Advanced Accounting Chapters 16 & 17 REVIEW | Comprehensive
Questions and Correct Answers | Consolidations and Equity Method |
Updated
The Governmental Accounting Standards Board (GASB) requires state and local governments to
prepare two sets of financial statements which include:
C) Fund financial statements and government-wide financial statements.
Which group of government financial statements reports all revenues and all costs as well as all
assets and liabilities of the governmental entity?
D) Government-wide financial statements.
Proprietary funds are
B) Funds used to account for a government's ongoing activities that are similar to those operated
by for-profit organizations.
Fiduciary funds are
C) Funds used to account for monies held by the government in a trustee or agency capacity.
Governmental funds are
A) Funds used to account for the activities of a government that are carried out primarily to
provide services to citizens.
Special Revenue funds are
E) Funds used to account for resources that are restricted or committed for a specific purpose
other than debt payments or capital projects.
What are the broad classifications of funds for a governmental entity such as a city?
B) Governmental, proprietary, and fiduciary funds.
Under modified accrual accounting, revenues should be recognized when they are
D) Measurable and available to be used.
Under modified accrual accounting, when should an expenditure be recorded to recognize
interest on long-term debt?
B) When payment is due within one fiscal year.
Revenue from property taxes should be recorded in the General Fund
D) In the period for which the resulting resources are required or permitted to be used.
, Government-wide financial statements benefit users by allowing them to do all of the following
except:
D) Identify the government official responsible for managing each fund.
Trapper City issued 30-year bonds for the purpose of building a new City Hall. The proceeds of
the bonds are deposited in the General Fund. For the governmental fund financial statements, in
what fund will Bonds Payable appear?
E) Bonds Payable do not appear in governmental fund financial statements.
According to GASB Concepts Statement No. 1, what are the three groups of primary users of
external state and local governmental financial reports?
D) The citizenry, legislative and oversight bodies, and investors and creditors.
Which of the following statements is true regarding governmental fund financial statements?
B) Governmental fund financial statements should tell the amount spent this year on such
services as public safety, education, health and sanitation, and the construction of a new road.
Which of the following statements is false regarding government-wide financial statements?
C) Government-wide financial statements focus on the short-term instead of the long-term.
How do the balance sheet and statement of revenues, expenditures, and changes in fund balances
of governmental funds differ from the financial statement presentation for the governmental
activities in the government-wide statement of net assets and statement of activities?
(1) Internal service funds are not included in the fund financial statements of governmental funds
but could be reported in the governmental activities of government-wide financial statements.
(2) The economic resources measurement basis is used for fund financial statements of
governmental funds and the current financial resources measurement basis is used for
governmental activities in the government-wide financial statements.
(3) Modified accrual accounting is used for fund financial statements of governmental funds to
time revenues and expenditures and accrual accounting is used for governmental activities of
government-wide financial statements.
(4) The financial statements of governmental funds for fund financial statements are the same as
governmental activities in government-wide financial statements but with different titles of the
financial statements.
D) 1 and 3.
Which statement is not correct?
A) Governmental funds account for expenditures of financial resources rather than matching
revenues and expenses.
B) The Encumbrances Outstanding account should be reversed and closed at the end of a fiscal
Questions and Correct Answers | Consolidations and Equity Method |
Updated
The Governmental Accounting Standards Board (GASB) requires state and local governments to
prepare two sets of financial statements which include:
C) Fund financial statements and government-wide financial statements.
Which group of government financial statements reports all revenues and all costs as well as all
assets and liabilities of the governmental entity?
D) Government-wide financial statements.
Proprietary funds are
B) Funds used to account for a government's ongoing activities that are similar to those operated
by for-profit organizations.
Fiduciary funds are
C) Funds used to account for monies held by the government in a trustee or agency capacity.
Governmental funds are
A) Funds used to account for the activities of a government that are carried out primarily to
provide services to citizens.
Special Revenue funds are
E) Funds used to account for resources that are restricted or committed for a specific purpose
other than debt payments or capital projects.
What are the broad classifications of funds for a governmental entity such as a city?
B) Governmental, proprietary, and fiduciary funds.
Under modified accrual accounting, revenues should be recognized when they are
D) Measurable and available to be used.
Under modified accrual accounting, when should an expenditure be recorded to recognize
interest on long-term debt?
B) When payment is due within one fiscal year.
Revenue from property taxes should be recorded in the General Fund
D) In the period for which the resulting resources are required or permitted to be used.
, Government-wide financial statements benefit users by allowing them to do all of the following
except:
D) Identify the government official responsible for managing each fund.
Trapper City issued 30-year bonds for the purpose of building a new City Hall. The proceeds of
the bonds are deposited in the General Fund. For the governmental fund financial statements, in
what fund will Bonds Payable appear?
E) Bonds Payable do not appear in governmental fund financial statements.
According to GASB Concepts Statement No. 1, what are the three groups of primary users of
external state and local governmental financial reports?
D) The citizenry, legislative and oversight bodies, and investors and creditors.
Which of the following statements is true regarding governmental fund financial statements?
B) Governmental fund financial statements should tell the amount spent this year on such
services as public safety, education, health and sanitation, and the construction of a new road.
Which of the following statements is false regarding government-wide financial statements?
C) Government-wide financial statements focus on the short-term instead of the long-term.
How do the balance sheet and statement of revenues, expenditures, and changes in fund balances
of governmental funds differ from the financial statement presentation for the governmental
activities in the government-wide statement of net assets and statement of activities?
(1) Internal service funds are not included in the fund financial statements of governmental funds
but could be reported in the governmental activities of government-wide financial statements.
(2) The economic resources measurement basis is used for fund financial statements of
governmental funds and the current financial resources measurement basis is used for
governmental activities in the government-wide financial statements.
(3) Modified accrual accounting is used for fund financial statements of governmental funds to
time revenues and expenditures and accrual accounting is used for governmental activities of
government-wide financial statements.
(4) The financial statements of governmental funds for fund financial statements are the same as
governmental activities in government-wide financial statements but with different titles of the
financial statements.
D) 1 and 3.
Which statement is not correct?
A) Governmental funds account for expenditures of financial resources rather than matching
revenues and expenses.
B) The Encumbrances Outstanding account should be reversed and closed at the end of a fiscal
