State and Local Governments - CPA Financial Accounting and Reporting (FAR)
Card 1 of 96
The city of Abernathy's internal service fund estimates revenues and expenses at the beginning of each year. In Year 2, Abernathy estimates revenues for the year of $2 million and estimates expenses for the year of $1.7 million. What will be the balance in the budgetary control account at the beginning of the year?
The city of Abernathy's internal service fund estimates revenues and expenses at the beginning of each year. In Year 2, Abernathy estimates revenues for the year of $2 million and estimates expenses for the year of $1.7 million. What will be the balance in the budgetary control account at the beginning of the year?
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Internal service funds do not use budgetary accounting; budgetary accounting is used by governmental funds.
Internal service funds do not use budgetary accounting; budgetary accounting is used by governmental funds.
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Which basis of accounting is required for a city's government wide financial statements?
Which basis of accounting is required for a city's government wide financial statements?
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The government wide financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting.
The government wide financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting.
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What is the measurement focus and the basis of accounting for the government wide financial statements?
What is the measurement focus and the basis of accounting for the government wide financial statements?
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The government wide financial statements use both the economic resources focus and accrual accounting.
The government wide financial statements use both the economic resources focus and accrual accounting.
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Taxes levied on citizens for infrastructure improvements should be reported in:
Taxes levied on citizens for infrastructure improvements should be reported in:
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Program revenues would include charges for services and grants. Nonexchange revenues for governmental activities are general revenues.
Program revenues would include charges for services and grants. Nonexchange revenues for governmental activities are general revenues.
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Which of the following would be reported as program revenues on a local government's government wide statement of activities?
Which of the following would be reported as program revenues on a local government's government wide statement of activities?
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For a local government's government wide statement of activities, charges for services are reported as program revenue.
For a local government's government wide statement of activities, charges for services are reported as program revenue.
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Internal service funds, while being proprietary funds, are reported under which at the government wide level?
Internal service funds, while being proprietary funds, are reported under which at the government wide level?
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When the consolidation of governmental financial statements are complete, the internal service funds are displayed under governmental activities rather than proprietary.
When the consolidation of governmental financial statements are complete, the internal service funds are displayed under governmental activities rather than proprietary.
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Golden City levies a real estate tax. In Year 1, the city expects to collect $400,000 between January 1, Year 2, and March 15, Year 2. It expects to collect $160,000 per month in January and February, and an additional $80,000 in March. The city's policy is that money collectible within 60 days is considered available. How much of the revenue should be recognized in Year 1 in the fund financial statements?
Golden City levies a real estate tax. In Year 1, the city expects to collect $400,000 between January 1, Year 2, and March 15, Year 2. It expects to collect $160,000 per month in January and February, and an additional $80,000 in March. The city's policy is that money collectible within 60 days is considered available. How much of the revenue should be recognized in Year 1 in the fund financial statements?
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At the end of Year 1, the city will only recognize the revenue it expects to collect within the next 60 days. This includes January and February, so Year 1 revenue will include $160K for January + $160K for February.
At the end of Year 1, the city will only recognize the revenue it expects to collect within the next 60 days. This includes January and February, so Year 1 revenue will include $160K for January + $160K for February.
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The city of Hammond opened a landfill at the beginning of Year 1, which is expected to take 10 years to fill. At the end of Year 1, the land full is 8% full and the estimated current closures costs are $150,000. At the end of Year 2, the landfill is currently 20% full and the estimated closure costs are $200,000. The city does not charge a fee to use the landfill and thus reports it in the general fund. What amount of expenditures should be reported in Year 2 in the fund-based financial statements in connection with the closure of the landfill?
The city of Hammond opened a landfill at the beginning of Year 1, which is expected to take 10 years to fill. At the end of Year 1, the land full is 8% full and the estimated current closures costs are $150,000. At the end of Year 2, the landfill is currently 20% full and the estimated closure costs are $200,000. The city does not charge a fee to use the landfill and thus reports it in the general fund. What amount of expenditures should be reported in Year 2 in the fund-based financial statements in connection with the closure of the landfill?
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Nothing is recorded for closure costs in the fund financial statements because no current economic resources were used for closing the landfill. A liability would be recorded in the government-wide statements because the focus in those statements is on both current and non-current resources.
Nothing is recorded for closure costs in the fund financial statements because no current economic resources were used for closing the landfill. A liability would be recorded in the government-wide statements because the focus in those statements is on both current and non-current resources.
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The fire department of Forbes Township purchased a new fire truck on January 1, Year 1. Fund-based financial statements are being produced for Year 1 that include the fire department in the general fund. Which of the following statements is true?
The fire department of Forbes Township purchased a new fire truck on January 1, Year 1. Fund-based financial statements are being produced for Year 1 that include the fire department in the general fund. Which of the following statements is true?
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The focus of the fund financial statements is current financial resources, and recording depreciation will not impact current financial resources. Thus, the purchase of the car will be reflected in the fund statements, but the depreciation will only be recorded in the government-wide statements, which includes non-current resources as well as current resources.
The focus of the fund financial statements is current financial resources, and recording depreciation will not impact current financial resources. Thus, the purchase of the car will be reflected in the fund statements, but the depreciation will only be recorded in the government-wide statements, which includes non-current resources as well as current resources.
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If a primary government's general fund has an equity interest in a joint venture, all or a portion of this equity interest should be reported in the:
If a primary government's general fund has an equity interest in a joint venture, all or a portion of this equity interest should be reported in the:
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The portion of the equity interest in the joint venture that represents the government's investment in the net position of the venture is recorded in the government wide statement of net position.
The portion of the equity interest in the joint venture that represents the government's investment in the net position of the venture is recorded in the government wide statement of net position.
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During the current year, a city spends $5 million to construct a new highway. The highway will be a toll road that can only be used by paying a fee. What is the difference between the fund-based financial statements and the government-wide financial statements in regards to the reporting of this $5 million outflow?
During the current year, a city spends $5 million to construct a new highway. The highway will be a toll road that can only be used by paying a fee. What is the difference between the fund-based financial statements and the government-wide financial statements in regards to the reporting of this $5 million outflow?
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Because users of the road must pay a fee, the road is accounted for as an enterprise fund. Enterprise funds are accounted for the same way (that is, using standard accrual accounting) in both the fund statements and the government-wide statements.
Because users of the road must pay a fee, the road is accounted for as an enterprise fund. Enterprise funds are accounted for the same way (that is, using standard accrual accounting) in both the fund statements and the government-wide statements.
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Harrison County is currently preparing its government-wide financial statements. The Harrison Public Airport is legally separate from the county but is viewed as a component unit because the county appoints a majority of the commission and has guaranteed certain debts held by the airport. In Harrison County's government-wide financial statements, how is the information for the airport reported?
Harrison County is currently preparing its government-wide financial statements. The Harrison Public Airport is legally separate from the county but is viewed as a component unit because the county appoints a majority of the commission and has guaranteed certain debts held by the airport. In Harrison County's government-wide financial statements, how is the information for the airport reported?
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Component units must be included in the government-wide statements, but if that component is very intertwined with the government as a whole, the government can choose to present that unit separately or blended with the rest of the government.
Component units must be included in the government-wide statements, but if that component is very intertwined with the government as a whole, the government can choose to present that unit separately or blended with the rest of the government.
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The town of Harmony has a large public hospital. On its government-wide financial statements, within the statement of activities, the town has reported a net financial burden of $2 million in the past year. How is this amount determined?
The town of Harmony has a large public hospital. On its government-wide financial statements, within the statement of activities, the town has reported a net financial burden of $2 million in the past year. How is this amount determined?
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The net financial burden represents the portion of the hospital's expenses that are not covered by program revenues, directly generated by the hospital. These expenses would need to be covered by some type of general revenue and thus represent a burden to the government.
The net financial burden represents the portion of the hospital's expenses that are not covered by program revenues, directly generated by the hospital. These expenses would need to be covered by some type of general revenue and thus represent a burden to the government.
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Fixed assets donated to a governmental unit should be recorded:
Fixed assets donated to a governmental unit should be recorded:
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Donated capital assets to a governmental unit are recorded as if they had been purchased that is at estimated fair value when received.
Donated capital assets to a governmental unit are recorded as if they had been purchased that is at estimated fair value when received.
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ABC 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 position as:
ABC 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 position as:
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For the purposes of government wide financial statements, internal service funds are normally reported in the governmental activities column of the government wide statement of net position and statement of activities since they are generally established to service the governmental funds.
For the purposes of government wide financial statements, internal service funds are normally reported in the governmental activities column of the government wide statement of net position and statement of activities since they are generally established to service the governmental funds.
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The word most closely associate with "encumbrance" would be:
The word most closely associate with "encumbrance" would be:
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The concept of encumbering is essentially committing funds for use. Committed and encumbered may be used interchangeably.
The concept of encumbering is essentially committing funds for use. Committed and encumbered may be used interchangeably.
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The library of the city of Howerton has ordered new shelving units at the cost of $40,000. How is this order recorded by the city in the government-wide financial statements?
The library of the city of Howerton has ordered new shelving units at the cost of $40,000. How is this order recorded by the city in the government-wide financial statements?
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Financial commitments (such as ordering items before receiving them) are recorded in the fund financial statements as encumbrances but they are not recorded in the government-wide statements.
Financial commitments (such as ordering items before receiving them) are recorded in the fund financial statements as encumbrances but they are not recorded in the government-wide statements.
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Hamilton County purchases a new police car at an estimated cost of $20,000 on August 5, Year 1. The vehicle arrives on September 9, Year 1, with an invoice of $21,250. Hamilton County pays the vendor in full on October 3, Year 1. The journal entry for this transaction would include which of the following on August 5, Year 1?
Hamilton County purchases a new police car at an estimated cost of $20,000 on August 5, Year 1. The vehicle arrives on September 9, Year 1, with an invoice of $21,250. Hamilton County pays the vendor in full on October 3, Year 1. The journal entry for this transaction would include which of the following on August 5, Year 1?
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When the purchase is made, a debit will be made to encumbrances for the estimated price at the time of purchase.
When the purchase is made, a debit will be made to encumbrances for the estimated price at the time of purchase.
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The city of Frankford assesses a sales tax on all purchases over $40,000. On December 28, Year 1, a sale of $65,000 occurs that will result in a payment of a tax to the city of $2,400. The payment is expected to be received during March of Year 2. Assets such as investments and receivables are viewed as current if they are collectible within 60 days. How should this tax revenue be reported in the Year 1 fund financial statements?
The city of Frankford assesses a sales tax on all purchases over $40,000. On December 28, Year 1, a sale of $65,000 occurs that will result in a payment of a tax to the city of $2,400. The payment is expected to be received during March of Year 2. Assets such as investments and receivables are viewed as current if they are collectible within 60 days. How should this tax revenue be reported in the Year 1 fund financial statements?
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This sales tax assessment will not be recorded in Year 1 because it is not expected to be collected within 60 days of year-end.
This sales tax assessment will not be recorded in Year 1 because it is not expected to be collected within 60 days of year-end.
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Pattinson County is currently preparing general purpose financial statements for Year 1. Currently, they are working on fund-based financial statements for the general fund and special revenue fund. Which of the following will not be reported as assets on the balance sheet for these funds at December 31, Year 1?
Pattinson County is currently preparing general purpose financial statements for Year 1. Currently, they are working on fund-based financial statements for the general fund and special revenue fund. Which of the following will not be reported as assets on the balance sheet for these funds at December 31, Year 1?
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An encumbrance will be recorded for the machine at the time of purchase but an asset will not be recorded until the machine is received.
An encumbrance will be recorded for the machine at the time of purchase but an asset will not be recorded until the machine is received.
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