Hero

Q: What basis of accounting is used by proprietary funds?A) Modified accrual accountingB) Accrual accountingC) Cash basis accountingD) Fair value accounting

Q: Based upon the flow information provided below for the year ending December 31, 2011, prepare a cash flow statement for the Downtown City Motor Pool, an internal service fund.Cash received from customers $830,000Cash received from General Fund (noncapital loan) 20,000Interest revenue received 1,000Cash received from short-term note payable (not used for capital assets) 40,000Payments to employees 450,000Payments to suppliers 250,000Cash paid to the General Fund - noncapital loan 65,000Payments for capital improvements 60,000Interest paid on short-term note payable above 2,000Principal paid on capital debt 50,000Interest paid on capital debt 5,000Unrestricted Cash (and cash equivalents), January 1, 2011 13,000

Q: The four cash flow categories required in an Enterprise Fund's Statement of Cash Flows are listed below and assigned a letter code.A) Cash flows from operating activitiesB) Cash flows from noncapital financing activitiesC) Cash flows from capital and related financing activitiesD) Cash flows from investing activities Required:Use the correct letter code to indicate where each of the following ten items associated with an Enterprise Fund should be reported in the Statement of Cash Flows.1. An enterprise fund's fixed asset was sold for cash.2. Cash paid to suppliers for goods.3. Paid principal, $100,000, and interest, $5,000, on a mortgage.4. Cash proceeds from sale of investments, $65,000.5. Cash paid for new equipment, $18,000.6. Cash received from the general fund; restricted to cover part of the cost of plant expansion, $900,000.7. Cash received from another fund as a 6-month loan for the sole purpose of financing purchase of equipment, $47,000.8. Cash proceeds from issuing bonds for an enterprise fund's construction project.9.Cash paid to employees for salaries.10. Cash received from interest earned on investments.

Q: Based upon the cash flow information provided below for the year ended December 31, 2011, prepare a cash flow statement for the Bloomfield Municipal Golf Course, an enterprise fund.Green fees received $400,000Membership fees received 160,000League outing fees received 90,000Interest revenue received 2,000Cash received from short-term note payable (not used for capital assets) 75,000Payments to employees 350,000Payments to suppliers 198,000Cash paid to the General Fund - Noncapital loan 60,000Payments for capital improvements 85,000Interest paid on short-term loan (loan not used for capital assets) 5,000Unrestricted cash and cash equivalents, January 1, 2011 17,000

Q: Prepare journal entries to record the following grant-related transactions of the municipal swimming pool, which is funded primarily by membership fees. 1. Received an operating grant in cash from the state for $200,000, to be used for life-saving and first-aid training. 2. Incurred and paid qualifying expenses on the state grant program by providing training, $165,000. 3. Received a federal grant to finance purchase of an energy efficient heating system for the pool, $120,000 (cash received in advance). 4. New heating system installed and paid, $115,000.

Q: Prepare journal entries to record the following grant-related transactions of an Enterprise Fund. 1. Received an operating grant in cash from the state, $2,500,000. 2. Incurred and paid qualifying operating expenses on the state grant program, $1,600,000. 3. Received a federal grant to finance construction of a plant, $4,500,000 (cash received in advance). 4. Incurred and paid construction costs on the plant, $3,000,000. The plant is not completed.

Q: Journalize the following municipal zoo transactions in the Lackluster County Enterprise Fund: 1. The zoo issued $1,000,000 of 5% revenue bonds at 99 on July 1, 2011 (an interest payment date). The bond proceeds are to be used for a new polar bear exhibit and the issue will mature in 20 years. Interest is paid on January 1 and July 1. 2. Depreciation for the year-ended December 31, 2011 included $175,000 for buildings and $105,000 for outdoor exhibit areas. 3. The zoo paid $800,000 in construction costs for the new exhibit. The exhibit is still under construction. 4. Interest on the revenue bonds was accrued at year-end, December 31, 2011. Straight-line amortization is used for bond discounts and premiums.

Q: Journalize the following utility transactions in the Hazzard County Enterprise Fund: 1.The utility sold $4,000,000 of 6.5% revenue bonds at 98 on July 1, 2011 (an interest payment date). The bond proceeds are to be used for new plant construction and the issue will mature in 20 years. Interest is paid semi-annually on July 1 and January 1. 2. Depreciation for the year-ended December 31, 2011 included $300,000 for buildings and $190,000 for equipment. 3. The utility paid $600,000 in construction costs for the new plant.The plant is still under construction. 4. Interest on the revenue bonds was accrued at year-end, December 31, 2011. Straight-line amortization is used for bond discounts and premiums.

Q: Prepare journal entries in the motor pool department of Hill County to record each of the following transactions. 1. The General Fund contributed $50,000 cash to the motor pool department. The motor pool department purchased four vehicles on July 1, 2011 by paying $50,000 down and borrowing $70,000 on a 5%, 3-year note. 2. Billed General Fund departments $430,000 for services provided to those departments. Billings to the Enterprise Fund totaled $210,000. All billings were collected by year-end(June 30, 2012) except for $80,000 charged to the General Fund. 3. Accrued year-end adjustments at June 30, 2012 for interest expense and depreciation. The useful life of the equipment is 5 years with no salvage value.

Q: Prepare journal entries in an Internal Service Fund of Union County to record each of the following transactions. Purchased equipment on September 1, 2011 by paying $25,000 down and borrowing $100,000 on a 6%, 2-year note. 2. In 2011, billed General Fund $620,000 for services provided. Billings to the Enterprise Fund totaled $165,000. All billings were collected by December 31, 2011 except for $100,000 charged to the General Fund. 3. Accrued year-end adjustments at December 31, 2011 for interest expense and depreciation. The useful life of the equipment is 5 years with no salvage value.

Q: Journalize the following utility transactions in the Quest County Enterprise Fund: 1. Billings to external customers $1,600,000; billings to Quest County governmental funds $130,000. 2. Collected refundable deposits from new customers $10,000. 3. Collected 95% of all billings by fiscal year-end. 4. Refunded $4,000 in deposits to former customers. 5. Unbilled services to outside customers at year-end $14,000.

Q: Static City started a department to provide copy, printing and mailing services for all departments and agencies of the city.During the fiscal year from July 1, 2010 through June 30, 2011, the copy services department had the following transactions:1. Paper and toner inventory was purchased for $58,000, on account.2. The paper and toner inventory physical count showed only $8,000 on hand at June 30, 2011.3. The department billed other departments for services rendered to them amounting to: General Fund, $43,000; Enterprise Fund, $24,000; Debt Service Fund, $21,000; and Trust Fund, $16,000. All receivables were collected with the exception of $6,000 from the Trust Fund which is expected to be collected in July, 2011.4. The department incurred and paid the following expenses: salaries and wages, $23,000; Electric, $8,000; Other operating expenses, $6,000. Also, $63,000 of the Accounts Payable were paid during the year.5. Depreciation Expense on Equipment amounted to $6,000 for the year ending June 30, 2011.6. The department prepared the closing entry on June 30, 2011.Required:For the fiscal year ended June 30, 2011, prepare the journal entries to record the transactions for the Internal Service Fund.

Q: A trust fund was created to assist local students in financial need. The following transactions occurred in the trust. 1. The committee forming the fund was able to raise $700,000 and invested the funds so that the principal would remain indefinitely, and the earnings would be used to aid needy students. 2. During the year, the fund earned $65,000 interest. Earnings remain invested in the trust until withdrawn to distribute, so the interest was invested. 3. $50,000 of the investments were sold, withdrawn, and distributed to provide scholarships. 4. The fund-raising committee contributed an additional $200,000 cash to the fund. This cash was deposited into the account and invested. 5. Interest earned but not yet deposited into the investment account was accrued at $17,000.Required:Prepare the necessary journal entries for each of the above transactions for the trust fund.

Q: An adjusted trial balance is provided below for the Dade County copy services department at June 30, 2011.Cash $ 21,000Due from Enterprise Fund 6,000Due from Debt Service Fund 2,000Supplies inventory 5,000Supplies used 3,000Equipment 32,000Salary expense 25,000Utility expense 9,000Depreciation expense 6,000Operating transfer to General Fund 4,000$113,000Accumulated depreciation $ 24,000Accounts payable 2,000Advance from General Fund (not for capital assets) 10,000Capital Contribution from General Fund 1,000Net assets (beginning) 28,000Revenue - services billed 48,000$113,000Required:1. Prepare a statement of revenues, expenses and changes in net assets for the copy services department for the year ended June 30, 2011.2. Prepare a statement of net assets for the copy services department at June 30, 2011. Assume all assets are not externally or internally restricted.

Q: Thoroughgood County has a municipal golf course and tennis club which is funded by the membership fees it charges. The club also has 6% bonds outstanding amounting to $20,000,000 on which it pays interest semi-annually. The club had the following transactions. 1. An addition to the golf clubhouse was added for $2,000,000, funded out of operations. 2. The following expenses were incurred and paid: $80,000 wages; $10,000 payroll taxes; $45,000 water bill; and $12,000 equipment repair. 3. Interest on the bonds was paid amounting to $600,000. 4. $5,000,000 of operating cash excess was repaid to the general fund for a previous loan. 5. Depreciation of $500,000 was recorded for the buildings. Required:Prepare the necessary journal entries for each of the above transactions for the Enterprise Fund.

Q: The following transactions relate to a municipal golf course and tennis club, financed with debt secured by membership fees. 1. The General Fund loaned $25,000,000 cash to the Enterprise Fund. The note is not interest-bearing. 2. The municipal golf course and tennis club purchased land and constructed the facilities which totaled expenditures of $23,700,000. 3. Bonds were issued by the municipal golf course and tennis club for $20,000,000, par value of the bonds. 4. Membership fees were billed in the amount of $4,800,000. $4,200,000 was collected. 5. $5,000,000 was repaid to the general fund, with the anticipation of repaying $5,000,000 more per year for the next four years.Required:Prepare the necessary journal entries for each of the above transactions for the Enterprise Fund.

Q: The City of Sill established an Internal Service Fund to provide cleaning services to all city offices and departments. The following transactions took place with respect to this event.1. The General Fund contributed cash of $49,000 to the Internal Service Fund. The General Fund provided a $10,000 loan to the Internal Service Fund.2. On January 1, 2011, the Internal Service Fund acquired a floor waxing machine for cash of $5,000. It has a 5 year life with no salvage value, and the city uses straight-line depreciation on their assets 3. The cleaning services department billed other government agencies and departments $226,000 and collected $187,000.4. The cleaning services department incurred and paid the following expenses: cleaning personnel wages, $65,000; payroll taxes, $10,000; cleaning supplies, $13,000; and office rental and utilities, $77,000. The cleaning services department also repaid the general fund for the loan.5. The cleaning services department prepared the journal entry to depreciate their assets for the year ending December 31, 2011.Required:Prepare the necessary journal entries for each of the above transactions for the Internal Service Fund.

Q: Willborough County had the following transactions in 2012.1. A central motor pool was established with a $200,000 nonreciprocal transfer from the General Fund.2. The water and sewer authority, which provides services to residents for a fee, issued a bond offering at $750,000 par. Bonds proceeds are restricted to renovating the treatment facility.3. Willborough received a grant from the state to be used for renovation of the courthouse amounting to $800,000. The General Fund will temporarily provide $100,000 cash, because the grant is set up on a reimbursement basis and will not be distributed until proper expenditures are documented.4.Willborough's central motor pool bills out automobile usage to various government agencies amounting to $42,000.5. The General Fund transfers $67,000 out of the operating budget to fund the county employees' pension plan.Required:Prepare the necessary journal entries for each of the above transactions for all funds affected. Be sure to identify the fund type for each entry

Q: Jefferson County had the following transactions in 2012.1. $27,000 in membership fees was collected at the municipal pool.2. A county collects $130,000 in sales taxes on behalf of the cities within its boundaries.3. A $500,000 bond offering was issued at 102 to fund the construction of a new city hall. The premium on the bonds was transferred to the Debt Service Fund(nonreciprocal).4. A private foundation contributes a stock portfolio with a fair value of $100,000 to the county. A trust agreement specifies the earnings on the fund is to be used by the local park which is owned and operated by a private foundation, and the principal is to be held intact indefinitely.5. The county sends bills out for water and sewer provided to residents, amounting to $340,000.Required:Prepare the necessary journal entries for each of the above transactions for all funds affected. Be sure to identify the fund type for each entry.

Q: The City's municipal golf course had the following transactions.1. Received a beautification(operating) grant from the state for $600,000. Received cash of $600,000.2. Incurred and paid qualifying expenses under the state grant program in (1) above of $280,000.3. Incurred and paid construction costs on an uncompleted clubhouse for $1,200,000.4. Received $1,000,000 cash from a grant to assist with construction costs for the clubhouse.Required:Given that the golf course is operated based on user fees for upkeep, prepare the necessary journal entries for each of these transactions.

Q: Proprietary funds are required to prepare financial statements that include:A. Statement of ActivitiesB. Statement of Revenues, Expenditures and Changes in Fund BalanceC. Balance SheetD. Statement of Cash FlowsE. Statement of Net AssetsF. Statement of Revenues, Expenses and Changes in Net AssetsA) C, D, FB) A, B, DC) B, C, DD) D, E, F

Q: The trust fund for a school library is required to prepare financial statements that includeA) Balance Sheet and Income Statement.B) Statement of Revenues, Expenses and Changes in Fiduciary Net Assets.C) Statement of Fund Balance and Statement of Changes in Fund Balance.D) Statement of Fiduciary Net Assets and Statement of Changes in Fiduciary Net Assets.

Q: The financial statements of a proprietary fund are similar to those of a business enterprise except forA) proprietary funds do not report income taxes on the operating statement.B) proprietary funds do not have paid-in capital or capital stock.C) proprietary funds use modified accrual accounting.D) both A and B

Q: Interest payments on loans outstanding that do not relate to acquiring, constructing or improving capital assets are classified as ________ on the cash flow statement for an Enterprise Fund.A) Cash Flows from Operating ActivitiesB) Cash Flows from Noncapital Financing ActivitiesC) Cash Flows from Capital and Related Financing ActivitiesD) Cash Flows from Investing Activities

Q: Proceeds from bonds issued for the construction of capital assets are classified on the Statement of Cash Flows for an Enterprise Fund asA) Cash Flows from Operating Activities.B) Cash Flows from Noncapital Financing Activities.C) Cash Flows from Capital and Related Financing Activities.D) Cash Flows from Investing Activities.

Q: On the Statement of Net Assets, in place of stockholders' equity, proprietary funds reportA) Retained Earnings only.B) Restricted Cash only.C) Unrestricted Cash only.D) Net Assets.

Q: Platinum City collects state sales taxes quarterly from local businesses and then gives the state revenue department the money at the end of the year. The sales taxes would go in Platinum City'sA) special revenue fund.B) general fund.C) agency fund.D) enterprise fund.

Q: What basis of accounting is used by fiduciary funds?A) Modified accrual accountingB) Accrual accountingC) Cash basis accountingD) Present value accounting

Q: What is a significant difference for agency funds when compared to governmental funds?A) An agency fund has a separate ledger.B) An agency fund does not report revenues.C) Agency funds are not associated with any governmental unit.D) An agency fund will not balance because there is no fund balance account.

Q: At December 31, 2011, an Enterprise Fund has the following adjusted accounts outstanding:Insurance Expense $2,000Depreciation Expense 3,000Supplies Expense 10,000Salaries Expense 100,000Service Revenues 123,000When preparing the closing entry for the temporary accounts at December 31, 2011, the Enterprise Fund's accountant willA) credit Retained Earnings $8,000.B) credit Net Cash, $8,000.C) credit Net Assets, Unrestricted $8,000.D) credit Invested Capital Assets, Net of Related Debt, $8,000.

Q: An enterprise fund collects $100,000 cash for customer deposits to insure timely payment for services. What journal entry did the enterprise fund prepare?A) Debit Cash $100,000, credit Revenue $100,000B) Debit Cash $100,000, credit Deferred Revenue $100,000C) Debit Restricted Cash $100,000, credit Customer Deposits $100,000D) Debit Restricted Cash $100,000, credit Revenue $100,000

Q: GASB requires ________ method(s) for the cash flow statement for proprietary funds.A) the reconciliationB) the indirectC) the directD) either the direct or indirect

Q: The financial statements of proprietary funds are similar to business enterprises with the exception that proprietary funds do notA) report fixed assets.B) report property taxes.C) separate current and noncurrent assets.D) report noncurrent liabilities.

Q: The unadjusted trial balance for the general fund of the City of Jordan at June 30, 2011 is as follows:DebitsAccounts receivable $ 90,000Cash 110,000Due from agency fund 19,000Encumbrances 18,000Estimated revenues 1,250,000Expenditures 1,090,000Taxes receivable 175,000CreditsAllowance for doubtful accounts 15,000Allowance for uncollectible taxes 35,000Appropriations 1,180,000Due to internal service fund 51,000Fund balance - unassigned 52,000Reserve for encumbrances 18,000Revenues 1,130,000Taxes received in advance 22,000Vouchers payable 249,000Supplies on hand at June 30, 2011 totaled $17,000. The $18,000 encumbrance relates to equipment ordered but not received by fiscal year-end.Required:Prepare a balance sheet for the general fund of the City of Jordan at June 30, 2011.

Q: The following information regarding the fiscal year ended September 30, 2011, was drawn from the accounts and records of the Mayberry County general fund:Revenues and other asset inflows:Taxes $ 12,000,000Licenses and permits 2,500,000Intergovernmental revenues 1,000,000Capital lease for fixed asset 1,200,000Receipt of cash from terminated fund 1,800,000Expenditures and other asset outflows:General government expenditures 7,500,000Public safety expenditures 2,000,000Judicial system expenditures 1,200,000Health and welfare expenditures 1,750,000Equipment purchases 750,000Payment to debt service fund to cover future debtservice on general government bonds 500,000Total fund balance, October 1, 2010 $ 3,000,000Required:Prepare a statement of revenues, expenditures, and changes in fund balance for the Mayberry County general fund for the year ended September 30, 2011.

Q: Address the following situations separately.1. For the budgetary year beginning July 1, 2011, Coastal City expected the following cash flow resources:Property taxes, licenses, and fees $3,000,000Proceeds of debt issue 1,000,000Interfund transfers to debt service fund 750,000In the budgetary entry, what amount did Coastal City record for estimated revenues?2. During the fiscal year ended June 30, 2011, Western County issued purchase orders totaling $7,000,000. Western County received $6,500,000 of invoiced goods at the encumbered amounts and paid $6,100,000 toward them before year-end.How much were Western County's encumbrances on July 1, 2011?3. The following information pertains to property taxes levied ($1,035,000 total) by Southern Township for the calendar year 2011:Expected collections during 2011 $750,000Expected collections in first 60 days of 2012 200,000Expected collections during the remainder of 2012 50,000Expected collections during January 2013 30,000Estimated to be uncollectible 5,000What amount did Southern Township report for property tax revenues in 2011?4. The following information pertains to Northern City's general fund for 2011:Expenditures 5,500,000Other financing sources 1,000,000Other financing uses 3,000,000Revenues 9,000,000At what amount will Northern City's total fund balance increase (decrease) in 2011?

Q: Middlefield County incurred the following transactions during 2011:1. The county authorized a new general obligation bond issue of $5 million par to construct an office building with a contract price of $4,975,000. The bonds were issued for $4,980,000.2. The county levied real property taxes of $10,000,000. Eighty-five percent of the net taxes were collected immediately. Two percent of the total levy was estimated to be uncollectible.3. The office building was completed and the county paid the contract price to the contractor.4. The General Fund transferred $500,000 to the Debt Service Fund.5. The county paid $200,000 for interest on the bonds from the Debt Service Fund.Required:Prepare journal entries for each of the above transactions. Identify the appropriate fund or funds used by Middlefield County.

Q: Peking County incurred the following transactions during 2011:1. Marketable securities were donated to support the county's bike and nature trails. The donor acquired the securities for $35,000 ten years earlier; however, their current market value was $200,000. The donor specified that all income from the securities be used for the trails. The principal is to be held intact for an indefinite period of time.2. Computer equipment was ordered for general fund departments. The estimated cost was $48,000.3. The county received the computer equipment. The actual cost was $47,750, of which $42,000 was paid to the vendor before year-end.4. The county sold a (general government) dump truck that originally cost $55,000. The county sold the truck at auction for $3,300. The book value of the truck at the time of sale was $0.5. The government leased equipment for the general government under a capital lease agreement. The present value of the minimum lease payments was $120,000. The county made an initial down payment of $10,000.Required:Prepare journal entries for each of the above transactions. Identify the appropriate fund or funds used by Peking County.

Q: The trial balance for the General Fund for Golden City held the following balances at June 30, 2011, just before closing entries were made:Due from other funds $ 2,700Fund balance - unassigned 51,000Estimated revenues 208,000Revenues 198,900Appropriations 196,500Expenditures - current year 193,800Expenditures - prior year 4,500Other Financing Sources - Transfer from Debt Service Fund 6,000Required:Prepare the necessary closing entries.

Q: The general fund trial balance for Lakeview City held the following balances at September 30, 2011, just before closing entries were made:Due from other funds $ 8,000Fund balance - unassigned 50,000Estimated revenues 180,000Revenues 177,000Appropriations 176,000Expenditures - current year 169,000Expenditures - prior year 16,000Other financing sources - transfer in from Capital Projects Fund 62,000Required:Prepare the necessary closing entries for the General Fund

Q: Prepare journal entries to record the following grant-related transactions for a municipality special revenue fund.1. Special Revenue Fund awarded an operating grant from the state, $2,500,000 (cash will be received after qualified expenditures are made).2. Special Revenue Fund received funds of $1,600,000, temporarily transferred from the General Fund.3. Incurred qualifying expenditures on the state grant program of $1,600,000 and paid them with funds temporarily transferred from the General Fund.4. Received a federal grant to finance planting of trees in city, $4,500,000 (cash received in advance).5. Incurred and paid cost of $3,000,000 for planting 10,000 trees in city.

Q: 1. Urban City issued $6 million of general obligation bonds at par to finance the construction of a city building. The bonds are 6%, 10-year bonds, and interest is paid on June 30 and December 31. 2. The city transferred $3,600,000 from its General Fund to its Debt Service Fund to provide a portion of the resources needed to service the bonds. 3. The city paid the first interest payment to the bondholders. Required:Prepare journal entries for each of the above transactions. Identify the appropriate fund or funds used by the city of Urban.

Q: The City of Attross entered the following transactions during 2011: 1. The city authorized a bond issue of $2,500,000 par to finance construction of a fountain and pavilion in the city square. The bonds were issued for $2,560,000. The premium was transferred to the fund for which the debt will be serviced. (This was a nonreciprocal transfer.) 2. The city entered into a contract for construction of the fountain at an estimated cost of $2,425,000. 3. The city received and paid a bill for $2,445,000 from the contractor upon completion of and approval of the fountain. 4. The unused bond proceeds were set aside for debt service on the bonds. Accordingly, those resources were paid to the appropriate fund(nonreciprocal). Required:Prepare journal entries for each of the above transactions. Identify the appropriate fund or funds used by Attross.

Q: For each of the following transactions relating to the startup of a community pool, determine the fund(s) being affected and prepare the appropriate journal entry for each. Be sure to note the fund type with each journal entry prepared. 1. General obligation bonds are issued at face value of $500,000 to construct a new community pool. 2. Cash of $100,000 is received from a state grant. Grant is set up to support the construction of the community pool. 3. A community fund-raiser by a citizens' group raises $50,000 which is donated to the pool fund, with the restriction placed on it that only earnings are to be used for lifeguard wages, and the principal may not be used until such time as the pool ceases to operate, at which time the principal will revert to the general fund. 4. Construction is completed and the contractors invoices received, totaling $578,000. The invoices are paid within 60 days. 5. The balance of funds from the general obligation bonds and state grant that was not used is transferred to the General Fund.

Q: The City of Electri entered the following transactions during 2011: 1. Borrowed $120,000 for a six-month term, to be paid upon receipt of property tax payments which were previously billed. 2. Used the funds borrowed to purchase a new fire truck. The truck is expected to have a 15-year useful life, and a $5,000 residual value. 3. Received $90,000 cash from a state grant. Funds are restricted for the purchase of a second fire truck. 4. Used the grant funds received to purchase a second fire truck. The truck is expected to have a 15-year useful life, and a $5,000 residual value. 5. Nonreciprocal transfer of $50,000 to the Debt Service Fund to be used toward repayment of the note. Required:Prepare the journal entries in the General Fund for the transactions.

Q: Old West City had the following transactions in fiscal 2011. Assume that all expenditures were properly appropriated in the fiscal 2011 budget.1. A six-month loan was made to the special revenue fund from the general fund amounting to $28,000.2. A purchase order for landscaping maintenance services was issued in the amount of $43,000.3. A $10,000 nonreciprocal transfer was made to the debt service fund to pay interest amounts outstanding.4. The final invoice for landscaping maintenance was received in the amount of $39,000, and it was scheduled to be paid in 30 days.5. The city enters into a capital lease of fixed assets for the general government. The present value of the minimum lease payments equals $70,000.Required:Prepare the journal entries for the General Fund.

Q: Bounty County had the following transactions in 2011.1. The budget for the county was approved, showing estimated revenues of $320,000 from local income taxes, and total estimated expenditures of $316,000.2. Tax bills were mailed amounting to $326,000, which are due in 60 days. All but 2% was expected to be collectible.3. Taxes collected prior to the due date amounted to $260,800. The balance was delinquent.4. $4,200 of taxes due were determined to be uncollectible and written off.5. The year-end books were closed, with the expectation that the remaining taxes due would be collected evenly over the first two months after the fiscal year end.Required:Prepare the journal entries for the General Fund for the transactions.

Q: A pre-closing trial balance included the following account balances for Simpli City:Due from other funds $ 3,500Fund balance - unassigned 14,000Estimated revenues 20,000Revenues 22,000Appropriations 18,000Expenditures - current year 19,000Expenditures - prior year 1,500Other Financing Source - Nonreciprocal transfer in 1,000Required:Prepare the necessary closing entries for the General Fund.

Q: Carson County had the following transactions for their General Fund relating to the levy and collection of property taxes.1. Property tax bills for $1,000,000 are sent to property tax owners. Taxes are due in 45 days. History shows that Carson County should expect 1.5% of the property taxes to be uncollectible.2. $850,000 in property taxes is collected. The remaining receivables are past due.3. An additional $80,000 of the delinquent taxes is collected.4. Wrote off $10,000 of delinquent taxes determined to be uncollectible.Required:Prepare the journal entries in the General Fund for the transactions.

Q: Goodwill County had the following transactions for their General Fund in the first month of their fiscal 2012 year, which ends June 30, 2012.1. The budget was approved, with $1,200,000 expected from property taxes, and another $5,000,000 expected from sales taxes. The budget showed these funds were expected to be spent on Salaries and Wages, $3,100,000; Utilities, $1,800,000; Rent, $900,000; and Supplies, $200,000.2. Supplies were ordered in the amount of $33,000.3. The electric bill was paid upon receipt in the amount of $75,000.4. Property taxes were billed in the amount of $1,200,000, due on December 31. Bad debts are estimated at 1% of receivables.5. Supplies were received, but the invoice amount was $35,000 and will be paid in 35 days. Supplies are used quickly and are not inventoried.6. Property tax payments were received amounting to $100,000.7. Payment was received from merchants for sales tax collections amounting to $400,000.Required:Prepare the journal entries for the General Fund that would be required for these transactions.

Q: Match the following fund balance descriptions for a General Fund with the proper classification for a fund balance. Each classification may be used more than once.A. Nonspendable Fund BalanceB. Restricted Fund BalanceC. Committed Fund BalanceD. Assigned Fund BalanceE. Unassigned Fund Balance_____1. Amounts can only be spent for the specific purposes determined by a formal action of the government's highest level of decision-making authority._____2. Amounts can only be spent for the specific purposes stipulated by constitution, external resource provider or enabling legislation._____3. Residual classification of funds for the General Fund._____4. Dollar amount of Ending Inventory._____5. Amounts intended to be used by the government for specific purposes but do not meet the criteria of restricted or committed._____6. Dollar amount of endowment principal

Q: Which statement below is incorrect with respect to the Government-wide financial statements?A) All governmental fund categories must convert to the modified accrual basis of accounting.B) It is necessary to eliminate interfund balances within the governmental funds.C) Capital lease liabilities associated with governmental funds must be included on the Government-wide financial statements.D) All fixed assets and long-term debt for governmental funds must be included on the Government-wide financial statements.

Q: A Capital Projects Fund awards the construction of a building to a construction contractor at a contract cost of $1,000,000. What entry is prepared by the Capital Projects Fund?A) Debit Expenditures $1,000,000, Credit Liability $1,000,000B) Debit Building $1,000,000, Credit Expenditures $1,000,000C) Debit Other Financing Uses $1,000,000, Credit Expenditures $1,000,000D) Debit Encumbrances $1,000,000, Credit Reserve for Encumbrances $1,000,000

Q: The Deferred Revenue account in government accounting is frequently used forA) taxes billed that are not expected to be collected within 60 days of the fiscal year end.B) taxes billed that are not expected to be collected based on a bad debt percentage history.C) taxes that are to be remitted from another government agency in the second month before the fiscal year end.D) taxes that are to be remitted from another government agency in the first month after the fiscal year end.

Q: Assume you are preparing journal entries for the General Fund. What account should be debited when office supplies are ordered?A) AppropriationsB) EncumbrancesC) ExpendituresD) Other financing use

Q: Which of the following funds has similar accounting and reporting to the special revenue fund?A) The proprietary fundB) The trust fundC) The general fundD) The agency fund

Q: Taxes which were billed, but are not paid by the due date, require which of the following entries at the fiscal close?A) Debit Taxes Receivable - DelinquentB) Debit Allowance for Uncollectible Taxes - DelinquentC) Credit Taxes Receivable - DelinquentD) Credit Allowance for Uncollectible Taxes - Current

Q: At any point in time, a government will be able to spend an amount equal toA) appropriations minus expenditures.B) appropriations minus expenditures minus encumbrances.C) appropriations minus encumbrances.D) expenditures minus encumbrances.

Q: Which of the following represents the recording of a budget in the accounts of the General Fund?A) Debit Appropriations, Credit Estimated Revenues and Credit Fund Balance - UnassignedB) Debit Appropriations, Credit Estimated RevenuesC) Debit Estimated Revenues, Credit Appropriations, Credit Estimated Other Financing Uses, Credit Fund Balance - UnassignedD) Debit Estimated Other Financing Uses, Credit Appropriations and Credit Fund Balance - Unassigned

Q: Governments must record a liability for uncollected taxes instead of revenues for uncollected taxes if the taxes are going to be collectedA) 30 days after the fiscal year end.B) 45 days after the fiscal year end.C) 60 days after the fiscal year end.D) 120 days after the fiscal year end.

Q: The proper sequence of events isA) purchase order, appropriation, encumbrance, expenditure.B) purchase order, encumbrance, expenditure, appropriation.C) appropriation, encumbrance, purchase order, expenditure.D) appropriation, purchase order, encumbrance, expenditure.

Q: Use the following information to answer the question(s) below.The town of Mayberry receives a gift of $500,000 in bonds. The contributor instructs that the principal should remain intact, but the annual interest income of $50,000 can be used for the maintenance of the zoo animals.When the interest income of $50,000 is received, what account should be credited?A) Other Financing SourcesB) Other Financing UsesC) Deferred RevenueD) Revenue

Q: What statements are required for Government-wide financial statements?A) Statement of Cash Flows and Balance SheetB) Statement of Cash Flows and Statement of Net AssetsC) Statement of Net Assets and Statement of ActivitiesD) Operating Statement and Balance Sheet

Q: The General Fund transfers $50,000 cash to the Debt Service Fund to meet annual interest payments. What entry did the Debt Service Fund prepare?A) Debit Cash $50,000, Credit Revenue $50,000B) Debit Cash $50,000, Credit Other Financing Sources-Transfer from General Fund $50,000C) Debit Encumbrance $50,000, Credit Due to General Fund $50,000D) Debit Appropriation $50,000, Credit Reserve for Encumbrance $50,000

Q: The proceeds from a bond issuance for the construction of a new public school should be recorded in the ________ fund at the time the bonds are sold. At the time of the bond issue, the debit is to cash and the credit is to ________.A) capital projects; revenuesB) general; bonds payableC) general; other financing sourcesD) capital projects; other financing sources

Q: When a city enters into a capital lease for a fixed asset for the general government,A) government-wide statements will report an Encumbrance for the leased asset.B) government-wide statements will report the liability, Capital Lease Obligation.C) governmental fund statements will report a fixed asset.D) governmental fund statements will report a liability, Capital Lease Obligation.

Q: When recording an approved budget into the accounts of the general fund, which of the following accounts would be credited?A) AppropriationsB) EncumbrancesC) Estimated revenuesD) Deferred revenues

Q: The estimated revenues control account of Metro City's general fund is created whenA) the city's tax receipts are measurable and available.B) the budget is recorded in the accounting records.C) encumbrances are made.D) taxes are levied and bills are mailed.

Q: When a capital lease is used to lease fixed assets for the general government, the governmental fund acquiring the fixed assets debits ________ at the ________.A) expenditures; future value of the minimum lease paymentsB) fixed assets; future value of the minimum lease paymentsC) expenditures, present value of the minimum lease paymentsD) fixed assets; present value of the minimum lease payments

Q: The following are transactions for the city of Salem.a. Incurred salaries of $44,000 to be paid next month.b. Tax bills totaling $500,000 mailed to city residents.c. Paid salaries above.d. Computer equipment received in the amount of $11,000, to be paid in 30 days.Required:Analyze the above transactions by using the accounting equation for a proprietary fund.

Q: Match the following definitions to the appropriate government accounting terms (numbered below).A. Legally separate organization for which primary government is financially accountableB. The use of governmental fund working capitalC. Appropriation for a specific time periodD. Governmental and Proprietary fund revenues and expenses presented using full accrual accountingE. Approved or authorized expendituresF. Revenues recognized when available to meet current obligationsG. Self-balancing set of accountsH. Each state government and each general-purpose local governmentI. The responsibility to demonstrate compliance with public decisions with regard to the use of financial resourcesJ. Governmental and Internal Service Funds assets and liabilities presented together_____1. Modified Accrual Basis_____2. Fund_____3. Primary Government_____4. Appropriation_____5. Statement of Net Assets_____6. Fiscal Accountability_____7. Allotment_____8. Component Unit_____9. Statement of Activities_____10. Expenditures

Q: Using the revenue types shown below, match each of the revenue sources to a revenue type. Each revenue type may be used more than once.A. Derived Tax RevenuesB. Imposed Nonexchange RevenuesC. Government-Mandated Nonexchange TransactionsD. Voluntary Nonexchange Transactions_____1. Corporate income tax_____2. Sales taxes_____3. Liquor taxes_____4. Fines and penalties paid to a government entity_____5. Cigarette taxes_____6. Personal income tax_____7. Donation made to a government entity_____8. Motor fuel tax_____9. Property tax

Q: The following are transactions for the city of Greenville.a. Issued $50,000 10-year bonds.b. Used $30,000 of the cash to buy a truck.c. Sold the truck that was replaced which had cost $28,000, for $2,000. The old truck was fully depreciated. Residual value is zero.d. Computed depreciation on the new truck for the year of $6,000.Required:Analyze the above transactions by using the accounting equation for a proprietary fund.

Q: The following are transactions for the city of Clinton.a. Borrowed $100,000 by issuing a one-year, 5% note, three months before year-end.b. Accrued interest at year end, but did not pay the interest at year end.c. Charges for services rendered of $2,500 were billed and collected immediately.d. Incurred salary costs of $5,000, unpaid.Required:Analyze the above transactions by using the accounting equation for a proprietary fund.

Q: For each of the following events or transactions, identify the type of fund(s) that will be affected.1. A central purchasing department was established to handle all the purchasing needs of a county government.2. A county government levies sales taxes restricted as to use for job creation.3. A county government receives a large contribution specifying that income from the contribution be distributed each year to the county zoo. The principal is to remain intact indefinitely.4. A city government paid construction costs of $12,000 on city hall building.5. A city government paid general operating costs.

Q: For each of the following events or transactions, identify the fund or funds that will be affected.1.A city government charges a fee for the use of the municipal golf course.2. Interest is paid on state government revenue bonds.3. A motor pool was established to handle the vehicle needs of a county government.4. Paid salaries for general governmental employees.5. Accrued salaries for general governmental employees.

Q: The following are transactions for the city of Franklin.a. Borrowed $20,000 by issuing a two-year note.b. Purchased equipment for $6,000 cash.c. Licenses for $700 were billed on account.d. Accrued employee salary costs of $7,000.e. Depreciation expense on equipment for year, $1,000.Required:Analyze the above transactions by using the accounting equation for a proprietary fund.

Q: The following are transactions for the city of Springfield.a. Borrowed $20,000 by issuing a three-month, 5% note.b. Paid $4,000 for equipment.c. Services for $1,000 were billed and collected.d. Year-end accrual of 3 months interest on note in (a).Required:Analyze the above transactions by using the accounting equation for a proprietary fund.

Q: For each of the following transactions that could be introduced to fund the maintenance of the city park, state the type of fund(s) that would be affected. Assume that a capital project fund will be used to handle any long-term improvements or additions to the park.1. Resources used to make 60 monthly installments on outstanding long-term debt.2. Implemented a tax on alcohol purchases specifically designated for the park upkeep.3. A local sports organization that uses the park raises funds and donates the money, stating that the principal may not be spent, but designating earnings to the park upkeep.4. City council approves the funds from existing resources for the upkeep required in the upcoming year.5. Resources used only to pay principal and interest of debt outstanding to finance park maintenance.

Q: Identify the fund type of the fund being described.1. A fund used to account for the external portion of investment pools reported by the sponsoring government.2. A fund used to account for resources that are legally restricted to use of the earnings only for government programs or activities.3. A fund used to account for resources used to pay for a new stadium.4. A fund used to account for local taxes withheld on behalf of another county.5. A fund used to account for resources used to pay interest on a long-term bond issue.6. A fund used to account for specific revenues that are restricted in use.7. A fund used to account for the local swimming pool that is owned by the city and used by residents for a membership fee.8. A fund used to account for the centralized data processing services of the state government.9. A fund used to account for all funds except those required to be accounted for in another fund.10. A fund that accounts for government pension plans if the government is the trustee