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Which statement is not correct?
Governmental funds account for expenditures of financial resources rather than matching revenues and expenses.
The Fund Balance Reserved for Encumbrances account is not closed at the end of a fiscal year.
Revenues from licenses and permit fees are recognized when received in cash if using the modified accrual basis of accounting for governmental funds.
A fund is an independent accounting entity composed of cash and other financial resources, segregated for the purpose of carrying on specific activities and objectives.
Commitments for purchase orders are recorded as expenses.
2.
When a city received a federal grant for books to be purchased for a library, the money should have been recorded in
The Permanent Fund.
an Expendable Trust Fund.
a Capital Projects Fund.
an Agency Fund.
a Special Revenue Fund.
3.
Which statement is false regarding the Statement of Revenues, Expenditures, and Changes in Fund Balance when it is included with government-wide financial statements?
The Statement of Revenues, Expenditures, and Changes in Fund Balance uses the modified accrual method for timing purposes.
The Statement of Revenues, Expenditures, and Changes in Fund Balance presents revenues as either program revenues or general revenues.
A presentation reconciles the change in governmental fund balance to the change in net assets for governmental activities.
Other financing sources are presented on the Statement of Revenues, Expenditures, and Changes in Fund Balance.
All nonmajor funds are combined and reported together.
4.
A five-year lease is signed by the City of Wachovia for equipment with a seven-year life. The asset will be returned to the lessor at the end of the lease. The present value of the lease is $20,000, and annual payments of $5,411.41 are payable beginning on the date the lease is signed. The interest portion of the second payment is $1,604.75. The equipment is to be used in City Hall and was purchased from appropriated funds of the General Fund.
What should be recorded in the General Fund on the date the lease is signed?
Entry A.
Entry B.
Entry C.
Entry D.
Entry E.
5.
If the total acquisition value of an acquired not-for-profit organization is greater than the fair value of all identifiable net assets of the organization, and that organization’s revenues are not earned by dues or other types of earned revenues, then the excess of acquisition value over identifiable net assets is immediately reported:
As goodwill on the consolidated balance sheet.
As a pro-rata increase to the identifiable assets and liabilities acquired.
As a direct reduction in unrestricted net assets on the balance sheet.
As a reduction in unrestricted net assets on the statement of activities.
As an increase in other assets on the balance sheet.
6.
Which of the following types of health care organizations follow FASB Accounting Standards Codification for GAAP?
Entry A.
Entry B.
Entry C.
Entry D.
Entry E.
7.
What is normally required before a reorganization plan can be implemented?
The plan must be presented by the company and confirmed by the court.
The plan must be approved by each class of creditors and each class of stockholders, and confirmed by the court.
The plan must be presented by the company, approved by two-thirds of each class of stockholders, and confirmed by the court.
The plan must be presented by the company, approved by three-fourths of each class of stockholders, and confirmed by the court.
The plan must be approved by two-thirds of each class of creditors, approved by two-thirds of each class of stockholders, and confirmed by the court.
8.
Assuming all of the following expenses have priority, in what order are they prioritized?
Administrative expenses, employee claims for wages, unpaid taxes, claims for the return of customer deposits.
Employee claims for wages, unpaid taxes, administrative expenses, claims for the return of customer deposits.
Unpaid taxes, administrative expenses, employee claims for wages, return of customer deposits.
Administrative expenses, employee claims for wages, claims for the return of customer deposits, unpaid taxes.
Unpaid taxes, return of customer deposits, employee claims for wages, administrative expenses.
9.
What are the goals of probate laws?
(1) Gather and preserve all of the decedent’s property;
(2) Carry out an orderly and fair settlement of all debts;
(3) Discover and follow the decedent’s intent for the remaining property
1 only.
2 only.
3 only.
1 and 2.
1, 2, and 3.
10.
A gift that is specified in a will as “I leave $5,000 in cash to my son” is a
general legacy.
specific legacy.
demonstrative legacy.
residual legacy.
devise.