When a capital lease is used to lease fixed assets for the general government, the governmental fund acquiring the fixed assets debits ________ at the ________.
33) 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 lease payments
- B) fixed assets; future value of the lease payments
- C) expenditures; present value of the lease payments
- D) fixed assets; present value of the lease payments
34) When recording an approved budget into the accounts of the general fund, which of the following accounts would be credited?
- A) Appropriations
- B) Encumbrances
- C) Estimated revenues
- D) Revenue collected in advance
35) When a city enters into a capital lease for a fixed asset for the general government,
- A) government-wide statements will report the asset and liability for the leased asset.
- B) government-wide statements will not 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.
36) 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; revenues
- B) general; bonds payable
- C) general; other financing sources
- D) capital projects; other financing sources
37) 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 $50,000
- B) Debit Cash $50,000, Credit Other Financing Sources-Transfer from General Fund $50,000
- C) Debit Encumbrance $50,000, Credit Due to General Fund $50,000
- D) Debit Appropriation $50,000, Credit Reserve for Encumbrance $50,000
38) What statements are required for Government-wide financial statements?
- A) Statement of Cash Flows and Balance Sheet
- B) Statement of Cash Flows and Statement of Net Assets
- C) Statement of Net Position and Statement of Activities
- D) Operating Statement and Balance Sheet
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.
39) What type of fund should be used to account for the gift of bonds and the interest income?
- A) General Fund
- B) Special Revenue Fund
- C) Proprietary Fund
- D) Permanent Fund
40) When the donation of bonds is received, what account should be debited?
- A) Encumbrance
- B) Other Financing Sources
- C) Other Financing Uses
- D) Investment
Answer: D
Objective: LO20.3 Determine the appropriate governmental fund to be used.
Difficulty: Easy
AACSB: Analytical thinking
41) When the interest income of $50,000 is received, what account should be credited?
A) Other Financing Sources
B) Other Financing Uses
C) Revenue collected in advance
D) Revenue
42) The proper sequence of events is
- A) purchase order, appropriation, encumbrance, expenditure.
- B) purchase order, encumbrance, expenditure, appropriation.
- C) appropriation, encumbrance, purchase order, expenditure.
- D) appropriation, purchase order, encumbrance, expenditure.
43) Governments must record a liability for uncollected taxes instead of revenues for uncollected taxes if the taxes are going to be collected
- A) 30 days after the fiscal year end.
- B) 45 days after the fiscal year end.
- C) 60 days after the fiscal year end.
- D) 75 days after the fiscal year end.
44) 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 - Unassigned
- B) Debit Appropriations, Credit Estimated Revenues
- C) Debit Estimated Revenues, Credit Appropriations, Credit Estimated Other Financing Uses, Credit Fund Balance - Unassigned
- D) Debit Estimated Other Financing Uses, Credit Appropriations and Credit Fund Balance - Unassigned
45) At any point in time, a government will be able to spend an amount equal to
- A) appropriations minus expenditures.
- B) appropriations minus expenditures minus encumbrances.
- C) appropriations minus encumbrances.
- D) expenditures minus encumbrances.
46) 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 - Delinquent
- B) Debit Allowance for Uncollectible Taxes - Delinquent
- C) Credit Taxes Receivable - Delinquent
- D) Credit Allowance for Uncollectible Taxes - Current
47) Which of the following funds has similar accounting and reporting to the special revenue fund?
- A) The proprietary fund
- B) The trust fund
- C) The general fund
- D) The agency fund
48) Assume you are preparing
- A) Appropriations
- B) Encumbrances
- C) Expenditures
- D) Other financing use
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