Question

Multiple Choice Questions
Assume that Nolanville’s fiscal year ends on December 31, and answer the following questions: 1. Nolanville’s payroll for one of its departments is $15,000 per week. It pays its employees on the Thursday of the week following that in which the wages and salaries are earned. In 2012, December 31 fell on a Monday. For the work week beginning Monday, December 31, 2012, and ending Friday, January 4, 2013, employees were paid on Thursday, January 10, 2013. For fiscal year 2012, what amount should the city recognize as wage and salary expenditure/expense pertaining to the week ending Friday, January 4, 2013, in its fund statements and its government wide statements?
Fund Statements Statements Government-Wide
a. $ 0................................................... $ 0
b. $3,000................................................... $ 3,000
c. $ 0................................................... $ 3,000
d. $3,000................................................... $ 0
2. In its fund financial statements, the city would recognize the receipt of a new computer (to be used for general administrative purposes), ordered the previous year, as an
a. encumbrance
b. expense
c. expenditure
d. asset
3. In 2012, city employees earned $1.4 million in sick leave. The city estimates that of this amount, $0.8 million will actually be paid to employees who take sick leave. Of the balance, $0.1 million will be paid to employees upon their retirement or resignation, and $0.5 million will not have to be paid (since employees are limited in the number of sick days that they can carry over from one year to the next). The amount that the city should add to a fund-statement liability account as of year-end 2012 is
a. $0
b. $0.1 million
c. $0.8 million
d. $0.9 million
4. Assume the same facts as in question 3. The amount that the city should add to a government wide statement liability account as of year-end 2012 is
a. $0
b. $0.1 million
c. $0.8 million
d. $0.9 million
5. In 2012 city employees earned $3.6 million in vacation pay that they did not use during the year. The city estimates that of this amount, $2.8 will be paid in 2013 (out of amounts budgeted for that year), $0.6 will be paid in subsequent years, and the balance of $0.2 will not have to be paid. The amount that the city should add to a fund-statement liability account as of year-end 2012 is
a. $0
b. $2.8 million
c. $3.4 million
d. $3.6 million
6. Assume the same facts as in question 5. The amount that the city should add to a government-wide statement liability account as of year-end 2012 is
a. $0
b. $2.8 million
c. $3.4 million
d. $3.6 million
7. Nolanville starts fiscal 2012 with $25,000 in supplies. During the year it orders $180,000 in supplies, receives $170,000, and uses $190,000. It accounts for inventories on the purchases basis. In its 2012 governmental fund financial statements, it should report
Expenditure Non-spendable Fund Balance
a. $180,000................................................ $ 0
b. $170,000................................................ $5,000
c. $190,000................................................. $ 0
d. $190,000................................................. $5,000
8. Assume the same facts as in question 7. The 2012 government-wide financial statements should report
Expense Restricted Net Assets
a. $170,000..................................... $ 0
b. $170,000..................................... $ 15,000
c. $190,000..................................... $ 0
d. $190,000..................................... $ 15,000
9. On December 1, 2012, Nolanville issued $10 million of 30-year, 8% bonds for $9.78 million, a price that reflects a semiannual yield of 4.1%. Interest ($400,000 per semiannual period) is payable on May 31 and November 30, beginning May 31, 2013. In its 2012 fund and government-wide statements, Nolanville should report an interest expenditure/expense of
Fund Statements Statements Government-Wide
a. $ 0....................................... $ 0
b $ 66,667....................................... $ 66,667
c. $ 66,830...................................... $ 66,830
d. $ 0..................................... $ 66,830
10. In May 2015, Nolanvillere paid $2 million of the bonds that it had issued in 2012. In its 2015 fund and government-wide statements, Nolanville should report an expenditure/expense relating to the repayment of the bonds of
Fund Statements Statements Government-Wide
a. $ 0................................ $ 0
b. $ 2 million................................ $ 0
c. $ 0................................ $ 2 million
d. $ 2 million................................ $ 2 million


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  • CreatedApril 29, 2015
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