ACC410 Final Exam Part 1-2

ACC410 Final Exam Part 1-2

• Question 1

Voters in Phillips City approved the construction of a new $10 million city hall building and approved a $10 million bond issue with a stated rate of interest of 6% to fund the construction. When the bonds were issued, they sold for 101. What are appropriate entries related to the premium? In the debt service fund

• Question 2

A City issued bonds for the purpose of financing a major capital improvement. Which fund is the most appropriate fund in which to record the receipt of the bond proceeds?

• Question 3

In which fund type would a governmental entity’s capital project fund be found?

• Question 4

Voters in Lincoln School District approved the construction of a new high school and approved a $10 million bond issue with a stated rate of interest of 6% to fund the construction. Bids were received and the low bid was $10 million. When the bonds were issued, they sold for face value less bond underwriting fees of $.5 million. The School Board voted to fund the balance of the construction by a transfer from the general fund. The entry in the capital project fund to record the receipt of the bond proceeds would be

• Question 5

The capital project fund of a governmental entity is accounted for using which of the following bases of accounting?

• Question 6

Investments, other than bank balances, must be classified into one of three categories. Which of the following is NOT one of those categories?

• Question 7

For a government that elects to capitalize its works of art and similar assets, the appropriate entry when receiving a contribution of a work of art at the government-wide level is

• Question 8

Which of the following is NOT an infrastructure asset?

• Question 9

A governmental entity may record long-term assets in which of the following funds or account groups?

• Question 10

For a government that elects NOT to capitalize its works of art and similar assets, the appropriate entry when receiving a contribution of a work of art at the government-wide level is

• Question 11

A City entered into a long-term capital lease for some office equipment. Assuming the city maintains its books and records in a manner to facilitate preparation of fund financial statements, what entry would be made in the General Fund to record this event?

• Question 12

A governmental entity that is unable to satisfy claims against it

• Question 13

An obligation issued in the name of a government on behalf of a nongovernmental entity is called

• Question 14

Southwest City enters into a lease agreement that contains a nonappropriation clause. The clause

• Question 15

New City entered into a lease agreement for several new dump trucks to be used in general government activities. Assuming the City maintains its books and records in a manner that facilitates the preparation of the fund financial statements, acquisition of these dump trucks would require entries in which of the following funds and/or schedules?

• Question 16

The City of Brockton voted to establish an internal service fund to account for its printing services. The City transferred $500,000 cash from the General Fund to the newly created internal service fund. The appropriate entry in the General Fund to account for this transfer would be a credit to cash for $500,000 and a debit for $500,000 to

• Question 17

Cash flows from Operating Activities does NOT include which of the following as cash outflows?

• Question 18

On the fund financial statements, internal service activities should be presented

• Question 19

Which of the following is NOT a valid reason for governmental entities to engage in business-type activities?

• Question 20

Franklin County operates a solid waste landfill that is accounted for in an enterprise fund. The County calculated this year’s portion of the total closure and post closure costs associated with the landfill to be $300,000. The entry(ies) to record this cost should be

• Question 21

A plan’s unfunded actuarially accrued liability is the excess of

• Question 22

Citizens within a defined geographic area of Hill City created a special assessment district to facilitate the construction of sidewalks. Hill City was responsible for overseeing the entire construction project. Hill City issued bonds in its own name to pay the contractor for the construction. However, Hill City was not responsible in any manner for the bonds. The bonds were secured by the special assessments which would be levied against the property within the special assessment district. Collections of special assessments would be recorded in which of the following funds of Hill City?

• Question 23

Previously a city received a $1 million gift, the income from which was restricted to support maintenance of city-owned parks. During the current year the endowment earned $70,000 of which $50,000 was transferred to the City Park Special Revenue Fund. On the year-end fund financial statement, the endowment fund would report the $50,000 transferred to the Special Revenue Fund as:

• Question 24

The City of Highland Hills receives a federal grant to assist in nutrition (feeding) programs for senior citizens. The City will select the contractors to provide the feeding and approve the participants in the program. The proceeds of this grant should be accounted for in which of the following funds of the City?

• Question 25

A defined contribution pension plan is one in which the employer agrees to which of the following?

ACC410 Final Exam Part 2

• Question 1

The City created a legally separate entity to operate a County Hospital. The City Council appoints a voting majority of the board of the Hospital. The City cannot impose its will on the Hospital and there is no potential for a financial benefit or financial burden to the City. The County Hospital would be a

• Question 2

The Marsh River School District, a legally separate school district that has a separately elected governing body, cannot enter into any debt agreements without the approval of the County Commission. Marsh River School District would be considered a:

• Question 3

The State has a legally separate State Building Authority which has a board appointed by the Governor. The Authority issues debt in its own name, holds title to buildings in its own name, and leases its building exclusively to the State. In what manner would the Authority be included in the State’s Basic Financial Statements?

• Question 4

The City created a legally separate Housing Authority to provide low-income housing to residents of the City. The City issues debt for the Housing Authority in the name of the City, but the Housing Authority is responsible for repayment of the debt. The Housing Authority is governed by a board composed of all 5 members of the City Council. Actions can be taken by the Authority upon receiving an affirmative vote by a simple majority of the board. The Housing Authority would be considered a:

• Question 5

Government-wide financial statements include which of the following?

• Question 6

Voluntary health and welfare organizations must also report expenses by

• Question 7

In a prior year, United Charities received a $100,000 gift to be used to acquire vans to provide transportation for physically challenged adults. During the current year, United acquired two vans at a cost of $60,000 each. The appropriate entry(ies) to record the acquisition should be

• Question 8

The basis of accounting used by not-for-profit organizations in their external financial reports is

• Question 9

United Charities’ annual fund raising drive in 2001 raised pledges of $600,000 of which $400,000 were collected in 2001 and $100,000 were collected in 2002. United Charities estimates $75,000 of the remaining pledges will never be collected. In 2002, the change in unrestricted net assets is

• Question 10

A not-for-profit Art Museum that has elected not to capitalize its art collection receives a donation of a rare piece of Tlinket Indian art. The donor paid $8,000 for the piece several years ago. Today the piece has an estimated fair value of $50,000. What entry should the Art Museum make upon receipt of this donation?

• Question 11

A private not-for-profit college would include which of the following financial statements in is Basic Financial Statements?

• Question 12

Which of the following entities should recognize depreciation expense on its operating statement?

• Question 13

For financial reporting purposes, private not-for-profit colleges and universities are within the jurisdiction of the

• Question 14

A hospital estimates, based on past experience, that it will incur $5 million in malpractice claims as a result of services rendered in the current period. The hospital carries a malpractice insurance policy with a yearly $2 million deductible clause. The amount that should appear on its year-end financial statement as Claims Expense (Loss) should be

• Question 15

In prior years, a not-for-profit hospital received funds from a donor who restricted the use of those funds to providing nursing scholarships. During the current year $8,000 of scholarships were awarded. These scholarships should be reported

• Question 16

Which of the following is not reported upon in the Schedule of Findings and Questioned Costs?

• Question 17

The process of specifically directing federal funds to a particular program is called:

• Question 18

‘‘Generally accepted government auditing standards’’ (GAGAS) refers to standards incorporated in

• Question 19

In discerning the objectives of a program to be audited, the auditors should give the least credibility to

• Question 20

This law requires that the wages of laborers and mechanics employed by the contractors of federally funded projects be paid at prevailing local wage rates.

• Question 21

Which of the following groups is least likely to be involved in evaluating the efficiency and effectiveness of government programs?

• Question 22

Which of the following is an example of an efficiency measure?

• Question 23

The city council of the City of Highland Hills has adopted a policy of aggressively pursuing grants and other resource inflows from other levels of government. Over the past several years, the proportion of total City revenues that comes from other levels of government has been steadily increasing. As a consequent of these increased revenues, the City has begun offering a number of new services to the citizens of the City. In assessing the financial condition of the City of Highland Hills, an analyst would conclude which of the following?

• Question 24

Which of the following events would be evidence that the audience criterion of a not-for-profit joint program and fund-raising activity has NOT been met? Each activity included both a program activity and a fund-raising solicitation.

• Question 25

Which of the following statements is true regarding the ratio analysis of Intergovernmental Revenues to Total Revenues?