Governmental Funds: Current Financial Resources Quiz

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What type of fund is typically used to account for departmental operating activities like the city manager’s office and finance?

Debt Service Fund

Special Revenue Fund

Capital Projects Fund

General Fund (correct)

When tax or grant revenues are legally restricted for specific operating purposes such as maintenance of roads and bridges, which type of fund is created?

General Fund

Special Revenue Fund (correct)

Internal Service Fund

Debt Service Fund

Which fund is typically used to account for financial resources for major capital facilities like buildings, highways, or bridges?

Capital Projects Fund (correct)

Internal Service Fund

Permanent Fund

Enterprise Fund

If a city needs to accommodate a growing population by constructing new buildings or parks, which fund type is usually engaged?

Capital Projects Fund Signup and view all the answers

Which fund is NOT used to account for tax or grant revenues or bond proceeds related to capital projects?

Permanent Fund Signup and view all the answers

In what fund type are payments to architects, engineers, construction contractors, and suppliers usually accounted for when a capital project is undertaken?

Capital Projects Fund Signup and view all the answers

What is the purpose of a Debt Service Fund?

To account for resources for general long-term debt principal and interest payments. Signup and view all the answers

When would a government be required to create a Debt Service Fund?

When bond covenants mandate it or if there are other types of long-term liabilities. Signup and view all the answers

Which expenses should be included in the cost of a capital asset?

Capitalized interest and ancillary charges Signup and view all the answers

How does a Permanent Fund differ from a Private-Purpose Trust Fund?

Permanent Fund earnings can only benefit private individuals, while Private-Purpose Trust Fund earnings support government programs. Signup and view all the answers

According to Principle 7, which type of assets should not be depreciated?

Inexhaustible assets like land Signup and view all the answers

Which type of fund accounts for financial resources when investments yield revenue for general government expenditures?

Permanent Fund Signup and view all the answers

How should donated capital assets be reported?

At their estimated fair value plus ancillary charges Signup and view all the answers

What is the primary focus of accounting for governmental funds?

Recording inflows and outflows of current financial resources. Signup and view all the answers

In what situation would a government use a Permanent Fund instead of a Private-Purpose Trust Fund?

When public purposes involve aesthetic enhancements to public buildings. Signup and view all the answers

What is the basis of accounting for the government-wide financial statements?

Accrual basis Signup and view all the answers

According to Principle 8, what distinction should be made for long-term liabilities?

Between fund long-term liabilities and general long-term liabilities Signup and view all the answers

Where should depreciation expense be reported?

In the government-wide statement of activities Signup and view all the answers

What types of assets and liabilities are reported on the balance sheet for governmental funds?

Only current assets and current liabilities Signup and view all the answers

What does the accounting equation for a simple governmental fund represent?

Working capital equation Signup and view all the answers

Which financial statement is more similar to a statement of cash flows in governmental fund accounting?

Statement of revenues, expenditures, and changes in fund balance Signup and view all the answers

What do Proprietary Funds account for in governmental accounting?

Continuing business-type organizations and activities Signup and view all the answers

How does governmental fund accounting differ from measuring financial position compared to other accounting methods?

It focuses on sources, uses, and balances of net financial resources Signup and view all the answers

What is the primary purpose of the statement of revenues, expenditures, and changes in fund balance in governmental fund accounting?

To show operating results and changes in fund balance Signup and view all the answers

Which basis of accounting should be used for measuring financial position and operating results in fund financial statements?

Modified accrual basis Signup and view all the answers

In fund financial statements, when should revenues be recognized?

In the accounting period they become available and measurable Signup and view all the answers

For proprietary fund statements, which measurement focus and basis of accounting should be used according to the text?

Economic resources measurement focus and accrual basis Signup and view all the answers

How should transfers between funds be reported according to the text?

When the inter-fund receivable and payable arise Signup and view all the answers

In fund financial statements, when should expenditures be recognized?

In the accounting period in which the fund liability is incurred, if measurable Signup and view all the answers

How should financial statements for governmental funds be presented?

Using current financial resources measurement focus and accrual basis of accounting Signup and view all the answers