Multiple Choice Questions 1. New York State has unlimited authority to control and regulate Yonkers, New York,

Question:

Multiple Choice Questions
1. New York State has unlimited authority to control and regulate Yonkers, New York, as well as all other municipalities within its jurisdiction. Consistent with GASB Statement No. 14,
a. Both New York State and Yonkers could be considered primary governments
b. Only New York State could be considered a primary government
c. Yonkers could be considered a primary government only if the State has explicitly passed legislation ceding key fiscal controls to local governments, such as Yonkers
d. Yonkers could be considered a primary government only if the State opts not to account for Yonkers as a component unit
2. Which of the following is not a power that a municipality must have in order to be considered fiscally independent of other governments?
a. To determine its budget
b. To levy taxes and set rates
c. To establish debt limitations
d. To issue bonds
3. Carson City appoints a voting majority of the Carson City Housing Authority’s governing board. Which of the following additional criteria is not sufficient evidence that Carson City is financially accountable for the Carson City Housing Authority?
a. The mayor of Carson City must approve the Housing Authority’s budget.
b. Two of the five members of the Housing Authority’s governing board are also members of the Carson City council.
c. Carson City guarantees any debt incurred by the Housing Authority.
d. The Carson City council can appoint the managing director of the Housing Authority.
4. The Sierra Library District satisfies the criteria to be blended into the of Sierra County. Which of the following fund types of the two governments is not combined in the blended statements?
a. Fiduciary funds
b. General funds
c. Permanent funds
d. Proprietary funds
5. A primary government can ‘‘blend’’ its with those of a component unit as long as
a. The governing boards of the two governments are substantively the same
b. There is a financial benefit/burden relationship between the two governments
c. The primary government provides services exclusively to the component unit
d. The two governments satisfy GASB Statement No. 14 criteria for ‘‘economic inseparability’’
6. With respect to a non-major component unit, a government
a. Must disclose key financial data about the unit in either the them- selves or in notes thereto
b. Must, in its combining fund statements, present detailed of the unit in a separate column
c. May, in its government-wide statements, exclude data pertaining to the unit from its component units column
d. Is not required to provide even summary financial data of the individual unit
7. Which of the following is incorrect with respect to a joint venture?
a. It must be reported as a component unit of each government that has an interest of 20% or more in the venture.
b. It may be accounted for in a proprietary fund on the equity basis.
c. It may be reported in a schedule of capital assets.
d. It must be accounted for in government-wide statements on an equity basis.
8. A related organization
a. Must be reported in the combining statements of the government to which it is related, but must not be incorporated into the government-wide statements of that government
b. May be reported as a component unit of the reporting government to which it is related if the reporting government so elects
c. Must be described in notes to the of the reporting government to which it is related but must not be incorporated into the of that government
d. May either be described in notes to the of the reporting government to which it is related or be incorporated into the of that government.
9. The James City school system, although not a separate legal entity, maintains its own set of financial records. It is administered by a board, the members of which are appointed by the James City mayor. The system receives 70% of its funds from city appropriations and the balance from state and federal grants. The James City council has the authority to approve the school system’s budget and to veto any decisions of its administering board. James City
a. Should account for the system as a component unit and blend its with its own
b. Should account for the system as a component unit and report it ‘‘discretely’’
c. Should account for, and report, the system as it does other city departments
d. Should account for the system as a component unit only if the system does not prepare its own stand-alone If a primary government has several component units, none of which satisfies the criteria for blending, in its government-wide statements, it a. must report governmental-type units in one column and business-type units in another
b. Must combine all component units into a single column
c. Must present each major component unit in a separate column but may combine all non-major component units into a single column
d. Must incorporated at a of all component units, whether major or non-major, into one or more columns
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...