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1. Question : (TCOs A and B) Fiduciary funds are to use which of the
following measurement and basis of accounting?
Student Answer: Economic resource measurement focus and
accrual basis of accounting.
Current financial resources measurement focus
and accrual basis of accounting.
Economic resources measurement focus and
modified accrual basis of accounting.
None of the above, the fiduciary funds have
no revenues.
Instructor Explanation: Chapter 1
Points Received: 5 of 5
Comments:
2. Question : (TCOs A and B) Funds other than the General Fund are
required to be considered to be a major fund when
Student Answer: (A) total assets, liabilities, revenues, or
expenditures/expenses of that fund constitute 10 percent of either the
governmental or enterprise category.
(B) total assets, liabilities, revenues, or
expenditures/expenses of that fund are at least 5 percent of the total of the
governmental and enterprise category.
The conditions of either A or B exist.
The conditions of both A and B exist.
Instructor Explanation: Chapter 2
Points Received: 5 of 5
Comments:
3. Question : (TCOs A and B) Which of the following is most correct with
regard to Management’s Discussion and Analysis?
Student Answer: Both state and local governments and federal
agencies are required to provide a MD&A.
Federal agency financial reports are required
to provide a MD&A.
State and local government agencies are
required to provide a MD&A.
Both state and local government and federal
agencies are encouraged, but not required to provide a MD&A.
Instructor Explanation: Chapters 1 and 2
Points Received: 0 of 5
Comments:
4. Question : (TCOs B and C) Governmental Fund Balance is required to be
displayed in which of the categories?
Student Answer: Nonspendable, Spendable, Assigned, and
Unassigned
Restricted, Unrestricted, Assigned, and
Unassigned
Nonspendable, Restricted, Committed,
Assigned, and Unassigned
Nonspendable, Restricted, and Unrestricted
Instructor Explanation: Chapter 3
Points Received: 5 of 5
Comments:
5. Question : (TCOs B and C) The proper journal entry to record an
encumbrance would include which of the following?
Student Answer: (A) A debit to the Encumbrance Account.
(B) A debit to the Reserve for Encumbrances
Account.
(C) A credit to the Reserve for Encumbrances
Account.
A and C would both be included in the journal
entry.
6. Question : (TCOs B and C)) Capital assets that are used by an
enterprise fund should be accounted for in the following fund?
Student Answer: Enterprise fund but no depreciation on the
capital assets should be recorded.
Enterprise fund and depreciation on the
capital assets should be recorded.
Business-type activities journal but no
depreciation on the capital assets should be recorded.
Governmental activities journal and
depreciation on the capital assets should be recorded.
7. Question : (TCO E) King City receives a trust donation for the
purpose of maintaining flower in city parks, but the donor does not make a
specification as to how the principal must be maintained. This type of trust
should be appropriately accounted for which of the following fund?
Student Answer: General Fund
Permanent Fund
Special Revenue Fund
Permanent Fund
8. Question : (TCO E) Which fund type is the interest on Long Term Debt
typically not accrued; however, it is recognized as an expenditure in the year
in which interest is legally due?
Student Answer: Debt Service Fund
Pension Trust Fund
Internal Service Fund
Enterprise Fund
9. Question : (TCO E) Which of the following funds or activities general
journals would it be inappropriate to record depreciation of capital assets?
Student Answer: Capital Projects Fund
Governmental Activities
Internal Service Fund
Business-type activities
Points Received: 5 of 5
Comments:
10. Question : (TCO D) Under GASB Statement No. 33, when would a special
revenue fund be considered to have satisfied the eligibility requirement of a
reimbursement type federal grant?
Student Answer: Only as the work is completed for a project.
When the work has started for the project.
Only after the work is completely finished
for the project.
When a plan for the use of the funds has been
developed and approved by the appropriate personnel.
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1. Question : (TCO E) You are in a staff meeting with the city
controller and one of your colleagues was quoted as follows: “Capital projects
funds are established by a government to account for all plant or equipment
acquired by construction.” Do you agree with this statement? Why or why not?
2. Question : (TCOs A and B) What are fiduciary funds? Please identify
and explain the two main types and what is the main difference between the
funds?
3. Question : (TCO D) The City of Norton received a gift of $3,500,000
from a group of local residents on April 1, 2012 and signed an agreement that
the funds would be invested on a permanent basis and the income would be used
to purchase artifacts for the city museum. The following transactions took
place during the fiscal year ended Dec 31, 2012.
a. The gift was recorded on the books on April 1.
b. On April 1, 2012, the Calvin Co. bonds were purchased in
the amount of $3,000,000, at par. The
bonds carry an annual interest rate of 5 percent, payable semiannually on
October 1 and April 1. The city also purchased a certificate with a face value
of $250,000 pays interest of 4 percent on semiannually on October 1 and April
1.
c. On October 1, the semiannual interest was received on the
bonds and certificate of deposit.
d. From October 1 through December 1, payments were made
totaling $85,000 to purchase artifacts for the city museum.
e. On December 31, an accrual was made for interest for the
bonds and the certificate of deposit.
f. After a review of
the bond market on December 31, 2012, the bonds had a market value of
$2,979,000, exclusive of accrued interest.
g. The books were closed on December 31.
Required
a. Record the transactions on the books for Calvin Co.
Museum Endowment Fund.
b. Prepare a Statement of Revenues, Expenditures, and
Changes in Fund Balance for the Calvin Co. Museum Endowment Fund for the year
ended December 31, 2012.
c. Prepare the Balance Sheet for the Calvin Co. Museum
Endowment Fund for the year ended December 31, 2012.
