1 TCOs A and B Fiduciary funds are to use which of the following measurement and basis of accounting Points 5 Economic resource measurement focus and accrual basis of accounting Current financial resources measurement focus and accrual basis of accounting Economic resources measurement focus and modified accrual basis of accounting None of the above the fiduciary funds have no revenues 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 3 TCOs A and B Which of the following is most correct with regard to Management s Discussion and Analysis Points 5 Both state and local governments and federal agencies are required to provide a MD A Federal agency financial reports are required to provide a MD A State and local government agencies are required to provide a MD A Both state and local government and federal agencies are encouraged but not required to provide a MD A 4 TCOs B and C With regards to budgetary reporting by governmental entities which of the following is not a true statement Points 5 While GASB standards guide the format of the comparison it does not require governments to maintain budgetary accounts GASB standards require governmental entities to present a comparison of budgeted and actual results for the General Fund and special revenue funds with legally adopted budgets Budgetary accounts are required to appear in the general purpose financial statements The basis of accounting used to report the actual column in the budgetary comparison schedule is prepared according to legal requirements for budget preparation even if it departs from GASB Statements 5 TCOs B and C The proper journal entry to record an encumbrance would include which of the following Points 5 A A debit to the Encumbrance Account B A debit to the Reserve for Encumbrances Account C A credit to the Reserve for Encumbrances Account A and C would both be included in the journal entry 6 TCOs B and C Capital assets that are used by an enterprise fund should be accounted for in the following fund Points 5 Enterprise fund but no depreciation on the capital assets should be recorded Enterprise fund and depreciation on the capital assets should be recorded Business type activities journal but no depreciation on the capital assets should be recorded Governmental activities journal and depreciation on the capital assets should be recorded 7 TCO E When a government acquires general fixed assets under a capital lease agreement how should the asset be recorded in the government wide financial statements Points 5 As an expense when payments are made At the inception of the lease agreement at the lesser of the present value of the minimum lease payments of the fair market value of the property As an expenditure when payments are made None of the above 8 TCO E Which of the following projects would usually be accounted for in a capital projects fund Points 5 A Payment of interest on bonds that are issued to finance the construction of a new city hall B The construction of a parking garage that is operated as an enterprise fund C The construction of a fire station addition Both A and B would be accounted for in a capital projects fund 9 TCO E Which of the following statements is a true statement regarding the reporting of debt service funds Points 5 Debt service funds are reported in a separate column in the governmental fund financial statements statements fund financial statements Debt service funds are reported in the other governmental funds column in the governmental Debt service funds are reported in a separate column in the government wide financial Debt service funds are reported in the governmental activities column in the government wide financial statements 10 TCO D Under GASB Statement No 33 when would a special revenue fund be considered to have satisfied the eligibility requirement of a reimbursement type federal grant Points 5 Only as the work is completed for a project When the work has started for the project Only after the work is completely finished for the project When a plan for the use of the funds has been developed and approved by the appropriate personnel 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 No I don t agree with this statement because fixed assets such as plant equipment are not funded by the capital projects fund In particular the capital projects fund is used for the accounting of resources that are used for the acquisition or construction of the capital assets that are designated by a government However it does not include the assets that are financed by fiduciary or proprietary funds Wilson 2 TCOs A and B How are the major funds of a state or local government determined by a governmental entity Points 30 fund Similarly any fund that the government considers to be of great importance can be recognized as a major fund Aside from these though GASBS 34 has the following requirements for when a fund can be considered as major Total assets liabilities revenues or expenditures expenses of that governmental or enterprise fund are at least 10 of the corresponding element total assets liabilities and so forth for all funds of that category or type that is total governmental or total enterprise funds The same element that met the 10 criterion above is at least 5 of the corresponding element total for all governmental and enterprise funds combined To be considered a major fund it is important that the same element of a fund meet both of the criteria mentioned above In the event that a fund meets both criteria in the last fiscal year but meets only one or none of the criteria during the present fiscal year the government can opt to continue reporting the fund as major for the present year subject to a pending determination in the succeeding year To determine whether a fund meets the 10 and 5 criteria the threshold amounts must be