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| 1 | |
When a city signs a capital lease, which of the following entries would be made? |
| | A) | For government-wide financial statements, debit Encumbrances. |
| | B) | For fund-based financial statements, credit Expenditures – Leased Asset. |
| | C) | For fund-based financial statements, credit Capital Lease Obligation. |
| | D) | For government-wide financial statements, credit Capital Lease Obligation. |
| | E) | For fund-based financial statements, debit an Asset account. |
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| 2 | |
When a city establishes a new landfill, which of the following entries would be made? |
| | A) | At the time of establishing the landfill, for government-wide financial statements, credit a Liability for the cost of closing the landfill. |
| | B) | At the end of each period, for government-wide financial statements, credit a Liability for a pro-rata share of the cost of closing the landfill. |
| | C) | At the time of establishing the landfill, for fund-based financial statements, credit a Liability for the cost of closing the landfill. |
| | D) | At the end of each period, for fund-based financial statements, credit a Liability for a pro-rata share of the cost of closing the landfill. |
| | E) | For government-wide financial statements, no entry is ever made until the cost is actually paid. |
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| 3 | |
If Dayglow, a midwestern town, receives a priceless Van Gogh painting for display in the town hall, how should the gift be recorded? |
| | A) | For government-wide financial statements, a credit is made to a fiduciary trust fund. |
| | B) | For fund-based financial statements, a credit is made to a fiduciary trust fund. |
| | C) | For government-wide financial statements, a credit is made to a Revenue account. |
| | D) | For fund-based financial statements, a credit is made to a Revenue account. |
| | E) | Such a donation is never recorded, because it is not considered as an available financial resource. |
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| 4 | |
The financial statements of public colleges and universities: |
| | A) | Should look just like the financial statements of private colleges and universities for comparison purposes. |
| | B) | Must include a Management Discussion and Analysis. |
| | C) | Exclude the notes to financial statements. |
| | D) | Must include only fund-based financial statements. |
| | E) | Include only Government-Wide Statement of Revenues, Expenditures and Changes in Fund Balance. |
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| 5 | |
Which of the following is not a CAFR requirement related to government-wide financial statements and governmental funds -- fund-based financial statements? |
| | A) | Statement of Net Assets |
| | B) | Statement of Revenues, Expenditures, and Changes in Fund Balance |
| | C) | Statement of Activities |
| | D) | Statement of Cash Flows |
| | E) | All of the above are requirements |
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| 6 | |
Which item below is one of the criteria used to define a primary governmental unit? |
| | A) | The unit must be fiscally dependent on a separate governmental unit. |
| | B) | The unit must derive the majority of its revenues from its own local tax base. |
| | C) | The unit must be fiscally independent of other state and local governments. |
| | D) | The unit must not manage fiduciary funds. |
| | E) | The unit must qualify for the modified approach to accounting for depreciation. |
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| 7 | |
Which of the following is not required in the CAFR? |
| | A) | Auditor's Report |
| | B) | General Purpose Financial Statements |
| | C) | Combining Statements by Fund Type |
| | D) | Individual Fund Statements |
| | E) | Schedules and Statistical Tables |
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| 8 | |
Which of the following is not a section that is included in the Statement of Cash Flows for Proprietary Funds? |
| | A) | Cash flows from Operating Activities |
| | B) | Cash flows from Noncapital Financing Activities |
| | C) | Cash flows from Investing Activities |
| | D) | Cash flows from Capital and Related Financing Activities |
| | E) | Cash flows from External Sources |
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| 9 | |
On fund-based financial statements, the costs of operating a solid waste landfill are: |
| | A) | Accrued on a pro-rated basis for each period based on the estimated costs. |
| | B) | Accrued and amortized over the expected useful life of the landfill. |
| | C) | Accrued in full when the costs can be estimated. |
| | D) | Treated as an encumbrance at the time costs can be estimated and as an expenditure when the costs are actually paid. |
| | E) | Not recognized until the government spends the costs. |
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| 10 | |
In the Fund-Based Statements, how would a governmental unit record the donation of a Van Gogh painting for display in City Hall? |
| | A) | Record the painting at historical cost in the General Fund. |
| | B) | Record the painting at market value in the General Fund. |
| | C) | Don't record the painting at all. |
| | D) | Record the painting at market value in the Fiduciary Fund. |
| | E) | Record the painting at historical cost in the Fiduciary Fund. |
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| 11 | |
When state and local governments incur a liability for compensated absences such as vacation days, sick leave days, or holidays, the governmental entity would record: |
| | A) | Debit Expenditures for compensated absences for government-wide financial statements for the estimated liability. |
| | B) | Debit Expenses for compensated absences for government-wide financial statements for the estimated liability. |
| | C) | Debit Expenses for compensated absences for fund-based financial statements for the actual amount paid. |
| | D) | Debit Expenditures for compensated absences for government-wide financial statements for the actual amount paid. |
| | E) | No entry is recorded. |
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| 12 | |
According to GASB Statement 34, infrastructure assets are: |
| | A) | Recorded as assets only when built for both government-wide and fund-based financial statements. |
| | B) | Recorded as assets when constructed as well as assets acquired after June 30, 1980 for both government-wide and fund-based financial statements. |
| | C) | Recorded as assets only when built for government-wide financial statements. |
| | D) | Recorded as assets when constructed as well as assets acquired after June 30, 1980 for government-wide financial statements. |
| | E) | Omitted from government-wide statements because valuation is too costly and complex. |
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| 13 | |
Management Discussion and Analysis section is: |
| | A) | An optional reporting requirement of governmental financial statements that GASB strongly encourages governmental entities to use. |
| | B) | Replaces the comprehensive annual financial report (CAFR). |
| | C) | Provides an objective and easily readable analysis of the government's financial activities. |
| | D) | Appears at the end of the financial report. |
| | E) | Addresses only the fund-based financial statements. |
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| 14 | |
Fund-based financial statements include: |
| | A) | Statement of Net Assets and Statement of Activities. |
| | B) | Statement of Activities and Statement of Cash Flows. |
| | C) | Statement of Revenues, Expenses and Changes in Net Assets. |
| | D) | Statement of Revenues, Expenditures, and Changes in Fund Balances. |
| | E) | All of the above. |
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| 15 | |
Depreciation of art and historical treasures: |
| | A) | must be recorded for all works of art and historical treasures that are capitalized unless they are viewed as inexhaustible. |
| | B) | must be recorded for all works of art and historical treasures that are capitalized. |
| | C) | must be recorded for only works of art and historical treasures that are purchased unless they are viewed as inexhaustible. |
| | D) | must be recorded for only works of art and historical treasures that are purchased and not any donated items. |
| | E) | would not be recorded because these items are always considered inexhaustible. |
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