Multiple Choice. Choose the best answer.
1. Which of the following best describes the recommended format for the government-wide statement of activities?
a. Revenues minus expenses equals change in net assets.
b. Revenues minus expenditures equals change in net assets.
c. Program revenues minus expenses minus general revenues equals changes in net assets.
d. Expenses minus program revenues minus general revenues equals change in net assets.
2. Expenses that are specifically identified with a program or function are reported in the government-wide statement of activities as:
a. Specific expenses.
b. Direct expenses.
c. Incremental expenses.
d. Program expenses.
3. An extraordinary item differs from a special item in that an extraordinary item is:
a. Reported on a separate line below General Revenues.
b. Within management’s control.
c. Both unusual in nature and infrequent in occurrence.
d. Either unusual in nature or infrequent in occurrence.
4. Which of the following neither increases nor decreases fund balance of the General Fwd during the current period?
a. Deferred revenues.
b. Revenues.
c. Expenditures.
d. Other financing sources.
5. One characteristic that distinguishes other financing sources from revenues is that other financing sources:
a. Arise from debt issuances or interfund transfers in.
b. Increase fund balance when they are closed at year-end.
c. Provide financial resources for the recipient fund.
d. Have a normal credit balance.
6. Under the modified accrual basis of accounting, expenditures generally are not recognized until:
a. They are paid in cash.
b. An obligation is incurred that will be paid from currently available financial resources.
c. Goods or services are ordered.
d. They are approved by the legislative body.
7. According to GASB standards, expenditures are classified by:
a. Fund, function or program, organization unit, source, and character.
b. Fund, function or program, organization unit, activity, character, and object.
c. Fund, appropriation, organization unit, activity, character, and object.
d. Fund, organization unit, encumbrance, activity, character, and object.
8. Under GASB requirements for external financial reporting, one would find the budgetary comparison schedule (or statement) in the:
a. Required supplementary information (RSI).
b. Basic financial statements.
c. Either a or b, as elected by the government.
d. Neither a nor b.
9. If supplies that were ordered by a department financed by the General Fund are received at an actual price that is less than the estimated price on the purchase order, the department’s available balance of appropriations for supplies will be:
a. Decreased.
b. Increased.
c. Unaffected.
d. Either a or b, depending on the department’s specific budgetary control procedures.
10. Spruce City’s finance department recorded the recently adopted General Fund budget at the beginning of the current fiscal year. The budget approved estimated revenues of $1,000,000 and appropriations of $1,100,000. Which of the following is the correct journal entry to record the budget?
Debits Credits
a. Appropriations......... 1,100,000
Budgetary Fund Balance...... 100,000
Estimated Revenues....... 1,000,000
b. Revenues Receivable...... 1,000,000
Budgetary Deficit........ 100,000
Appropriations......... 1,100,000
c. Estimated Revenues....... 1,000,000
Budgetary Fund Balance..... 100,000
Appropriations........ 1,100,000
d. Memorandum entry only.