ACCT 567 Week 8 Final Exam SOLVED

ACCT 567 Week 8 Final Exam SOLVED


1. (TCO A) On what should the government-wide financial statements report? (Points : 5)
       Net position and results of the financial operations of the government as a whole.
       Budgetary Compliance
       The cost of government services
       Fiscal accountability


 

2. (TCO B) According to GASB standards, when should transfers be recognized? (Points : 5)
       When earned.
       When collected in cash.
       When authorized by the budget ordinance.
       In the period the interfund receivable and payable arise.


 

3. (TCO C) Comparisons of budgeted versus actual revenues and expenditures are a requirement of which of the following situations? (Points : 5)
       Required by GAAP for the general fund and major special revenue funds for which an annual budget has been legally adopted.
       Required by GAAP for all government fund types.
       Required by GAAP for internal management reports only, they are not permitted for external financial reporting.
       It is optional under GASB standards for all funds.


 

4. (TCO D) The revenues account of a government entity is debited when (Points : 5)
       the budget is recorded at the beginning of the year.
       property taxes are recorded.
       the account is closed to fund balance-unassigned at the end of the year.
       property taxes are collected.


 

5. (TCO E) During the year, a wealthy local businessman donated a building to city of Perris. The original cost of the building was $340,000. Accumulated depreciation at the date of the gift amounted to $220,000. The appraised fair market value of the donation at the date of the gift was $525,000 of which $35,000 was the value of the land on which the building was situated. At what amount should the city record this donated property in the governmental activities accounts at the government-wide level? (Points : 5)
       $220,000.
       $120,000.
       $340,000.
       $525,000.


 

6. (TCO E) Which of the following resource inflows would be recorded as a revenue of a debt service fund? (Points : 5)
       Receipt of the premium on a new bond issue.
       Property taxes levied by the debt service fund for debt service purposes.
       Taxes collected by the General Fund and transferred to the debt service fund.
       Transfer of the residual equity of a capital projects fund to the debt service fund.


 

7. (TCO G) Which of the statements concerning agency funds is a true statement? (Points : 5)
       Agency funds use the same basis of accounting as permanent funds.
       Agency funds are reported only on the statement of fiduciary net position.
       Agency funds use the temporary accounts—Additions and Deductions.
       Agency funds never receive cash.


 

8. (TCO J) Which of the following items are typically reported differently between the governmental fund statements and the governmental activities column of the government-wide statements? (Points : 5)
       Inventories
       Cash collected on property taxes receivable
       Capital outlays
       Accounts Payable and other accrued expenses


 

9. (TCO H) A condition whereby the design or operation of a control does not allow management or employees in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis is called a(an) (Points : 5)
       system design weakness.
       deficiency.
       unacceptable reportable condition.
       audit alert item.


 

10. (TCO H) Under FASB Standards, how would a not-for-profit organization recognize a conditional pledge? (Points : 5)
       It would disclose the amount of the conditional pledge in the notes to the financial statements.
       It would debit Pledges Receivable and credit Deferred Contributions.
       It would debit Pledges Receivable and credit Contributions—Temporarily Restricted.
       It would not recognize the conditional pledge until pledge conditions are substantially met.


 

11. (TCO I) Which of the following items would not affect the amounts reported in the Revenues and Gains section of the statement of activities for a private college or university? (Points : 5)
       Student tuition and fees
       Net assets released from restriction
       Tuition and fees discounts and allowances
       Deferred revenues


 

12. (TCO I) The primary source of revenues for most hospitals are (Points : 5)
       investment income.
       capitation fees from health maintenance organizations.
       exchange transactions, such as fees for services.
       nonexchange transactions, such as contributions.

1. (TCOs D, E, F, and G) Please list the name of the fund(s) in which each of the following transactions or events would be recorded.

2. (TCO F) The garbage collection of the city of Rockwell could be accounted for through the General Fund, a Special Revenue Fund, or an Enterprise Fund. Please identify the circumstances in which each of these fund types might be appropriate. (Points : 40)

3. (TCO I) During the fiscal year of June 2012, Jefferson General Hospital, a not-for-profit healthcare organization, had the following revenue-related transactions. (The amounts are summarized for the entire year.)

4. (TCO E) Enter the template provided in the answer space and record the following transactions in the Capital Projects Fund in the general journal for the following transactions.

5. (TCO F) The following Statement of Cash Receipts and Disbursements was prepared by the bookkeeper of the City of Glass City Museum of Science. The museum is a component unit of the City of Glass City and must be included in the city’s financial statements. It began operations on January 1, 2012 with no liabilities or commitments and only two assets.

(1) $6,000 in cash and (2) Land that was acquired for $11,000.

Cash Basis
12 months
Cash Receipts:
Admission Fees $295,000
Loan from the Bank $50,000
Total deposits $345,000

Cash Disbursements:
Supplies $62,000
Wages 104,000
Utilities 48,000
Purchase of Equipment 70,000
Purchase of Fixtures 45,000
Interest on the Bank Loan 1,250
Total checks $330,250

Excess of Receipts Over Disbursements $14,750

Additional Information:

• The loan from the bank is dated April 1 and is for a five-year period. Interest (5% annual rate) is paid on Oct. 1 and April 1 of each year, beginning Oct. 1, 2012.
• The equipment was purchased on April 1, 2012 with the proceeds provided by the bank loan and has an estimated useful life of 10 years (please use the straight-line method of depreciation) for computing depreciation on the equipment. The fixtures were purchased on July 1, 2012 and has an estimated useful life of five years (please use the straight-line method of depreciation) for computing depreciation on the fixtures.
• Supplies on-hand amounted to $5,900 at December 31, 2012.
• All other bills and salaries related to 2012 had been paid by the close of business on December 31.

Required:
Enter the template provided in the answer space and complete the following requirements:
Please prepare a Statement of Revenues, Expenses, and Changes in Net Assets for the year ended December 31, 2012 assuming the city plans to account for its activities on the accrual basis.

Template:

Operating Revenues:
Charges for Services $

Operating Expenses:
Wages $
Supplies ($62,000-5,900)
Utilities
Depreciation ($70,000/10*9/12)
+ ($45,000/5*6/12)
Total Operating Expenses

Operating Income (Loss) $

Nonoperating Expenses:
Interest $1,250 + ($50,000*5%*3/12)

Change in Net Assets
Net Assets, Jan. 1, 2012
Net Assets, Dec. 31, 2012