g0v7 4cct6 Flashcards
(142 cards)
1
Q
The statement of activities of the government-wide financial statements is designed primarily to provide information to assess which of the following?
A.
Operational accountability.
B.
Financial accountability.
C.
Fiscal accountability.
D.
Functional accountability.
A
A.
Operational accountability.
2
Q
A government-wide statement of net position must include which of the following?
A.
Prior-year comparative financial data
B.
Primary government fiduciary fund data
C.
A consolidation of all government-wide activities
D.
A distinction between governmental and business-type activities
A
D.
A distinction between governmental and business-type activities
3
Q
Nox City reported a $25,000 net increase in the fund balances for total governmental funds. Nox also reported an increase in net assets for the following funds:
Motor pool internal service fund $9,000
Water enterprise fund $12,000
Employee pension fund $7,000
The motor pool internal service fund provides service to the general fund departments. What amount should Nox report as the change in net assets for governmental activities?
A.
$25,000
B.
$34,000
C.
$41,000
D.
$46,000
A
B.
$34,000
4
Q
Brandon County’s general fund had the following transactions during the year:
Transfer to a debt service fund $100,000
Payment to a pension trust fund $500,000
Purchase of equipment $300,000
What amount should Brandon County report for the general fund as other financing uses in its governmental funds statement of revenues, expenditures, and changes in fund balances?
A.
$100,000
B.
$400,000
C.
$800,000
D.
$900,000
A
A.
$100,000
5
Q
A state had general obligation bonds outstanding that required payment of interest on July 1 and January 1 of each year. State law allowed for the general fund to make debt payments without the use of a fiscal agent. The fiscal year ended June 30. Which of the following accounts would have decreased when the state paid the interest due on July 1?
A.
Interest expenditures.
B.
Interest payable.
C.
Interest expense.
D.
Fund balance.
A
D.
Fund balance.
6
Q
Which of the following is the paramount objective of financial reporting by state and local governments?
A.
Reliability.
B.
Consistency.
C.
Comparability.
D.
Accountability.
A
D.
Accountability.
7
Q
At the end of the fiscal year, a state government reported capital assets of $20 million, accumulated depreciation of $5 million, restricted assets of $3 million, and liabilities of $7 million. What amount should the government report as the total net position in its government-wide financial statements?
A.
$8 million
B.
$11 million.
C.
$15 million.
D.
$18 million.
A
B.
$11 million.
8
Q
Kenn City obtained a municipal landfill and passed a local ordinance that required the city to operate the landfill so that the costs of operating the landfill, as well as the capital costs, are to be recovered with charges to customers. Which of the following funds should Kenn City use to report the activities of the landfill?
A.
Enterprise.
B.
Permanent.
C.
Special revenue.
D.
Internal service.
A
A.
Enterprise.
9
Q
Which of the following funds of a local government would report transfers to other funds as an other financing use?
A.
Enterprise.
B.
Internal service.
C.
Pension trust.
D.
General.
A
D.
General.
10
Q
On January 1, Fonk City approved the following general fund resources for the new fiscal period:
Property taxes $5,000,000
Licenses and permits $400,000
Intergovernmental revenues $150,000
Transfers in from other funds $350,000
What amount should Fonk record as estimated revenues for the new fiscal year?
A.
$5,400,000
B.
$5,550,000
C.
$5,750,000
D.
$5,900,000
A
B.
$5,550,000
11
Q
Elm City issued a purchase order for supplies with an estimated cost of $5,000. When the supplies were received, the accompanying invoice indicated an actual price of $4,950. What amount should Elm debit (credit) to Budgetary Fund Balance - Reserved for Encumbrances after the supplies and invoice were received?
A.
($50)
B.
$50
C.
$4,950
D.
$5,000
A
D.
$5,000
12
Q
Powell City purchased a piece of equipment to be used by a department financed by the general fund. How should Powell report the acquisition in the general fund?
A.
As an expenditure.
B.
Capitalize, depreciation is optional.
C.
Capitalize, depreciation is required.
D.
Capitalize, depreciation is not permitted.
A
A.
As an expenditure.
13
Q
A city government reported a $9,000 increase in net position in the motor pool internal service fund, a $12,000 increase in net position in the water enterprise fund, and a $7,000 increase in the employee pension fund. The motor pool internal service fund provides service primarily to the police department. What amount should the city report as the change in net position for business-type activities in its statement of activities?
A.
$9,000
B.
$12,000
C.
$21,000
D.
$28,000
A
B.
$12,000
14
Q
Dayne County’s general fund had the following disbursements during the year:
Payment of principal on long-term debt $100,000
Payments to vendors $500,000
Purchase of a computer $300,000
What amount should Dayne County report as expenditures in its governmental funds statement of revenues, expenditures, and changes in fund balances?
A.
$300,000
B.
-$500,000
C.
$800,000
D.
$900,000
A
D.
$900,000
15
Q
On March 1, Wag City issued $1,000,000, ten-year, 6% general obligation bonds at par with no bond issue costs. The bonds pay interest September 1 and March 1. What amount of interest expense and bond interest payable should Wag report in its government-wide financial statements at the close of the fiscal year on December 31?
A.
Interest expense, $50,000; interest payable, $20,000.
B.
Interest expense, $50,000; interest payable, $0.
C.
Interest expense, $60,000; interest payable, $10,000.
D.
Interest expense, $30,000; interest payable, $0.
A
A.
Interest expense, $50,000; interest payable, $20,000.
16
Q
Which of the following is a minimum required report for the basic financial statements of a government entity?
A.
Fund financial statements.
B.
Management’s discussion and analysis.
C.
Required supplementary information.
D.
Budgetary comparison schedules.
A
A.
Fund financial statements.
17
Q
A city’s water enterprise fund received interest of $10,000 on long-term investments. How should this amount be reported on the Statement of Cash Flows?
A.
Operating activities.
B.
Noncapital financing activities.
C.
Capital and related financing activities.
D.
Investing activities.
A
D.
Investing activities.
18
Q
Several Bay City employees accepted a voluntary termination plan during year 1. The city will pay a set amount to the terminated employees as follows:
During year 1 20,000
End of year 2 30,000
End of year 3 15,000
The discounted present value of the payment for year 2 and year 3 is $42,000. What amount of expenditures should be reported in the governmental fund-level financial statements in year 1?
A.
$20,000
B.
$50,000
C.
$62,000
D.
$65,000
A
A.
$20,000
19
Q
Which of the following items is recognized for governmental activities in the government-wide statement of activities and not the statement of revenues, expenditures, and changes in fund balance for governmental funds?
A.
Transfers between governmental funds
B.
Property tax revenue for an amount deferred because it was not available
C.
A state grant awarded and received for road repairs that were completed this fiscal year
D.
Salaries payable at the end of the current year that will be paid at the beginning of the subsequent year
A
B.
Property tax revenue for an amount deferred because it was not available
20
Q
Assuming no outstanding encumbrances at year end, closing entries for which of the following situations would increase the unreserved fund balance at year end?
A.
Actual revenues were less than estimated revenues.
B.
Estimated revenues exceed actual appropriations.
C.
Actual expenditures exceed appropriations.
D.
Appropriations exceed actual expenditures.
A
D.
Appropriations exceed actual expenditures.
21
Q
How should a city’s general fund report the acquisition of a new police car in its governmental fund statement of revenues, expenditures and changes in fund balances?
A.
Noncurrent asset.
B.
Expenditure.
C.
Expense.
D.
Property, plant and equipment.
A
B.
Expenditure.
22
Q
A city taxes merchants for various central district improvements. Which of the following accounting methods assist(s) in assuring that these revenues are expended legally?
A.
Both fund accounting and budgetary accounting.
B.
Fund accounting, not budgetary accounting.
C.
Budgetary accounting, not fund accounting.
D.
Neither fund accounting nor budgetary accounting.
A
A.
Both fund accounting and budgetary accounting.
23
Q
s of December 31, 20X5, ABC city compiled the information below for its capital assets, exclusive of infrastructure assets.
Cost of capital assets financed with
general obligation debt and tax revenues $3,500,000
Accumulated depreciation on the capital assets $750,000
Outstanding debt related to the capital assets $1,250,000
On the government-wide statement of net position at December 31, 20X5, under the governmental activities column, the information related to capital assets should be reported in the net position section at which of the following amounts?
A.
$3,500,000
B.
$1,500,000
C.
$2,250,000
D.
$2,750,000
A
B.
$1,500,000
24
Q
The city accountant for a newly established municipality is setting up the new fund structure for the city’s accounting system. How many funds should the accountant establish for the city?
A.
Two, a general fund and a special revenue fund as required by GAAP.
B.
Two, a special revenue fund and a general fund as required by the city manager.
C.
The minimum number of funds consistent with the needs of the city accountant.
D.
The minimum number of funds consistent with legal requirements and sound financial administration.
A
D.
The minimum number of funds consistent with legal requirements and sound financial administration.
25
Ridge Township’s governing body adopted its general fund budget for the year ended July 31, 20X3, comprised of Estimated Revenues of $100,000 and Appropriations of $80,000. Ridge formally integrates its budget into the accounting records.
To record the $20,000 budgeted excess of estimated revenues over appropriations, Ridge should
A.
Credit Estimated Excess Revenues Control.
B.
Debit Estimated Excess Revenues Control.
C.
Credit Budgetary Fund Balance.
D.
Debit Budgetary Fund Balance.
C.
| Credit Budgetary Fund Balance.
26
A city government levies a tax on its citizens for improvements to roads. How should the city report the tax in its statement of activities?
A.
By type of tax in general revenues.
B.
By type of tax in program revenues.
C.
As program-specific contributions in program revenues.
D.
In special items reported separately from general revenue.
A.
| By type of tax in general revenues.
27
Lake County received the following proceeds that are legally restricted to expenditure for specified purposes:
Levies on affected property owners
to install sidewalks $500,000
Gasoline taxes to finance road repairs $900,000
What amount should be accounted for in Lake’s special revenue funds?
A.
$1,400,000
B.
$900,000
C.
$500,000
D.
$0
B.
| $900,000
28
King City Council will be establishing a library fund. Library fees are expected to cover 55% of the library’s annual resource requirements. King has decided that an annual determination of net income is desirable in order to maintain management control and accountability over the library. What type of fund should King establish in order to meet their measurement objectives?
A.
Special revenue fund.
B.
General fund.
C.
Internal service fund.
D.
Enterprise fund.
D.
| Enterprise fund.
29
The general fund of Cliff Township acquired two police cars at the beginning of January 20X3, at a total cost of $40,000. The cars are expected to last for four years and have a $10,000 residual value. Straight-line depreciation is used. Cliff adopted the provisions of governmental accounting standards, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, for its financial statements issued for 20X3.
On the statement of revenues, expenditures, and changes in fund balances prepared for the governmental funds for the year ended December 31, 20X3, the police cars will be reported as
A.
Expenditures of $40,000.
B.
Expense of $7,500
C.
Expenditures of $7,500
D.
Expense of $40,000
A.
| Expenditures of $40,000.
30
The measurement focus of governmental fund accounting is on which of the following?
A.
Current financial resources.
B.
Economic resources.
C.
Cash.
D.
Working capital.
A.
| Current financial resources.
31
Which of the following statements about the statistical section of the Comprehensive Annual Financial Report (CAFR) of a governmental unit is true?
A.
Statistical tables may not cover more than two fiscal years.
B.
Statistical tables may not include nonaccounting information.
C.
The statistical section is not part of the basic financial statements.
D.
The statistical section is an integral part of the basic financial statements.
C.
| The statistical section is not part of the basic financial statements.
32
The general fund of ABC city acquired two police cars at the beginning of January 20X3, at a total cost of $40,000. The cars are expected to last for four years and have a $10,000 residual value. Straight-line depreciation is used.
On the government-wide statement of net position at December 31, 20X3, the police cars will be reported under assets in the governmental activities column at which of the following amounts?
A.
$40,000
B.
$32,500
C.
$0
D.
$22,500
B.
| $32,500
33
Which of the following should be included in the introductory section of a local government's comprehensive annual financial report?
A.
Auditor’s report.
B.
Management letter.
C.
Engagement letter.
D.
Letter of transmittal.
D.
| Letter of transmittal.
34
A capital projects fund for a new city courthouse recorded a receivable of $300,000 for a state grant and a $450,000 transfer from the general fund. What amount should be reported as revenue by the capital projects fund?
A.
$0
B.
$300,000
C.
$450,000
D.
$750,000
B.
| $300,000
35
During the current year Knoxx County levied property taxes of $2,000,000, of which 1% is expected to be uncollectible. The following amounts were collected during the current year:
Prior year taxes collected within the 60 days of the current year $50,000
Prior year taxes collected between 60 and 90 days into the current year $120,000
Current year taxes collected in the current year $1,800,000
Current year taxes collected within the first 60 days of the subsequent year $80,000
What amount of property tax revenue should Knoxx County report in its entity-wide statement of activities?
A.
$1,800,000
B.
$1,970,000
C.
$1,980,000
D.
$2,000,000
C.
| $1,980,000
36
Which of the following information is needed to prepare the budgetary comparison schedules for a local government?
A.
Original budget.
B.
Explanation of variances.
C.
Description of the local government’s budgeting process.
D.
Computation of variances from budget to actual.
A.
| Original budget.
37
Carlson City's fiscal year ends December 31. On August 1, the city issued a purchase order for new vehicles to be delivered at the rate of two per month beginning October 15. Twelve vehicles were delivered as scheduled and payments of $264,000 were made upon delivery. If these were the only transactions made by the city, which of the following balances would appear on the balance sheet as of December 31?
A.
Encumbrances $132,000
Reserved for encumbrances $132,000
B.
Fund balances $132,000
Reserved for encumbrances $132,000
C.
Reserved for encumbrances $264,000
Fund balance $264,000
D.
Encumbrances $264,000
Reserved for encumbrances $264,000
B.
Fund balances $132,000
Reserved for encumbrances $132,000
38
Which format must an enterprise fund use to report cash flow operating activities in the statement of cash flows?
A.
Indirect method, beginning with operating income.
B.
Indirect method, beginning with change in net assets.
C.
Direct method.
D.
Either direct or indirect method.
C.
| Direct method.
39
Nack City received a donation of a valuable painting. Nack planned to add the painting to its collection and display it in the protected exhibition area of city hall. Nack had a policy that if such donated art works were sold, the proceeds would be used to acquire other items for its collections. Which of the following would be correct regarding the donated painting?
A.
Must be capitalized and depreciated.
B.
Must be capitalized but not depreciated.
C.
May be capitalized, but it is not required, and it must be depreciated.
D.
May be capitalized, but it is not required, and depreciation is not required.
D.
| May be capitalized, but it is not required, and depreciation is not required.
40
Encumbrances would not appear in which fund?
A.
Capital projects.
B.
Special revenue.
C.
General.
D.
Enterprise
D.
| Enterprise
41
Which event(s) should be included in a statement of cash flows for a governmental entity?
I. Cash inflow from issuing bonds to finance city hall construction.
II. Cash outflow from a city utility representing payments in lieu of property taxes.
A.
I only.
B.
II only.
C.
Both I and II.
D.
Neither I nor II.
B.
| II only.
42
Which of the following is a required part of a local government's management's discussion and analysis (MD&A) as part of its financial statements?
A.
The MD&A should be presented with other required supplementary information.
B.
The MD&A should compare current-year results to the prior year with emphasis on the current year.
C.
The MD&A should include an analysis for each fund.
D.
The MD&A should present condensed financial information from the fund financial statements.
B.
| The MD&A should compare current-year results to the prior year with emphasis on the current year.
43
Ridge Township’s governing body adopted its general fund budget for the year ended July 31, 20X3, comprised of Estimated Revenues of $100,000 and Appropriations of $80,000. Ridge formally integrates its budget into the accounting records.
To record the appropriations of $80,000, Ridge should
A.
Credit Appropriations Control.
B.
Debit Appropriations Control.
C.
Credit Estimated Expenditures Control.
D.
Debit Estimated Expenditures Control.
A.
| Credit Appropriations Control.
44
Which of the following funds should be reported as part of local government's governmental activities column in its government-wide statements?
A.
Debt service.
B.
Agency.
C.
Private-purpose trust.
D.
Pension trust.
A.
| Debt service.
45
Japes City issued $1,000,000 general obligation bonds at 101 to build a new city hall. As part of the bond issue, the city also paid a $500 underwriter fee and $2,000 in debt issue costs. What amount should Japes City report as other financing sources?
A.
$1,010,000
B.
$1,008,000
C.
$1,007,500
D.
$1,000,000
A.
| $1,010,000
46
A township billed residents for $120,000 in property taxes, 15% of which was expected to be uncollectible. Actual collections amounted to $106,000. What amount will be recognized as revenues for the period?
A.
$106,000
B.
$120,000
C.
Property taxes are recognized as other financing sources, not revenues.
D.
$102,000
A.
| $106,000
47
What is the measurement focus and the basis of accounting for the government-wide financial statements?
A.
Measurement focus: Current financial resources Basis of accounting: Modified accrual
B.
Measurement focus: Economic resources Basis of accounting: Modified accrual
C.
Measurement focus: Current financial resources Basis of accounting: Accrual
D.
Measurement focus: Economic resources Basis of accounting: Accrual
D.
| Measurement focus: Economic resources Basis of accounting: Accrual
48
In Soan County's general fund statement of revenues, expenditures, and changes in fund balances, which of the following has an effect on the excess of revenues over expenditures?
A.
Purchase of fixed assets.
B.
Payment to a debt-service fund.
C.
Special items.
D.
Proceeds from the sale of capital assets.
A.
| Purchase of fixed assets.
49
Financing for the renovation of Fir City’s municipal park, begun and completed during 20X3, came from the following sources:
Grant from state government $400,000
Proceeds from general obligation bond issue $500,000
Transfer from Fir’s general fund $100,000
In its 20X3 capital projects fund operating statement, Fir should report these amounts as
A.
$1,000,000 in revenues.
B.
$900,000 in revenues and $100,000 in other financing sources.
C.
$400,000 in revenues and $600,000 in other financing sources.
D.
$1,000,000 in other financing sources.
C.
| $400,000 in revenues and $600,000 in other financing sources.
50
A balance in the Reserved for Encumbrances in excess of a balance of Encumbrances indicates
A.
An excess of vouchers payable over encumbrances.
B.
An excess of purchase orders over invoices received.
C.
An excess of appropriations over encumbrances.
D.
A recording error.
D.
| A recording error.
51
Chase City uses an internal service fund for its central motor pool. The assets and liabilities account balances for this fund that are not eliminated normally should be reported in the government-wide statement of net assets as
A.
Governmental activities.
B.
Business-type activities.
C.
Fiduciary activities.
D.
Note disclosures only.
A.
| Governmental activities.
52
Which of the following funds would be reported as a fiduciary fund in Pine City's financial statements?
A.
Special revenue.
B.
Permanent.
C.
Private-purpose trust.
D.
Internal service.
C.
| Private-purpose trust.
53
The budget for the City of Goodville for the year ending December 31 was adopted and recorded on January 2 of the same year. After recording the budget, the accounting records showed a debit balance of $50,000 in the Budgetary Fund Balance account. What does this indicate?
A.
Appropriations are $50,000 greater than estimated revenues
B.
Estimated revenues are $50,000 greater than appropriations
C.
Appropriations are $50,000 greater than revenues
D.
Revenues are $50,000 greater than appropriations
A.
| Appropriations are $50,000 greater than estimated revenues
54
Which of the following would be reported as program revenues on a local government's government-wide statement of activities?
A.
Charges for services.
B.
Taxes levied for a specific function.
C.
Proceeds from the sale of a capital asset used for a specific function.
D.
Interest revenues.
A.
| Charges for services.
55
Which of the following local government funds uses the accrual basis of accounting?
A.
Enterprise.
B.
Debt service.
C.
Capital projects.
D.
Special revenue.
A.
| Enterprise.
56
Which of the following items is an example of imposed nonexchange revenue for a governmental entity?
A.
Personal income taxes.
B.
Retail sales tax.
C.
Federal grant money
D.
Property taxes.
D.
| Property taxes.
57
A government makes a contribution to its pension plan in the amount of $10,000 for year 1. The actuarially-determined annual required contribution for year 1 was $13,500. The pension plan paid benefits of $8,200 and refunded employee contributions of $800 for year 1. What is the pension expenditure for the general fund for year 1?
A.
$8,200
B.
$9,000
C.
$10,000
D.
$13,500
C.
| $10,000
58
Which of the following is not a fiduciary fund?
A.
Pension trust fund
B.
Agency fund
C.
Private purpose trust fund
D.
Internal service fund
D.
| Internal service fund
59
A general fund’s annual budget was prepared on the cash basis of accounting. The general fund is included in the government-wide financial statements, applying the accrual basis of accounting, and is included in the fund financial statements on a modified accrual basis. What basis will be used to prepare the general fund’s statement of revenues, expenditures, and changes in fund balance – budget and actual?
A.
A statement of revenues, expenditures, and changes in fund balance – budget and actual is not prepared for the general fund.
B.
Accrual basis
C.
Modified accrual basis
D.
Cash basis
D.
| Cash basis
60
What is the major difference between an exchange transaction and a non-exchange transaction for governmental units?
A.
The relationship between the amount of value given and received.
B.
Time requirements and whether the transaction is required by law.
C.
Purpose restrictions placed upon fund balances.
D.
Whether resources acquired can be further exchanged
A.
| The relationship between the amount of value given and received.
61
According to GASB 34, Basic Financial Statements-and Management’s Discussion and Analysis-for State and Local Governments, certain budgetary schedules are required supplementary information. What is the minimum budgetary information required to be reported in those schedules?
A.
A schedule of unfavorable variances at the functional level.
B.
A schedule showing the final appropriations budget and actual expenditures on a budgetary basis.
C.
A schedule showing the original budget, the final appropriations budget, and actual inflows, outflows, and balances on a budgetary basis.
D.
A schedule showing the proposed budget, the approved budget, the final amended budget, actual inflows and outflows on a budgetary basis, and variances between budget and actual.
C.
A schedule showing the original budget, the final appropriations budget, and actual inflows, outflows, and balances on a budgetary basis.
62
Tang City received land from a donor who stipulated that the land must remain intact, but any income generated from the property may be used for general government services. In which fund should Tang City record the donated land?
A.
Special revenue.
B.
Permanent.
C.
Private-purpose trust.
D.
Agency.
B.
| Permanent.
63
How should state appropriations to a state university choosing to report as engaged only in business-type activities be reported in its statement of revenues, expenses, and changes in net position?
A.
Operating revenues
B.
Nonoperating revenues.
C.
Capital contributions.
D.
Other financing sources.
B.
| Nonoperating revenues.
64
A city had to make significant repairs to a building damaged by flooding of a nearby river. Damage due to flooding is not unusual, but has been infrequent in the last few years. How should the city's general fund report the cost of the repairs in its fund financial statements?
A.
As an expenditure.
B.
As other financing use.
C.
As a special item.
D.
As an extraordinary item.
A.
| As an expenditure.
65
A county's balances in the general fund included the following:
Appropriations $435,000
Encumbrances $18,000
Expenditures $164,000
Vouchers payable $23,000
What is the remaining amount available for use by the county?
A.
$230,000
B.
$248,000
C.
$253,000
D.
$271,000
C.
| $253,000
66
According to GASB concept statements, which of the following is not an objective of financial reporting for a state or local government?
A.
Allow users to evaluate the operating results of the governmental entity for the year.
B.
Fulfill the government’s duty to be publicly accountable
C.
Allow users to determine the cost of providing services and the cost of administering the government
D.
Allow users to assess the governmental entity’s ability to meet its obligations
C.
| Allow users to determine the cost of providing services and the cost of administering the government
67
When a purchase order is released, a commitment is made by a governmental unit to buy a computer to be manufactured to specifications for use in property tax administration. This commitment should be recorded in the general fund as a (an)
A.
Appropriation.
B.
Encumbrance.
C.
Expenditure.
D.
Fixed asset.
B.
| Encumbrance.
68
In preparing Chase City's reconciliation of the statement of revenues, expenditures, and changes in fund balances to the government-wide statement of activities, which of the following items should be subtracted from changes in fund balances?
A.
Capital assets purchases.
B.
Payment of long-term debt principal.
C.
Internal service fund increase in net assets.
D.
Book value of capital assets sold during the year.
D.
| Book value of capital assets sold during the year.
69
Exceptional County has budgeted revenues of $6,000, consisting of property taxes of $4,800, business licensed of $800, and other miscellaneous fees of $400. It budgeted expenditures of $5,400, consisting of supplies of $1,300, new equipment for $3,000, and salaries of $1,100. The journal entry to record its budget will include which of the following?
A.
A credit of $6,000 to revenues
B.
A credit of $5,400 to appropriations of
C.
A debit of $5,400 to budgeted expenditures
D.
A debit of $600 to budgetary fund balance – unreserved
B.
| A credit of $5,400 to appropriations of
70
An enterprise fund would be used when the governing body requires that
I. Accounting for the financing of an agency’s services to other government departments be on a cost-reimbursement basis.
II. User charges cover the costs of general public services.
III. Net income information be reported for an activity.
A.
I only.
B.
I and II.
C.
I and III.
D.
II and III.
D.
| II and III.
71
Which of the following transactions should be reported as a liability in the general fund financial statements?
A.
An amount that is due within one year of the balance sheet date.
B.
An amount to be paid from current financial resources.
C.
An amount set aside to pay for an unfilled contract.
D.
Principal on long-term debt due 90 days after the balance sheet date.
B.
| An amount to be paid from current financial resources.
72
For the budgetary year ending December 31, 20X3, Maple City’s general fund expects the following inflows of resources:
Property Taxes, Licenses, and Fines $9,000,000
Proceeds of Debt Issue $5,000,000
Interfund Transfers for Debt Service $1,000,000
In the budgetary entry, what amount should Maple record for estimated revenues?
A.
$9,000,000
B.
$10,000,000
C.
$14,000,000
D.
$15,000,000
A.
| $9,000,000
73
What basis of accounting should be used when preparing a governmental funds statement of revenues, expenditures, and changes in fund balances?
A.
Accrual basis of accounting
B.
Modified accrual basis of accounting
C.
Modified cash basis of accounting
D.
Cash basis of accounting
B.
| Modified accrual basis of accounting
74
A budgetary fund balance Reserved for Encumbrances in excess of a balance of encumbrances indicates
A.
An excess of vouchers payable over encumbrances.
B.
An excess of purchase orders over invoices received.
C.
An excess of appropriations over encumbrances.
D.
A recording error.
D.
| A recording error.
75
At the beginning of the current year, Paxx County's enterprise fund had a $125,000 balance for accrued compensated absences. At the end of the year, the balance was $150,000. During the year, Paxx paid $400,000 for compensated absences. What amount of compensated absences expense should Paxx County's enterprise fund report for the year?
A.
$375,000
B.
$400,000
C.
$425,000
D.
$550,000
C.
| $425,000
76
Property taxes and fines represent which of the following classes of non-exchange transactions for governmental units?
A.
Derived tax revenues.
B.
Imposed non-exchange revenues.
C.
Government-mandated non-exchange transactions.
D.
Voluntary non-exchange transactions.
B.
| Imposed non-exchange revenues.
77
The City of Curtain had the following interfund transactions during the month of May:
Billing by the internal service fund to a department financed by the general fund, for services rendered in the amount of $5,000.
Transfer of $200,000 from the general fund to establish a new enterprise fund.
Routine transfer of $50,000 from the general fund to the debt service fund.
What was the total reciprocal interfund activity for Curtain during May?
A.
$5,000
B.
$55,000
C.
$200,000
D.
$255,000
A.
| $5,000
78
Which of the following financial statements should be prepared for proprietary funds?
A.
Statement of revenues, expenditures, and changes in fund balances.
B.
Statement of activities.
C.
Statement of changes in proprietary net position.
D.
Statement of cash flows
D.
| Statement of cash flows
79
Which of the following statements is the most significant characteristic in determining the classification of an enterprise fund?
A.
The predominant customer is the primary government.
B.
The pricing policies of the activity establish fees and charges designed to recover its cost.
C.
The activity is financed by debt that is secured partially by a pledge of the net revenues from fees and charges of the activity.
D.
Laws or regulations require that the activity's costs of providing services including capital costs be recovered with taxes or similar revenues.
B.
| The pricing policies of the activity establish fees and charges designed to recover its cost.
80
Which of the following funds of a governmental unit records depreciation?
A.
Capital projects fund.
B.
Debt service fund.
C.
Internal service fund.
D.
Special revenue fund.
C.
| Internal service fund.
81
Which of the following funds of a governmental unit uses the same basis of accounting as the special revenue fund?
A.
Internal service.
B.
Capital projects.
C.
Nonexpendable trust.
D.
Enterprise.
B.
| Capital projects.
82
Clay City levied property taxes of $600,000 for the current year, and estimated that $25,000 would be uncollectible. Which of the following is the correct general fund journal entry to record the property tax levy?
A.
Debits Credits
Property Taxes Receivable-Current $600,000
Property Tax Revenue $600,000
```
B.
Debits Credits
Property Taxes Receivable-Current $575,000
Bad debt expense 25,000
Property Tax Revenue $600,000
```
C.
Debits Credits
Property Taxes Receivable-Current $600,000
Property Tax Revenue $575,000
Allowance for Uncollectable Property $25,000
D.
Debits Credits
Property Taxes Receivable-Current $600,000
Bad debt expense 25,000
Property Tax Revenue $600,000
Allowance for Uncollectable Property Taxes 25,000
C.
Debits Credits
Property Taxes Receivable-Current $600,000
Property Tax Revenue $575,000
Allowance for Uncollectable Property $25,000
83
Which of the following transactions is an expenditure of a governmental unit’s general fund?
A.
Contribution of enterprise fund capital by the general fund.
B.
Operating subsidy transfer from the general fund to an enterprise fund.
C.
Routine employer contributions from the general fund to a pension trust fund.
D.
Transfer from the general fund to a capital projects fund.
C.
| Routine employer contributions from the general fund to a pension trust fund.
84
According to GASB concept statements, which of the following are characteristics that the financial reports of state and local governments should possess?
A.
Understandability, timeliness, and fairness
B.
Reliability, fairness, and consistency
C.
Understandability, fairness, and consistency
D.
Timeliness, reliability, and consistency
C.
| Understandability, fairness, and consistency
85
Which of the following should be considered part of one of the three primary user groups of the external financial reports of a state government?
A.
Citizens of a neighboring state
B.
Advocate groups within the state
C.
Preparers of state government financial reports
D.
Internal managers in the executive branch of the state government
B.
| Advocate groups within the state
86
In governmental accounting, a fund is
I. The basic accounting unit.
II. Used to assist in ensuring fiscal compliance.
A.
I only.
B.
II only.
C.
Both I and II.
D.
Neither I nor II.
C.
| Both I and II.
87
If a city government is the primary reporting entity, which of the following is an acceptable method to present component units in its combined financial statements?
A.
Consolidation.
B.
Cost method.
C.
Discrete presentation.
D.
Government-wide presentation.
C.
| Discrete presentation.
88
What is the basic criterion used to determine the reporting entity for a governmental unit?
A.
Special financing arrangement.
B.
Geographic boundaries.
C.
Scope of public services.
D.
Financial accountability.
D.
| Financial accountability.
89
Which of the following is a required financial statement for an investment trust fund?
A.
Statement of revenues, expenditures, and changes in fiduciary net position.
B.
Statement of activities.
C.
Statement of revenues, expenses, and changes in fiduciary net position.
D.
Statement of changes in fiduciary net position.
D.
| Statement of changes in fiduciary net position.
90
The general fund of ABC city acquired two police cars at the beginning of January 20X3, at a total cost of $40,000. The cars are expected to last for four years and have a $10,000 residual value. Straight-line depreciation is used.
On the balance sheet for the governmental funds at December 31, 20X3, the police cars will be reported under assets in the general fund column at which of the following amounts?
A.
$40,000
B.
$32,500
C.
$0
D.
$22,500
C.
| $0
91
Tree City reported a $1,500 net increase in fund balance for governmental funds. During the year, Tree purchased general capital assets of $9,000 and recorded depreciation expense of $3,000. What amount should Tree report as the change in net assets for governmental activities?
A.
($4,500)
B.
$1,500
C.
$7,500
D.
$10,500
C.
| $7,500
92
Dale City is accumulating financial resources that are legally restricted to payments of general long-term debt principal and interest maturing in future years. At December 31, 20X3, $5,000,000 has been accumulated for principal payments and $300,000 has been accumulated for interest payments. These restricted funds should be accounted for in the
```
A.
General fund ($5,300,000).
```
B.
Debt service fund ($300,000) and general fund ($5,000,000).
C.
Debt service fund ($5,000,000) and general fund ($300,000).
D.
Debt service fund ($5,300,000).
D.
| Debt service fund ($5,300,000).
93
Which basis of accounting is required for a city's government-wide financial statements?
A.
Cash.
B.
Modified cash.
C.
Modified accrual.
D.
Accrual.
D.
| Accrual.
94
Roy City received a gift, the principal of which is to be invested in perpetuity with the income to be used to support the local library. In which fund should this gift be recorded?
A.
Permanent fund.
B.
Investment trusts fund.
C.
Private-purpose trusts fund.
D.
Special revenue fund.
A.
| Permanent fund.
95
Edgerton Township ordered a machine at an estimated cost of $3,500, which had not been delivered as of the end of its fiscal year. The machine was delivered early in the next period at an actual cost of $3,800. Which of the following entries will be made when the machine is delivered?
A.
Expenditures — Prior year 3,500
Expenditures 300
Vouchers payable 3,800
B.
Fund balance — Unreserved 3,500
Reserved for encumbrances 3,500
C.
Expenditures 3,800
Vouchers payable 3,800
D.
Reserve for encumbrances 3,800
Fund balance — Unreserved 3,800
A.
Expenditures — Prior year 3,500
Expenditures 300
Vouchers payable 3,800
96
Land and other real estate held as investments by endowments in a government's permanent fund should be reported at
A.
Historical cost.
B.
The lower of cost and net realizable value.
C.
Fair value.
D.
Fair value less costs of disposal.
C.
| Fair value.
97
Chase City imposes a 2% tax on hotel charges. Revenues from this tax will be used to promote tourism in the city. Chase should record this tax as what type of nonexchange transaction?
A.
Derived tax revenue.
B.
Imposed nonexchange revenue.
C.
Government-mandated transaction.
D.
Voluntary nonexchange transaction.
A.
| Derived tax revenue.
98
Jonn City entered into a lease for equipment during the year. How should the asset obtained through the lease be reported in Jonn City's government-wide statement of net assets?
A.
Right-to-use lease asset.
B.
Other financing use.
C.
Expenditure.
D.
Not reported.
A.
| Right-to-use lease asset.
99
A city received a $9,000,000 federal grant to finance the construction of a homeless shelter. In which fund should the proceeds be recorded?
A.
Permanent
B.
General
C.
Capital project
D.
Special revenue
C.
| Capital project
100
Which of the following would not be included in government-wide financial statements?
A.
Pension trust fund
B.
Internal service fund
C.
Enterprise fund
D.
Capital projects fund
A.
| Pension trust fund
101
Which of the following lead(s) to the use of fund accounting by a governmental organization?
A.
Both financial control and legal restrictions.
B.
Financial control, not legal restrictions.
C.
Neither financial control nor legal restrictions.
D.
Legal restrictions, not financial control.
B.
| Financial control, not legal restrictions.
102
A city council designates funds in the enterprise fund for future equipment replacement. The enterprise fund should report this as
A.
A restricted component of net position.
B.
A net investment in capital assets.
C.
A designated component of net position.
D.
An unrestricted component of net position.
D.
| An unrestricted component of net position.
103
A government's police department reports appropriations of $10,000, encumbrances of $2,000, and expenditures of $5,000. What is the amount of available appropriations for the police department?
A.
$3,000
B.
$5,000
C.
$7,000
D.
$8,000
A.
| $3,000
104
Hunt Community Development Agency (HCDA), a financially independent authority, provides loans to commercial businesses operating in Hunt County. This year, HCDA made loans totaling $500,000. How should HCDA classify the disbursements of loans on the cash flow statement?
A.
Operating activities.
B.
Noncapital financing activities.
C.
Capital and related financing activities.
D.
Investing activities.
A.
| Operating activities.
105
On January 2, City of Walton issued $500,000, 10-year, 7% general obligation bonds. Interest is payable annually, beginning January 2 of the following year. What amount of bond interest is Walton required to report in the statement of revenue, expenditures, and changes in fund balance of its governmental funds at the close of this fiscal year, September 30?
A.
$0
B.
$17,500
C.
$26,250
D.
$35,000
A.
| $0
106
Which of the following statements are required to be presented for special-purpose government entities engaged only in business-type activities (such as utilities)?
A.
Statement of net assets only.
B.
Management's Discussion and Analysis (MD&A) and Required Supplementary Information (RSI) only.
C.
The financial statements required for governmental funds, including MD&A.
D.
The financial statements required for enterprise funds, including MD&A and RSI.
D.
| The financial statements required for enterprise funds, including MD&A and RSI.
107
A city government would report each of the following categories in its government-wide statement of net position except
A.
Governmental activities.
B.
Business-type activities.
C.
Fiduciary activities.
D.
Component units.
C.
| Fiduciary activities.
108
Which of the following is a governmental fund that uses the current financial resources measurement focus?
A.
Enterprise fund
B.
Internal service fund
C.
Special revenue fund
D.
Private-purpose trust fund
C.
| Special revenue fund
109
Which of the following is included in the governmental fund statements?
A. Cash flows statements
B. Component unit information
C. Reconciliation between the fund statements and the government-wide statements
D. Major fiduciary funds
C. Reconciliation between the fund statements and the government-wide statements
110
Which of the following financial statements should be prepared for proprietary funds?
A.
Statement of revenues, expenditures, and changes in fund balances.
B.
Statement of activities.
C.
Statement of changes in proprietary net position.
D.
Statement of cash flows.
D.
| Statement of cash flows.
111
A government has the following liabilities at the end of the year:
General obligation bonds $1,500,000
Compensated absences 120,000
Salaries payable 40,000
What amount of liabilities should be reported in the governmental activities column of the government-wide statement of net position?
A.
$40,000
B.
$160,000
C.
$1,540,00
D.
$1,660,000
D.
| $1,660,000
112
Which of the following funds of a governmental unit recognizes revenues in the accounting period in which they become available and measurable?
A.
General fund, not enterprise fund.
B.
Enterprise fund, not general fund.
C.
Both general fund and enterprise fund.
D.
Neither general fund nor enterprise fund.
A.
| General fund, not enterprise fund.
113
A government's assets include inventory of $2 million, roads constructed for $25 million with accumulated depreciation of $10 million, and equipment acquired for $5 million with accumulated depreciation of $1 million. Its liabilities include an outstanding balance of $5 million for bonds payable issued to construct the roads and a $1 million short-term loan for inventory purchases. What amount should be reported as the net investment in capital assets in the government-wide statement of net position?
A.
$26 million
B.
$25 million
C.
$14 million
D.
$10 million
C.
| $14 million
114
Both Curry City and the State have a general sales tax on all merchandise. Curry City’s tax rate is 2 percent and the State’s rate is 4 percent. Merchants are required by law to remit all sales tax collected each month to the State by the 15th of the following month. By law, the State has 45 days to process the collections and to make disbursements to the various jurisdictions for which it acts as an agent. Sales tax collected by merchants in Curry total $450,000 in May and $600,000 in June. Both merchants and the State make remittances in accordance with statutes. What amount of sales tax revenue for May and June is included in the June 30 year-end financial statements of the State and Curry?
A.
State: $1,050,000
Curry: $0
B.
State: $1,050,000
Curry: $350,000
C.
State: $700,000
Curry: $350,000
D.
State: $300,000
Curry: $150,000
C.
State: $700,000
Curry: $350,000
115
Harland County received a $2,000,000 capital grant to be equally distributed among its five municipalities. The grant is to finance the construction of capital assets. Harland had no administrative or direct financial involvement in the construction. In which fund should Harland record the receipt of cash?
A.
Agency fund.
B.
General fund.
C.
Special revenue fund.
D.
Private purpose trust fund.
A.
| Agency fund.
116
In 20X3, New City issued purchase orders and contracts of $850,000 that were chargeable against 20X3 budgeted appropriations of $1,000,000. The actual cost of the purchase orders was $2,000,000. The journal entry to record the issuance of the purchase orders and contracts should include a
A.
Credit to Vouchers Payable of $1,000,000.
B.
Credit to Budgetary Fund Balance - Reserved for Encumbrances of $850,000.
C.
Debit to Expenditures of $1,000,000.
D.
Debit to Appropriations of $850,000.
B.
| Credit to Budgetary Fund Balance - Reserved for Encumbrances of $850,000.
117
An unrestricted grant received from another government to support enterprise fund operations should be reported as
A.
Contributed capital.
B.
Nonoperating revenues.
C.
Operating revenues.
D.
Revenues and expenditures.
B.
| Nonoperating revenues.
118
During the current year, Vann County's motor pool internal service fund sold two vehicles for $5,000. The vehicles had a cost of $6,000 and a carrying value of $4,000. How should Vann County's motor pool internal service fund report this transaction in its fund financial statements?
A.
Revenue of $5,000
B.
Other financing source of $5,000
C.
Special item of $1,000
D.
Gain of $1,000
D.
| Gain of $1,000
119
On January 2, Basketville City purchased equipment with a useful life of three years to be used by its water and sewer enterprise fund. Which of the following is the correct treatment for the asset?
A.
Record the purchase of the equipment as an expenditure.
B.
Capitalize; depreciation is optional.
C.
Capitalize; depreciation is required.
D.
Capitalize; depreciation is not permitted.
C.
| Capitalize; depreciation is required.
120
According to GASB concept statements, which of the following is not an objective of financial reporting for a state or local government?
A.
Allow users to evaluate the operating results of the governmental entity for the year.
B.
Fulfill the government’s duty to be publicly accountable
C.
Allow users to determine the cost of providing services and the cost of administering the government
D.
Allow users to assess the governmental entity’s ability to meet its obligations.
C.
| Allow users to determine the cost of providing services and the cost of administering the government
121
A city ordered goods at an estimated cost of $4,500. When the goods were received, 30 days after the order was placed, they were accompanied by an appropriate invoice in the amount of $4,800. What amount will be recognized as an adjustment to encumbrances when the goods are delivered?
A.
Debit $4,500
B.
Credit $4,500
C.
Debit $4,800
D.
Credit $4,800
B.
| Credit $4,500
122
Lily City uses a pay-as-you-go approach for funding postemployment benefits other than pensions. The city reports no other postemployment benefits (OPEB) liability at the beginning of the year. At the end of the year, Lily City reported the following information related to OPEB for the water enterprise fund:
Benefits paid $100,000
Annual required contribution 500,000
Unfunded actuarial accrued liability 800,000
What amount of expense for OPEB should Lily City's water enterprise fund report in its fund level statements?
A.
$100,000
B.
$500,000
C.
$600,000
D.
$1,400,000
B.
| $500,000
123
Sig City used the following funds for financial reporting purposes:
General fund Capital projects fund
Internal service fund Special revenue fund
Airport enterprise fund Debt service fund
Pension trust fund
How many of Sig's funds use the accrual basis of accounting?
A.
Two.
B.
Three.
C.
Four.
D.
Five.
B.
| Three.
124
Which of the following activities should be excluded when governmental fund financial statements are converted to government-wide financial statements?
A.
Proprietary funds.
B.
Fiduciary funds.
C.
Government activities.
D.
Enterprise activities.
B.
| Fiduciary funds.
125
Which of the following statements is correct about the accounting for infrastructure assets using the modified approach?
I. Depreciation expense on the infrastructure assets should be reported on the government-wide statement of activities, under the governmental activities column.
II. Certain information about infrastructure assets reported using the modified approach is required supplementary information in the annual report.
A.
I only.
B.
II only.
C.
Both I and II.
D.
Neither I nor II.
B.
| II only.
126
Property taxes and fines represent which of the following classes of nonexchange transactions for governmental units?
A.
Derived tax revenues.
B.
Imposed nonexchange revenues.
C.
Government-mandated nonexchange transactions.
D.
Voluntary nonexchange transactions.
B.
| Imposed nonexchange revenues.
127
All of the following statements regarding notes to the basic financial statements of governmental entities are true except
A.
The notes contain disclosures related to required supplementary information.
B.
Some notes presented by governments are identical to notes presented in business financial statements.
C.
Notes that are considered essential to the basic financial statements need to be presented.
D.
It is acceptable to present notes in a very extensive format.
A.
| The notes contain disclosures related to required supplementary information.
128
Seaview City received a pass-through grant from the state. The money is to be distributed to families who, as determined by the state, are eligible for summer camp scholarships for their children. Seaview does not have administrative or direct financial involvement in the program. In which fund should Seaview record the grant?
A.
Agency
B.
General
C.
Internal service
D.
Enterprise
A.
| Agency
129
As of December 31, 20X5, ABC city compiled the information below for its capital assets, exclusive of infrastructure assets.
Cost of capital assets financed with
general obligation debt and tax revenues $3,500,000
Accumulated depreciation on the capital assets $750,000
Outstanding debt related to the capital assets $1,250,000
On the government-wide statement of net position at December 31, 20X5, under the governmental activities column, the information related to capital assets should be reported in the net position section at which of the following amounts?
A.
$3,500,000
B.
$1,500,000
C.
$2,250,000
D.
$2,750,000
B.
| $1,500,000
130
Cedar City issues $1,000,000, 6% revenue bonds were issued at par on April 1, to build a new water line for the water enterprise fund. Interest is payable every six months. What amount of interest expense should be reported for the year ended December 31?
A.
$0
B.
$30,000
C.
$45,000
D.
$60,000
C.
| $45,000
131
Which of the following statements are required to be presented for special-purpose government entities engaged only in business-type activities (such as utilities)?
A.
Statement of net assets only.
B.
Management's Discussion and Analysis (MD&A) and Required Supplementary Information (RSI) only.
C.
The financial statements required for governmental funds, including MD&A.
D.
The financial statements required for enterprise funds, including MD&A and RSI.
D.
| The financial statements required for enterprise funds, including MD&A and RSI.
132
For funds other than the general fund, the definition of “major” generally is based on which of the following?
A. The cumulative materiality of the fund over five reporting periods
B. The current year’s balance compared to the previous year’s balance
C. An objective assessment of the relative size compared to the government’s totals
D. None of the above
C. An objective assessment of the relative size compared to the government’s totals
133
River City has a defined contribution pension plan. How should River report the pension plan in its financial statements?
A. Amortize any transition asset over the estimated number of years of current employees' service.
B. Disclose in the notes to the financial statements the amount of the pension benefit obligation and the net assets available for benefits.
C. Identify in the notes to financial statements the types of employees covered and the employer's and employees' obligations to contribute to the fund.
D. Accrue a liability for benefits earned but not paid to fund participants.
C. Identify in the notes to financial statements the types of employees covered and the employer's and employees' obligations to contribute to the fund.
134
Which of the following items is included in the financing activities section of the statement of cash flows?
A. Cash effects of transactions involving making and collecting loans.
B. Cash effects of acquiring and disposing of investments and property, plant, and equipment.
C. Cash effects of transactions obtaining resources from owners and providing them with a return on their investment.
D. Cash effects of transactions that enter into the determination of net income.
C. Cash effects of transactions obtaining resources from owners and providing them with a return on their investment.
135
A government entity is required to include a statement of cash flows in which of the following financial statements?
A. Governmental Fund financial statements.
B. Government-Wide financial Statements.
C. Proprietary Fund financial statements.
D. Fiduciary Fund financial statements.
C. Proprietary Fund financial statements.
136
Which of the following describes GASB’s role for improving communications in governmental external financial reporting?
A. The Board’s independence supports governments’ credibility and comparability among governments’ financial statements.
B. GASB standards establish performance standards that users can use to evaluate the effectiveness of governmental services.
C. Developing key financial measures for governmental service performance.
D. Representing state and local governments at Congressional oversight hearings with the Government Accountability Office.
A. The Board’s independence supports governments’ credibility and comparability among governments’ financial statements.
137
Jonn City entered into a capital lease for equipment during the year. How should the asset obtained through the lease be reported in Jonn City's governmentwide
statement of net position?
A. General capital asset.
B. Other financing use.
C. Expenditure.
D. Not reported.
A. General capital asset.
138
Which of the following indicates when the fund balance may not be reported as assigned?
A. If the assignment causes a deficit in unassigned fund balance
B. In Capital Projects funds
C. If there is no component for committed fund balance
D. In the General Fund
A. If the assignment causes a deficit in unassigned fund balance
139
Which of the following is GASB's Concept Statement No. 4’s definition of “assets”?
A. Resources that can be converted to cash in the near-term
B. Resources that are not encumbered with obligations to provide future benefits
C. An outflow of resources that will provide services in a future period
D. Resources with present service capacity that the government presently controls
D. Resources with present service capacity that the government presently controls
140
A city government levies a tax on its citizens for improvements to roads. How should the city report the tax in its statement of activities?
A. By type of tax in general revenues.
B. By type of tax in program revenues.
C. As program-specific contributions in program revenues.
D. In special items reported separately from general revenue.
A. By type of tax in general revenues.
141
A city government reported a $9,000 increase in net position in the motor pool internal service fund, a $12,000 increase in net position in the water enterprise fund, and a $7,000 increase in the employee pension fund. The motor pool internal service fund provides service primarily to the police department. What amount should the city report as the change in net position for business-type activities in its statement of activities?
A. $9,000
B. $12,000
C. $21,000
D. $28,000
B. $12,000
142
Lake County received the following proceeds that are legally restricted to expenditure for specified purposes:
Levies on affected property owners to install sidewalks $500,000
Gasoline taxes to finance road repairs 900,000
What amount should be accounted for in Lake's special revenue funds?
A. $1,400,000
B. $900,000
C. $500,000
D. $0
B. $900,000
