Multiple Choice Questions 1. Which fund balance category is affected by having inventory and prepaid items at

Question:

Multiple Choice Questions
1. Which fund balance category is affected by having inventory and prepaid items at year-end?
a. Assigned fund balance
b. Committed fund balance
c. Nonspendable fund balance
d. Unassigned fund balance

2. Which fund balance category may be increased by encumbrances outstanding?
a. Assigned fund balance
b. Nonspendable fund balance
c. Restricted fund balance
d. Unassigned fund balance

3. The fund balance category that requires formal action of the highest level decision-making body of a government is
a. Assigned fund balance.
b. Committed fund balance.
c. Nonspendable fund balance.
d. Restricted fund balance.

4. The fund balance classifications are described as reflecting a hierarchy of constraints on resource use. From the most constrained to the least constrained, what is the order of the hierarchy?
a. Unassigned, Assigned, Committed, Restricted, Nonspendable
b. Restricted, Committed, Assigned, Unassigned, Nonspendable
c. Nonspendable, Restricted, Committed, Assigned, Unassigned
d. Restricted, Nonspendable, Committed, Assigned, Unassigned

5. The fund balance category that can have either a positive or a negative balance is
a. Assigned fund balance.
b. Committed fund balance.
c. Nonspendable fund balance.
d. Unassigned fund balance.

6. The fund balance category used to reflect a positive residual of assets less liabilities in any fund other than the General Fund is
a. Assigned fund balance.
b. Committed fund balance.
c. Nonspendable fund balance.
d. Restricted fund balance.

GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...