Devry ACCT567 midterm exam 2015

Page 1

Question 1. 1. (TCOs A and B) Which of the following fund statements will use the current financial resources measurement focus? (Points : 5)

Fiduciary fund statements

Proprietary fund statements

Enterprise fund statements

Governmental fund statements

Question 2. 2. (TCOs A and B) Funds other than the General Fund are required to be considered to be a major fund when (Points : 5)

(A) total assets, liabilities, revenues, or expenditures/expenses of that fund constitute 10 percent of either the governmental or enterprise category.

(B) total assets, liabilities, revenues, or expenditures/expenses of that fund are at least 5 percent of the total of the governmental and enterprise category.

The conditions of either A or B exist.

The conditions of both A and B exist.

Question 3. 3. (TCOs A and B) Proprietary funds use which of the following measurement focus and basis of accounting? (Points : 5)

Economic resources measurement focus and modified accrual basis of accounting.

Current financial resources measurement focus and modified accrual basis of accounting.

Economic resources measurement focus and accrual basis of accounting.

Current financial resources measurement focus and accrual basis of accounting.

Question 4. 4. (TCOs B and C) Which of the following items would not be considered a nonexchange transaction for a state government? (Points : 5)

Property taxes

Sales of lottery tickets

Income taxes

Fines and forfeits

Question 5. 5. (TCOs B and C) Which basis of accounting for a government should revenues be recognized in the period when they are measurable and available? (Points : 5)

Accrual basis – No; Modified Accrual basis – No.

Accrual basis – No; Modified Accrual basis – Yes.

Accrual basis – Yes; Modified Accrual basis – Yes.

Accrual basis – Yes; Modified Accrual basis – No.

Question 6. 6. (TCOs B and C) Which of the following accounts represents a budgetary account of a governmental fund? (Points : 5)

Expenditures

Other Financing Sources

Encumbrances Outstanding

Estimated Other Financing Uses

Question 7. 7. (TCO E) King City receives a trust donation for the purpose of maintaining flower in city parks, but the donor does not make a specification as to how the principal must be maintained. This type of trust should be appropriately accounted for which of the following fund? (Points : 5)

General Fund

Permanent Fund

Special Revenue Fund

Permanent Fund

Question 8. 8. (TCO E) Which fund type is the interest on Long Term Debt typically not accrued; however, it is recognized as an expenditure in the year in which interest is legally due? (Points : 5)

Debt Service Fund

Pension Trust Fund

Internal Service Fund

Enterprise Fund

Question 9. 9. (TCO E) Which of the following funds or activities general journals would it be inappropriate to record depreciation of capital assets? (Points : 5)

Capital Projects Fund

Governmental Activities

Internal Service Fund

Business-type activities

Question 10. 10. (TCO D) When payrolls and other liabilities are incurred and must be paid before substantial amounts of cash will be collected, what type of short-term is desirable and secured by a government’s power of tax? (Points : 5)

Tax Relief Note Payable

Tax Encumbrances Note Payable

Tax Anticipation Note Payable

Tax Encumbrances Note Payable

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Question 1. 1. (TCO E) You are in a staff meeting with the city controller and one of your colleagues was quoted as follows: “Capital projects funds are established by a government to account for all plant or equipment acquired by construction.” Do you agree with this statement? Why or why not? (Points : 30)

Question 2. 2. (TCOs A and B) What are fiduciary funds? Please identify and explain the two main types and what is the main difference between the funds? (Points : 30)

Question 3. 3. (TCO D) The City of Ridgetown received a gift of $3,000,000 from a local resident on April 1, 2012 and signed an agreement that the funds would be invested on a permanent basis and the income would be used to maintain all of the city parks and recreation centers. The following transactions took place during the fiscal year ended Dec 31, 2012.

a. The gift was recorded on the books on April 1.

b. On April 1, 2012, the Talmadge Co. bonds were purchased in the amount of $3,000,000, at par. The bonds carry an annual interest rate of 6 percent, payable semiannually on October 1 and April 1.

c. On October 1, the semiannual interest was received.

d. From October 1 through December 1, payments were made totaling $43,000 to a lawn care and equipment service.

e. On December 31, an accrual was made for interest.

f. After a review of the bond market on December 31, 2012, the bonds had a market value of $2,982,000, exclusive of accrued interest.

g. The books were closed on December 31.

Required

a. Record the transactions on the books Parks and Recreation Perpetual Care Fund.

b. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the Parks and Recreation Perpetual Care Fund for the year ended December 31, 2012.

c. Prepare the Balance Sheet for the Parks and Recreation Perpetual Care Fund for the year ended December 31, 2012. (Points : 40)