State and Local Governments - CPA Financial Accounting and Reporting (FAR)
Card 1 of 96
The city of Hammond opened a landfill at the beginning of Year 1, which is expected to take 10 years to fill. At the end of Year 1, the land full is 8% full and the estimated current closures costs are $150,000. At the end of Year 2, the landfill is currently 20% full and the estimated closure costs are $200,000. The city does not charge a fee to use the landfill and thus reports it in the general fund. What amount of expenditures should be reported in Year 2 in the fund-based financial statements in connection with the closure of the landfill?
The city of Hammond opened a landfill at the beginning of Year 1, which is expected to take 10 years to fill. At the end of Year 1, the land full is 8% full and the estimated current closures costs are $150,000. At the end of Year 2, the landfill is currently 20% full and the estimated closure costs are $200,000. The city does not charge a fee to use the landfill and thus reports it in the general fund. What amount of expenditures should be reported in Year 2 in the fund-based financial statements in connection with the closure of the landfill?
Tap to reveal answer
Nothing is recorded for closure costs in the fund financial statements because no current economic resources were used for closing the landfill. A liability would be recorded in the government-wide statements because the focus in those statements is on both current and non-current resources.
Nothing is recorded for closure costs in the fund financial statements because no current economic resources were used for closing the landfill. A liability would be recorded in the government-wide statements because the focus in those statements is on both current and non-current resources.
← Didn't Know|Knew It →
The fire department of Forbes Township purchased a new fire truck on January 1, Year 1. Fund-based financial statements are being produced for Year 1 that include the fire department in the general fund. Which of the following statements is true?
The fire department of Forbes Township purchased a new fire truck on January 1, Year 1. Fund-based financial statements are being produced for Year 1 that include the fire department in the general fund. Which of the following statements is true?
Tap to reveal answer
The focus of the fund financial statements is current financial resources, and recording depreciation will not impact current financial resources. Thus, the purchase of the car will be reflected in the fund statements, but the depreciation will only be recorded in the government-wide statements, which includes non-current resources as well as current resources.
The focus of the fund financial statements is current financial resources, and recording depreciation will not impact current financial resources. Thus, the purchase of the car will be reflected in the fund statements, but the depreciation will only be recorded in the government-wide statements, which includes non-current resources as well as current resources.
← Didn't Know|Knew It →
Golden City levies a real estate tax. In Year 1, the city expects to collect $400,000 between January 1, Year 2, and March 15, Year 2. It expects to collect $160,000 per month in January and February, and an additional $80,000 in March. The city's policy is that money collectible within 60 days is considered available. How much of the revenue should be recognized in Year 1 in the fund financial statements?
Golden City levies a real estate tax. In Year 1, the city expects to collect $400,000 between January 1, Year 2, and March 15, Year 2. It expects to collect $160,000 per month in January and February, and an additional $80,000 in March. The city's policy is that money collectible within 60 days is considered available. How much of the revenue should be recognized in Year 1 in the fund financial statements?
Tap to reveal answer
At the end of Year 1, the city will only recognize the revenue it expects to collect within the next 60 days. This includes January and February, so Year 1 revenue will include $160K for January + $160K for February.
At the end of Year 1, the city will only recognize the revenue it expects to collect within the next 60 days. This includes January and February, so Year 1 revenue will include $160K for January + $160K for February.
← Didn't Know|Knew It →
If a primary government's general fund has an equity interest in a joint venture, all or a portion of this equity interest should be reported in the:
If a primary government's general fund has an equity interest in a joint venture, all or a portion of this equity interest should be reported in the:
Tap to reveal answer
The portion of the equity interest in the joint venture that represents the government's investment in the net position of the venture is recorded in the government wide statement of net position.
The portion of the equity interest in the joint venture that represents the government's investment in the net position of the venture is recorded in the government wide statement of net position.
← Didn't Know|Knew It →
Which of the following would be reported as program revenues on a local government's government wide statement of activities?
Which of the following would be reported as program revenues on a local government's government wide statement of activities?
Tap to reveal answer
For a local government's government wide statement of activities, charges for services are reported as program revenue.
For a local government's government wide statement of activities, charges for services are reported as program revenue.
← Didn't Know|Knew It →
Internal service funds, while being proprietary funds, are reported under which at the government wide level?
Internal service funds, while being proprietary funds, are reported under which at the government wide level?
Tap to reveal answer
When the consolidation of governmental financial statements are complete, the internal service funds are displayed under governmental activities rather than proprietary.
When the consolidation of governmental financial statements are complete, the internal service funds are displayed under governmental activities rather than proprietary.
← Didn't Know|Knew It →
The city of Frankford assesses a sales tax on all purchases over $40,000. On December 28, Year 1, a sale of $65,000 occurs that will result in a payment of a tax to the city of $2,400. The payment is expected to be received during March of Year 2. Assets such as investments and receivables are viewed as current if they are collectible within 60 days. How should this tax revenue be reported in the Year 1 fund financial statements?
The city of Frankford assesses a sales tax on all purchases over $40,000. On December 28, Year 1, a sale of $65,000 occurs that will result in a payment of a tax to the city of $2,400. The payment is expected to be received during March of Year 2. Assets such as investments and receivables are viewed as current if they are collectible within 60 days. How should this tax revenue be reported in the Year 1 fund financial statements?
Tap to reveal answer
This sales tax assessment will not be recorded in Year 1 because it is not expected to be collected within 60 days of year-end.
This sales tax assessment will not be recorded in Year 1 because it is not expected to be collected within 60 days of year-end.
← Didn't Know|Knew It →
Pattinson County is currently preparing general purpose financial statements for Year 1. Currently, they are working on fund-based financial statements for the general fund and special revenue fund. Which of the following will not be reported as assets on the balance sheet for these funds at December 31, Year 1?
Pattinson County is currently preparing general purpose financial statements for Year 1. Currently, they are working on fund-based financial statements for the general fund and special revenue fund. Which of the following will not be reported as assets on the balance sheet for these funds at December 31, Year 1?
Tap to reveal answer
An encumbrance will be recorded for the machine at the time of purchase but an asset will not be recorded until the machine is received.
An encumbrance will be recorded for the machine at the time of purchase but an asset will not be recorded until the machine is received.
← Didn't Know|Knew It →
The city of Carlton produces a comprehensive annual financial report which includes general purpose financial statements. Which of the following statements is true?
The city of Carlton produces a comprehensive annual financial report which includes general purpose financial statements. Which of the following statements is true?
Tap to reveal answer
The CAFR includes fund-base statements and government-wide statements.
The CAFR includes fund-base statements and government-wide statements.
← Didn't Know|Knew It →
A government wide statement of net position must include which of the following?
A government wide statement of net position must include which of the following?
Tap to reveal answer
The government statement of net position must include a distinction between governmental and business type activities.
The government statement of net position must include a distinction between governmental and business type activities.
← Didn't Know|Knew It →
Capital assets donated to a governmental unit should be recorded:
Capital assets donated to a governmental unit should be recorded:
Tap to reveal answer
Capital assets donated to a governmental unit should be recorded at their estimated fair value at time of acquisition, plus ancillary charges, if any.
Capital assets donated to a governmental unit should be recorded at their estimated fair value at time of acquisition, plus ancillary charges, if any.
← Didn't Know|Knew It →
In a governmental entity's government wide statement of net position, which of the following would not be included as a liability?
In a governmental entity's government wide statement of net position, which of the following would not be included as a liability?
Tap to reveal answer
All of the following except for prepaid expenses would be a liability. Prepaid expenses are assets.
All of the following except for prepaid expenses would be a liability. Prepaid expenses are assets.
← Didn't Know|Knew It →
The library of the city of Howerton has ordered new shelving units at the cost of $40,000. How is this order recorded by the city in the government-wide financial statements?
The library of the city of Howerton has ordered new shelving units at the cost of $40,000. How is this order recorded by the city in the government-wide financial statements?
Tap to reveal answer
Financial commitments (such as ordering items before receiving them) are recorded in the fund financial statements as encumbrances but they are not recorded in the government-wide statements.
Financial commitments (such as ordering items before receiving them) are recorded in the fund financial statements as encumbrances but they are not recorded in the government-wide statements.
← Didn't Know|Knew It →
Hamilton County purchases a new police car at an estimated cost of $20,000 on August 5, Year 1. The vehicle arrives on September 9, Year 1, with an invoice of $21,250. Hamilton County pays the vendor in full on October 3, Year 1. The journal entry for this transaction would include which of the following on August 5, Year 1?
Hamilton County purchases a new police car at an estimated cost of $20,000 on August 5, Year 1. The vehicle arrives on September 9, Year 1, with an invoice of $21,250. Hamilton County pays the vendor in full on October 3, Year 1. The journal entry for this transaction would include which of the following on August 5, Year 1?
Tap to reveal answer
When the purchase is made, a debit will be made to encumbrances for the estimated price at the time of purchase.
When the purchase is made, a debit will be made to encumbrances for the estimated price at the time of purchase.
← Didn't Know|Knew It →
The city of Abernathy's internal service fund estimates revenues and expenses at the beginning of each year. In Year 2, Abernathy estimates revenues for the year of $2 million and estimates expenses for the year of $1.7 million. What will be the balance in the budgetary control account at the beginning of the year?
The city of Abernathy's internal service fund estimates revenues and expenses at the beginning of each year. In Year 2, Abernathy estimates revenues for the year of $2 million and estimates expenses for the year of $1.7 million. What will be the balance in the budgetary control account at the beginning of the year?
Tap to reveal answer
Internal service funds do not use budgetary accounting; budgetary accounting is used by governmental funds.
Internal service funds do not use budgetary accounting; budgetary accounting is used by governmental funds.
← Didn't Know|Knew It →
Which basis of accounting is required for a city's government wide financial statements?
Which basis of accounting is required for a city's government wide financial statements?
Tap to reveal answer
The government wide financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting.
The government wide financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting.
← Didn't Know|Knew It →
What is the measurement focus and the basis of accounting for the government wide financial statements?
What is the measurement focus and the basis of accounting for the government wide financial statements?
Tap to reveal answer
The government wide financial statements use both the economic resources focus and accrual accounting.
The government wide financial statements use both the economic resources focus and accrual accounting.
← Didn't Know|Knew It →
Taxes levied on citizens for infrastructure improvements should be reported in:
Taxes levied on citizens for infrastructure improvements should be reported in:
Tap to reveal answer
Program revenues would include charges for services and grants. Nonexchange revenues for governmental activities are general revenues.
Program revenues would include charges for services and grants. Nonexchange revenues for governmental activities are general revenues.
← Didn't Know|Knew It →
The city of Frankford assesses a sales tax on all purchases over $40,000. On December 28, Year 1, a sale of $65,000 occurs that will result in a payment of a tax to the city of $2,400. The payment is expected to be received during March of Year 2. Assets such as investments and receivables are viewed as current if they are collectible within 60 days. How should this tax revenue be reported in the Year 1 fund financial statements?
The city of Frankford assesses a sales tax on all purchases over $40,000. On December 28, Year 1, a sale of $65,000 occurs that will result in a payment of a tax to the city of $2,400. The payment is expected to be received during March of Year 2. Assets such as investments and receivables are viewed as current if they are collectible within 60 days. How should this tax revenue be reported in the Year 1 fund financial statements?
Tap to reveal answer
This sales tax assessment will not be recorded in Year 1 because it is not expected to be collected within 60 days of year-end.
This sales tax assessment will not be recorded in Year 1 because it is not expected to be collected within 60 days of year-end.
← Didn't Know|Knew It →
Pattinson County is currently preparing general purpose financial statements for Year 1. Currently, they are working on fund-based financial statements for the general fund and special revenue fund. Which of the following will not be reported as assets on the balance sheet for these funds at December 31, Year 1?
Pattinson County is currently preparing general purpose financial statements for Year 1. Currently, they are working on fund-based financial statements for the general fund and special revenue fund. Which of the following will not be reported as assets on the balance sheet for these funds at December 31, Year 1?
Tap to reveal answer
An encumbrance will be recorded for the machine at the time of purchase but an asset will not be recorded until the machine is received.
An encumbrance will be recorded for the machine at the time of purchase but an asset will not be recorded until the machine is received.
← Didn't Know|Knew It →