Accrual Accounting Quiz
Chapter 3 Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority
True/False Questions
1. The term, Fund Balance, is used to indicate the residual net assets of a proprietary fund.
Answer: False
2. Net resources of a governmental fund represented by currently due taxes receivable is an example of a nonspendable fund balance
Answer: False
3. Net resources of a governmental fund represented by prepaid insurance is an example of a nonspendable fund balance
Answer: True
4. $200,000 to be used to fund government operations in the future from the General Fund is an example of an unassigned fund balance.
Answer: True
5. Outstanding encumbrance of $80,000 for the purchase of furniture …show more content…
Expenditure is a decrease in fund financial resources (net of liabilities) other than through interfund transfers.
Answer: True
53. Modified accrual accounting records encumbrances when goods are ordered and accrual accounting only records a liability only when goods are received.
Answer: True
54. Revenues for governmental funds should be recognized when measurable and available for expenditure in the current period.
Answer: True
55. When purchase orders are filled and the invoice amount differs from the estimated amount, the amount recorded as an expenditure corresponds to the invoice amount.
Answer: True
56. When purchase orders are filled and the invoice amount differs from the estimated amount, the amount reversed from the encumbrance account equals the invoice amount.
Answer: False
57. Governments may create special revenue funds whenever a tax or other revenue source is legislated to be used for a specific purpose, other than capital assets or debt service.
Answer: True
58. GASB requires a reconciliation between the amount shown as GAAP expenditures in the basic financial statements and the amount shown in the budgetary comparison schedule.
Answer: …show more content…
According to GASB Statement No. 54, spendable fund balances are displayed in which of the following categories?
A) Restricted, Unrestricted, Assigned, Unassigned
B) Restricted, Committed, Assigned, Unassigned
C) Spendable, Assigned, Unassigned
D) Restricted, Unrestricted
Answer: B
80. Which of the following statements is not true with respect to GASB Statement No. 54 regarding restricted fund balances?
A) Restricted funds are those that are subject to constraints imposed by external parties or by law.
B) Restricted fund balance can result from legally enforceable requirements that resources be used only for specific purpose.
C) Restricted funds are the result of a self-imposed constraint by a government upon itself.
D) All of the above are correct
Answer: C
81. Which of the following statements is correct with respect to GASB Statement No. 54 regarding committed funds?
A) Committed funds are those that are designated as committed through ordinance or resolution by the government’s highest level of authority.
B) These constraints are easily changed by administrators.
C) This is constraint is imposed by law and may not be changed without amendment of the
True/False Questions
1. The term, Fund Balance, is used to indicate the residual net assets of a proprietary fund.
Answer: False
2. Net resources of a governmental fund represented by currently due taxes receivable is an example of a nonspendable fund balance
Answer: False
3. Net resources of a governmental fund represented by prepaid insurance is an example of a nonspendable fund balance
Answer: True
4. $200,000 to be used to fund government operations in the future from the General Fund is an example of an unassigned fund balance.
Answer: True
5. Outstanding encumbrance of $80,000 for the purchase of furniture …show more content…
Expenditure is a decrease in fund financial resources (net of liabilities) other than through interfund transfers.
Answer: True
53. Modified accrual accounting records encumbrances when goods are ordered and accrual accounting only records a liability only when goods are received.
Answer: True
54. Revenues for governmental funds should be recognized when measurable and available for expenditure in the current period.
Answer: True
55. When purchase orders are filled and the invoice amount differs from the estimated amount, the amount recorded as an expenditure corresponds to the invoice amount.
Answer: True
56. When purchase orders are filled and the invoice amount differs from the estimated amount, the amount reversed from the encumbrance account equals the invoice amount.
Answer: False
57. Governments may create special revenue funds whenever a tax or other revenue source is legislated to be used for a specific purpose, other than capital assets or debt service.
Answer: True
58. GASB requires a reconciliation between the amount shown as GAAP expenditures in the basic financial statements and the amount shown in the budgetary comparison schedule.
Answer: …show more content…
According to GASB Statement No. 54, spendable fund balances are displayed in which of the following categories?
A) Restricted, Unrestricted, Assigned, Unassigned
B) Restricted, Committed, Assigned, Unassigned
C) Spendable, Assigned, Unassigned
D) Restricted, Unrestricted
Answer: B
80. Which of the following statements is not true with respect to GASB Statement No. 54 regarding restricted fund balances?
A) Restricted funds are those that are subject to constraints imposed by external parties or by law.
B) Restricted fund balance can result from legally enforceable requirements that resources be used only for specific purpose.
C) Restricted funds are the result of a self-imposed constraint by a government upon itself.
D) All of the above are correct
Answer: C
81. Which of the following statements is correct with respect to GASB Statement No. 54 regarding committed funds?
A) Committed funds are those that are designated as committed through ordinance or resolution by the government’s highest level of authority.
B) These constraints are easily changed by administrators.
C) This is constraint is imposed by law and may not be changed without amendment of the