Question

Multiple Choice Questions
1. An accountant is trying to determine whether the school system of the City of Abraham is fiscally independent. Which of the following is not a requirement for being deemed fiscally independent?
a. Holding property in its own name.
b. Issuing bonded debt without outside approval.
c. Passing its own budget without outside approval.
d. Setting taxes or rates without outside approval.

2. An employment agency for individuals with disabilities works closely with the City of Hanover. The employment agency is legally separate from the city but still depends on it for financial support, which leads to a potential financial burden for the city. How should Hanover report the employment agency in its comprehensive annual financial report?
a. Not at all because the agency is legally separate.
b. As a part of the general fund.
c. As a component unit.
d. As a related organization.

3. The City of Bacon is located in the County of Pork. The city has a school system and reports buildings at a net $3.6 million although they are actually worth $4.2 million. The county has another school system and reports buildings at a net $5.2 million although they are actually worth $5.6 million. Both school systems are viewed as special purpose governments. If the school systems are combined in a merger, what should be reported for the buildings?
a. $8.6 million .
b. $8.8 million .
c. $9.4 million .
d. $9.8 million .

4. For component units, what is the difference in discrete presentation and blending?
a. A blended component unit is shown to the left of the statements; a discretely presented component unit is shown to the right.
b. A blended component unit is shown at the bottom of the statements; a discretely presented component unit is shown within the statements like a fund.
c. A blended component unit is shown within the statements like a fund; a discretely presented component unit is shown to the right.
d. A blended component unit is shown to the right of the statements; a discretely presented component unit is shown in completely separate statements.

5. A government reports that its public safety function had expenses of $900,000 last year and program revenues of $200,000 so that its net expenses were $700,000. On which financial statement is this information presented?
a. Statement of activities.
b. Statement of cash flows.
c. Statement of revenues and expenditures.
d. Statement of net position.

6. Government-wide financial statements make a distinction between program revenues and general revenues. How is that difference shown?
a. Program revenues are offset against the expenses of a specific function; general revenues are assigned to governmental activities and business-type activities in general.
b. General revenues are shown at the top of the statement of revenues and expenditures; program revenues are shown at the bottom.
c. General revenues are labeled as operating revenues; program revenues are shown as miscellaneous income.
d. General revenues are broken down by type; program revenues are reported as a single figure for the government.

7. Which of the following is true about the statement of cash flows for the proprietary funds of a state or local government?
a. The indirect method of reporting cash flows from operating activities is allowed although the direct method is recommended.
b. The structure of the statement is virtually identical to that of a for-profit business.
c. The statement is divided into four separate sections of cash flows.
d. Amounts spent on capital assets are reported in a separate section from amounts raised to finance those capital assets.

8. Which of the following is most likely to be true about the financial reporting of a public college or university?
a. It resembles the financial reporting of private colleges and universities.
b. It will continue to use its own unique style of financial reporting.
c. It resembles the financial reporting made by a proprietary fund within the fund financial statements for a state or local government.
d. It will soon be reported using a financial statement format unique to the needs of public colleges and universities that GASB is scheduled to create.



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  • CreatedJanuary 08, 2015
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