Vocabulary

Question 1

Accounting is the process of identifying, measuring and communicating economic information to permit informed judgments and ___________ by users of the information.

Answer 1

Decisions

Question 2

Debits must always equal _______

Answer 2

Credits

Question 3

True or False: Assets = Liabilities + Fund Balance

Answer 3

True

Question 4

The old term for Fund Balance is ________

Answer 4

Surplus

Question 5

True or False: Assets appear on the right side of the balance sheet

Answer 5

False

Question 6

A double entry system is completely represented by which of the following?

A. Checkbook
B. Fixed Asset Ledger
C. A receipt book
D. A general ledger

Answer 6

D. A general ledger

Question 7

Name the 4 Books of Original Entry

Answer 7

Cash Receipts Journal
Cash Disbursements Journal
Payroll Journal
General Journal

Question 8

Assets, Liabilities and Fund Balance are called permanent accounts because they will appear on what financial statement?

Answer 8

Balance Sheet

Question 9

Revenue and Expenditure accounts are called _________ accounts because they will get closed to Budget Operations.

Answer 9

Temporary

Question 10

Liabilities are increased with a (Debit or Credit)

Answer 10

Credit

Question 11

Fund Balance appears on which side of the Balance Sheet

Answer 11

Right

Question 12

Fund Balance is decrease with a (Debit or Credit)

Answer 12

Debit

Question 13

In a double-entry accounting system every transaction has at least two entries which include a _______ and a _________

Answer 13

Debit and a Credit

Question 14

How are revenues and expenditures recognized in Modified Accrual Accounting?

Answer 14

Revenue is recognized when Received

Expenditures are recognized when incurred

Question 15

What does MRNA stand for?

Answer 15

Miscellaneous Revenue Not Anticipated

Question 16

The State of NJ requires municipalities to use double entry accounting. What is the source of that requirement?

Answer 16

TAD #3

Question 17

What is GAAP?

Answer 17

Generally Accepted Accounting Principles.

Question 18

What is OCBOA?

Answer 18

Other Comprehensive Basis of Accounting

Question 19

Who is the Director of the Division of Local Government Services

Answer 19

Timothy Cunningham

Question 20

What are the 4 Commonly referenced Statutes

Answer 20

NJSA 40A:2 Local Bond Law
NJSA 40A:4 Local Budget Law
NJSA 40A:5 Local Fiscal Affairs Law
NJSA 40A:11 Local Public Contracts Law

Question 21

What are the Technical Accounting Directives and how are they referred to now?

Answer 21

TAD#1 - Encumbrances (NJAC 5:30-5.2)
TAD#2 - Fixed Assets (NJAC 5:30-5.6)
TAD#3 - General Ledger (NJAC 5:30-5.7)

Question 22

What are the two types of accounting methods?

Answer 22

1. Financial Accounting

2. Management / Cost Accounting

Question 23

What is the purpose of a T- Account

Answer 23

Graphic representation of debits and credits in a specific account

Question 24

What are the 5 Basic Accounts that make up a General Ledger?

Answer 24

Assets
Liabilities
Fund Balance
Revenue
Expenditures

Question 25

What is the accounting equation

Answer 25

Assets = Liabilities + Fund Balance

Question 26

List at least 3 common Asset accounts

Answer 26

``` Cash Petty Cash Investments Prepaid Insurance Taxes Receivable Tax Title Liens Receivable Foreclosed Property Interfund Receivable Accounts Receivable ```

Question 27

List at least 3 common Liability account

Answer 27

``` Appropriation Reserves Prepaid Taxes County Taxes Payable Interfund Payable Accounts Payable Encumbrance Payable ```

Question 28

What is an Accounts Receivable?

Answer 28

Amounts owed to you by other parties such as taxpayers, other agencies or financial institutions

Question 29

What is an Accounts Payable?

Answer 29

Bills or obligations that you owe to vendors or other agencies such as School Districts, County or Special District

Question 30

What is the definition of an Encumbrance?

Answer 30

To make difficult to use or obstruct. To burden with obligations