Fundamentals Of Advanced Accounting 7th Edition By Joe Hoyle – Test Bank

Chapter 11 – Accounting for State and Local Governments, Part I

Multiple Choice:

[QUESTION]
1. The Governmental Accounting Standards Board (GASB) requires state and local governments to prepare two sets of financial statements which include:
A) Fund financial statements and proprietary financial statements.
B) Proprietary financial statements and fund- based financial statements.
C) Fund financial statements and government-wide financial statements.
D) GAAP-based financial statements and government-wide financial statements.
E) Statement of net assets and statement of cash flows.
Answer: C
Learning Objective: 11-02
Topic: Financial statements―Two sets
Difficulty: 1 Easy
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Industry
AICPA: FN Measurement

[QUESTION]
2. Which group of government financial statements reports all revenues and all costs as well as all assets and liabilities of the governmental entity?
A) GAAP-based Financial Statements
B) Fund financial Statements.
C) Governmental fund financial statements.
D) Government-wide financial statements.
E) General fund financial statements.
Answer: D
Learning Objective: 11-02
Topic: Financial statements―Two sets
-02Difficulty: 1 Easy
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Industry
AICPA: FN Measurement

[QUESTION]
3. Proprietary funds are
A) Funds used to account for the activities of a government that are carried out primarily to provide services to citizens.
B) Funds used to account for a government’s ongoing activities that are similar to those operated by for-profit organizations.
C) Funds used to account for monies held by the government in a trustee or agency capacity.
D) Funds used to account for all financial resources except those required to be accounted for in another fund.
E) Funds used to account for resources that are restricted or committed for a specific purpose other than debt payments or capital projects.
Answer: B
Learning Objective: 11-04
Topic: Funds―Distinguish the categories
Difficulty: 1 Easy
Blooms: Understand
AACSB: Reflective Thinking
AICPA: BB Industry
AICPA: FN Measurement

[QUESTION]
4. Fiduciary funds are
A) Funds used to account for the activities of a government that are carried out primarily to provide services to citizens.
B) Funds used to account for a government’s ongoing organizations and activities that are similar to those operated by for-profit organizations.
C) Funds used to account for monies held by the government in a trustee or agency capacity.
D) Funds used to account for all financial resources except those required to be accounted for in another fund.
E) Funds used to account for resources that are restricted or committed for a specific purpose other than debt payments or capital projects.
Answer: C
Learning Objective: 11-04
Topic: Funds―Distinguish the categories
Difficulty: 1 Easy
Blooms: Understand
AACSB: Reflective Thinking
AICPA: BB Industry
AICPA: FN Measurement

[QUESTION]
5. Governmental funds are
A) Funds used to account for the activities of a government that are carried out primarily to provide services to citizens.
B) Funds used to account for a government’s ongoing organizations and activities that are similar to those operated by for-profit organizations.
C) Funds used to account for monies held by the government in a trustee or agency capacity.
D) Funds used to account for all financial resources except those required to be accounted for in another fund.
E) Funds used to account for resources that are restricted or committed for a specific purpose other than debt payments or capital projects.
Answer: A
Learning Objective: 11-04
Topic: Funds―Distinguish the categories
Difficulty: 1 Easy
Blooms: Understand
AACSB: Reflective Thinking
AICPA: BB Industry
AICPA: FN Measurement

[QUESTION]
6. Special Revenue funds are
A) Funds used to account for the activities of a government that are carried out primarily to provide services to citizens.
B) Funds used to account for a government’s ongoing organizations and activities that are similar to those operated by for-profit organizations.
C) Funds used to account for monies held by the government in a trustee or agency capacity.
D) Funds used to account for all financial resources except those required to be accounted for in another fund.
E) Funds used to account for resources that are restricted or committed for a specific purpose other than debt payments or capital projects.
Answer: E
Learning Objective: 11-04
Topic: Funds―Distinguish the types―Governmental
Difficulty: 1 Easy
Blooms: Understand
AACSB: Reflective Thinking
AICPA: BB Industry
AICPA: FN Measurement

[QUESTION]
7. The term “current financial resources” refers to
A) Those assets that can quickly be converted into cash.
B) Assets that are available to be used for current expenditures.
C) The government’s current assets and current liabilities.
D) The current value of all net assets owned by the governmental unit.
E) Financial resources used to provide electricity to local citizens.
Answer: B
Learning Objective: 11-02
Topic: Financial statements―Two sets
Difficulty: 2 Medium
Blooms: Understand
AACSB: Reflective Thinking
AICPA: BB Industry
AICPA: FN Measurement

[QUESTION]
8. What are the broad classifications of funds for a governmental entity such as a city?
A) General, governmental, and trust funds.
B) Governmental, proprietary, and fiduciary funds.
C) Revenue, trust, and governmental funds.
D) Enterprise, revenue, and fiduciary funds.
E) Governmental, agency, and enterprise funds.
Answer: B
Learning Objective: 11-04
Topic: Funds―Distinguish the categories
Difficulty: 1 Easy
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Industry
AICPA: FN Measurement

[QUESTION]
9. Which group of financial statements is prepared using the “modified accrual accounting” approach?
A) GAAP-based financial statements.
B) Governmental fund financial statements.
C) Cost-based financial statements.
D) Government-wide financial statements.
E) General-purpose financial statements.
Answer: B
Learning Objective: 11-02
Topic: Financial statements―Two sets
Difficulty: 1 Easy
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Industry
AICPA: FN Measurement

[QUESTION]
10. Under modified accrual accounting, revenues should be recognized when they are
A) Collected.
B) Realizable and estimable.
C) Reasonably estimable.
D) Measurable and available to be used.
E) Earned and collected.
Answer: D
Learning Objective: 11-02
Topic: Financial statements―Two sets
Difficulty: 1 Easy
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Industry
AICPA: FN Measurement