All of the following statements are true concerning the conversion of governmental funds togovernmental activities excepta. Depreciation expenditure reported in governmental funds simply becomes depreciation expense ingovernmental activities.b. A decrease in the long-term liability for compensated absences will result in expenses of variousfunctions at the government-wide level being less than expenditures at the governmental fund level.c. Assuming capital outlay expenditures all reflect purchases of capital assets as per the government'scapitalization threshold policy, capital outlay expenditures simply become additions to capital assets.d. Bonds payable are not reported in the governmental funds financial statem

Government funds are a category of funds used in governmental accounting to track and manage public…

Answered: All of the following statements are…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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What is the primary difference between revenue grants and capital grants in accounting for government grants? A. Revenue grants are recognized in the income statement immediately, while capital grants are recognized as deferred income. B. Revenue grants are used for long-term asset acquisition, while capital grants support day-to-day operating activities. C. Both revenue and capital grants are recognized in the income statement immediately. D. Capital grants are not accounted for in financial statements.
How to record a trade-in? A.) Government Wide :Record at ticket price of the new asset B.) Fund statement: only the cash aspects of the transaction be recognized as expenditures C.) Losses and gains should be recognized on fund statements. D.) No losses and gains should be recognized on government wide financial statement
Which of the following adjustments is necessary to move from governmental fund financial statements to government-wide financial statements? a. Eliminate expenditures for debt principal b. Eliminate expenditures for capital outlay and add depreciation expense c. Both of the above d. Neither of the above
The acquisition of capital assets by a special revenue fund would be shown as: O a. long term asset O b. short term asset (supplies) O c. expenditure O d. cannot have capital acquisitions in governmental funds Oe. expense
What is the purpose of a special revenue fund? Choose the correct.a. To account for revenues legally or externally restricted as an operating expenditure.b. To account for ongoing activities.c. To account for gifts when only subsequently earned income can be expended.d. To account for the cost of long-lived assets bought with designated funds.
When a government orders equipment which is to be used by an activity accounted within the General Fund, it should be recorded in the General Fund as a(an): Multiple Choice Encumbrance. Capital asset. Expenditure. None of the choices are correct, the General Fund does not record capital assets purchases..
Revenues that are legally restricted to expenditures for specified purposes should be accounted for in special revenue funds, includinga. accumulation of resources for payment of general long-term debt principal and interest.b. pension trust fund revenues.c. gasoline taxes to finance road repairs.d. proprietary fund revenues.
What is the purpose of a special revenue fund? To account for revenues legally or externally restricted as an operating expenditure. To account for ongoing activities. To account for gifts when only subsequently earned income can be expended. To account for the cost of long-lived assets bought with designated funds.
11. Depreciation of general capital assets should be reported in the Governmental Activities column of the government-wide financial statements. FALSE) (TRUE / 12. The accounting system for proprietary funds shouldn't provide for integration of budgetary accounts. (TRUE / FALSE) 13. Separate columns must be provided in the government-wide financial statements for governmental activities, business-type activities, and fiduciary activities. (TRUE / FALSE) 14. A statement of revenues, expenditures, and changes in fund balances is used to report the inflows and outflows of current financial resources of governmental funds. (TRUE / FALSE) 15. Government-wide financial statements report financial transactions related to the governmental, business-type, and fiduciary activities government. (TRUE / FALSE) of the
For a government that has a trust fund in which it is accumulating sufficient assets to pay OPEB, the net OPEB liability should be reported in both the governmental fund balance sheet and the government- wide statement of net position. A. True B. False
Explain the adjustments necessary to convert to a government-wide statement of activities, assuming all expenditures are for capital assets and other finance sources are the result of issuance of general long-term obligations.
T/F questions 1) Government business type activities provide services to users for fees that are intended to recover all or a portion of the costs of providing the services. 2) General governmental activities provide goods and services to citizens without regard to their ability to pay. 3) Proprietary funds report revenues and expenses using a modified-accrual basis of accounting. 4) The governmental fund accounting equation is Current Assets - Current Liabilities = Fund Balance. 5) Enterprise funds are used to account for business-type activities that serve primarily internal customers. 27) A restricted fund balance represents amounts that can only be spent for the specific purposes stipulated by constitution, external resource providers, or through enabling legislation. 28) Government enter the annual budget in the journal by recording a debit to the appropriations account and a credit to estimated revenues. 29) Under accrual accounting, revenues are generally recognized in the…

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