Select the best answer.

1. Upon ordering supplies a government should

a. Debit encumbrances and credit reserve for encumbrances

b. Debit reserve for encumbrances and credit encumbrances

c. Debit expenditures and credit encumbrances

d. Debit expenditures and credit vouchers payable

2. Upon receiving supplies that had previously been

encumbered a government should

a. Debit reserve for encumbrances and credit encumbrances

b. Debit fund balance and credit reserve for encumbrances

c. Debit fund balance and credit expenditures

d. Debit reserve for encumbrances and credit expenditures

3. Upon closing the books at year-end a government

should

a. Debit fund balance and credit reserve for encumbrances

b. Debit encumbrances and credit reserve for encumbrances

c. Debit fund balance and credit encumbrances

d. Debit reserve for encumbrances and credit encumbrances

4. A government requires that all appropriations lapse

at the end of a year. At the end of Year 1 that

government has $100,000 of goods and services

on order. At the start of Year 2 the government

should

a. Debit fund balance and credit encumbrances

b. Debit reserve for encumbrances and credit encumbrances

c. Debit encumbrances and credit reserve for encumbrances

d. Debit encumbrances and credit fund balance

5. Which of the following accounts would a government

be most likely to debit as part of its year-end closing

process?

a. Appropriations, encumbrances, and estimated revenues

b. Estimated revenues, appropriations, and reserve

for encumbrances

c. Revenues, appropriations, and encumbrances

d. Revenues, appropriations, and fund balance

6. A government places an order for a particular item of

equipment and encumbers $5,500. The item arrives

accompanied by an invoice for $5,200. The entries

that the government should make should include (but

not necessarily be limited to):

a. A debit to expenditures for $5,200, a debit to

fund balance for $300, and a credit to reserve for

encumbrances for $5,500

b. A debit to expenditures for $5,200, a credit to

encumbrances for $5,200, and a credit to accounts

payable for $5,200

c. A debit to expenditures for $5,200, a credit to

encumbrances for $5,500, and a credit to accounts

payable for $5,200

d. A debit to expenditures for $5,200, a credit to

reserve for encumbrances for $5,200, and a credit

to accounts payable for $5,200

7. A primary virtue of an object classification budget is

that it

a. Covers a period of more than one year

b. Facilitates control by establishing detailed spending

mandates

c. Shows the impact on the budget of various possible

levels of output

d. Relates inputs to measurable outcomes

8. Per GASB Statement No. 34, governments must

a. Prepare a general fund budget on a cash basis

b. Prepare a general fund budget on a modified

accrual basis

c. Prepare a schedule that reconciles any differences

between amounts reported on a GAAP basis and a

budgetary basis

d. Prepare a schedule that reconciles any differences

between the original budget and the amended

budget

9. The amount that a government has available to spend

for a particular purpose in a particular year would be

indicated by

a. Encumbrances minus the sum of appropriations,

expenditures, and net adjustments

b. Reserve for encumbrances plus appropriations

minus the sum of expenditures and net adjustments

c. Appropriations plus encumbrances minus the sum

of expenditures and net adjustments

d. Appropriations minus the sum of expenditures,

encumbrances, and net adjustments

10. For which of the following funds would a government

be least likely to record its annual budget and thereby

integrate it into its accounting system?

a. General fund

b. Special revenue fund

c. Capital project fund

d. Enterprise fund