choice the correct answer

QUESTION 1

Based on modified accrual accounting, how is the following transaction recorded from the city's perspective at time the payment is received? A city has a contract to provide services for a school district. The city has not provided the services but receives a payment from the school district for $2,000. The city expects to perform the services this fiscal year.

		Increase cash $2,000; increase revenues $2,000
		Increase cash $2,000; increase deferred revenue $2,000
		Increase cash $2,000; increase expenses $2,000
		Increase deferred revenue $2,000; no offsetting entry until next fiscal year
		No transaction

QUESTION 2

Based on FULL accrual accounting, how is the following transaction recorded from the city's perspective at time the payment is received? A city has a contract to provide services for a school district. The city has not provided the services but receives a payment from the school district for $2,000. The city expects to perform the services this fiscal year.

		Increase cash $2,000; increase revenues $2,000
		Increase cash $2,000; increase deferred revenue $2,000
		Increase cash $2,000; increase expenses $2,000
		Increase deferred revenue $2,000; no offsetting entry until next fiscal year
		No transaction

QUESTION 3

Based on modified accrual accounting, how would the following transaction be recorded from the city's perspective? A city receives notice from a large foundation that they will receive a $6 million grant. $2 million will be paid out at the end of the current year, $2 million at the end of the next fiscal year, and $2 million at the end of the following fiscal year. How is the event recorded at time the grant is received?

		Increase grants receivable $6 million; increase revenues $6 million
		Increase grants receivable $6 million; increase deferred inflow $6 million
		Increase grants receivable $6 million; increase revenues $2 million; increase deferred inflow $4 million
		No transaction until the first disbursement

QUESTION 4

Based on FULL accrual accounting, how would the following transaction be recorded from the city's perspective? A city receives notice from a large foundation that they will receive a $6 million grant. $2 million will be paid out at the end of the current year, $2 million at the end of the next fiscal year, and $2 million at the end of the following fiscal year. How is the event recorded at time the grant is received?

		Increase grants receivable $6 million; increase revenues $6 million
		Increase grants receivable $6 million; increase deferred inflow $6 million
		Increase grants receivable $6 million; increase revenues $2 million; increase deferred inflow $4 million
		No transaction until the first disbursement

QUESTION 5

Which of the following funds is reported in full accrual in state and local governments?

		General Fund
		Special Revenue Funds
		Enterprise Funds
		Debt Service Funds
		Capital Projects Funds
		All the funds in state and local governments are in full accrual
		None of the funds in state and local governments are in full accrual

QUESTION 6

Which fund uses modified accrual in nonprofit organizations?

		General Fund
		Program Funds
		Endowment Funds
		Capital Projects Funds
		None of the funds in nonprofits are in modified accrual
		All of the funds in nonprofits are in modified accrual

QUESTION 7

When a wealthy patron donates a large amount of money to a nonprofit organization and stipulates that the recipients must invest the donation in an endowment fund and can only use the accrued interest to pay for operating expenses, the donation will change which of the following accounts?

		Unspendable fund balance
		Unrestricted net assets
		Temporarily restricted net assets
		Permanently restricted net assets

QUESTION 8

A local soup kitchen benefits from a large amount of donated service. Which of the following services provided by a local attorney could be recognized on its financial statements?

		Drafting conflict of interest documents for new board members
		Serving food to the homeless
		All the above would affect the financial statements
		None of the above would affect the financial statements