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Exam 4: The General Fund and Special Revenue Funds

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Question 31

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The city's central garage, which is accounted for as an Internal Service Fund, repairs and maintains all of the city's vehicles. The fire department is accounted for in the General Fund. The Central Garage Internal Service Fund sends a bill to the fire department for $18,000, which represents the cost of maintaining fire trucks for the month. The Central Garage Internal Service Fund should record

A) Debit Due from General Fund and credit Revenues.
B) Debit Due from General Fund and credit Expenses.
C) Debit Expenses and credit Due to General Fund.
D) Debit Revenues and credit Due to General Fund.

E) A) and D)
F) None of the above

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Question 32

Multiple Choice

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Restricted fund balance in the General Fund can be the result of

A) A city budget director setting aside funds to be spent for city street improvement.
B) Donors giving monies to a city if only the earnings on investment of the gift can be spent for park beautification and the original gift principal must be maintained intact.
C) A city council passing enabling legislation that requires proceeds from a newly authorized sales tax be spent on a downtown revitalization project.
D) A city council taking a formal action to set aside money for a future contract.

E) B) and D)
F) B) and C)

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Question 33

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The city of Brittainville's Special Revenue Fund levied $350,000 in taxes, during the current year. (1% is expected to be uncollectible.) Also during the year, the fund collected $7,500 of interest revenue and $50,000 was transferred from the General Fund. As a result of these transactions fund balance will increase by

A city's General Fund provides a two-year loan to the Internal Service Fund. To record this transaction the city should record a debit to what account in the General Fund?

A new computer, which had been estimated to cost $28,000, was received for an activity of a special revenue fund. The actual cost of the computer was $29,400. To record this in the special revenue fund,

Which fund balance account may contain a negative balance?

Ledford County levied property taxes of $10,000,000, 2% of which is expected to be uncollectible. Prior to this new levy, the county still had $ 350,000 of uncollected taxes from previous years. How much should be reported as Taxes Receivable after the new levy has been recorded?

Which of the following is an appropriate use of a fund balance restriction?

Matching: Financial Statement Preparation Certain accounts from the general ledger or other transactions of the City of Six Mile are listed below. For each account or transaction identify the section of the appropriate financial statement where each account would be reported. If an account is not reported on either statement, indicate that by using a X. A section may be used more than once.

Transactions in governmental accounting may be classified as being either: • External - transactions between the governmental unit and its citizens, employees, suppliers, creditors, or other governments. • Internal - transactions between funds A listing of all possible transactions would then look like this: A. External transactions B. Long-term loans C. Transfers D. Interfund services provided and used E. Reimbursements F. Short-term loans G. Other transactions between funds that do not meet the criteria B to F Identify the type of transaction that best fits each of the following events: 1. A government-owned and operated electric utility billed its industrial and commercial users $2,000,000 for electric usage. 2. The same government-owned and operated electric utility billed the local government $150,000 for electric usage. The entire bill was sent to the General Fund. 3. Some General Fund money was advanced to a Capital Projects Fund to allow construction on a project to begin before related bonds were to be issued. The amount is to be repaid in 6 months. 4. A vehicle used by the Parks and Recreation Activity, which is accounted for in the General Fund, was reassigned to the Golf course, which is accounted for in an Enterprise Fund. 5. Property taxes were levied by the General Fund on the property owners of the City. 6. The annual payment from the General Fund to a Debt Service Fund for the annual long-term debt principal and interest payment on some serial bonds issued five years earlier by the General Fund. 7. An invoice that should have been paid by Special Revenue Fund #1 was erroneously paid by Special Revenue Fund #2. Money was paid by SRF #1 to SRF #2 to correct the error. 8. Computer support for government functions is provided centrally by an Automated Data Processing Internal Service Fund which bills each department monthly based on CPU time. The bill for November was sent to the General Fund for payment. 9. Special Revenue Fund cash was contributed to establish an Enterprise Fund. 10. A payment from an Enterprise Fund to the General Fund for utilities paid for with General Fund cash and recorded as expenditures in the General Fund in the current year (See entry 2). 11. The remaining assets of a Debt Service Fund were transferred to the General Fund for use in operations. 12. The General Fund provided money to an Enterprise Fund to purchase capital assets. This payment is to be repaid in 5 years without interest.

Which of the following should be reported in the statement of revenues, expenditures, and changes in fund balance of a General Fund?

Which of the following is not a General Fund financial statement?

Each of the following transactions would decrease fund balance in the General Fund except

If an Enterprise Fund transfers $10,000 to the General Fund and the General Fund loans $15,000 to an Internal Service Fund, the effect on the fund balance of the General Fund would be

Prepare, using good form, a skeleton General Fund Statement of Revenues, Expenditures, and Changes in Fund Balances. (B) Next, insert the number representing each of the following items in the appropriate location in the statement. If any item is not reported in the statement, explain why not. 1. Property taxes levied for and collected in the current year 2. Estimated cost of goods ordered but not received by year end 3. Transfer to another fund 4. Salary costs incurred during the year 5. Payment to retire long-term note principal 6. Payment of interest on long-term note 7. Accrued interest on long-term note 8. Receipt of proceeds of short-term note 9. Payment of interest on short-term note 10. Accrued interest on short-term note 11. Payment to retire principal of short-term note 12. Payment to establish an Enterprise Fund activity; no repayment expected 13. Long-term loan from the General Fund to an Internal Service Fund 14. Short-term loan from the General Fund to a Capital Projects Fund 15. Purchase of equipment 16. Purchase of temporary investment in securities 17. Receipt of proceeds from sale of fixed asset 18. Property taxes collected in advance on next year's tax levy 19. Depreciation of equipment 20. Purchase of electricity from the Electric Enterprise Fund

Which of the following could never be considered part of assigned fund balance?

Hannah County has a total fund balance in the General Fund as of the end of the year of $1,565,000. Assume the following: -The budget officer decided to set aside $405,000 for new road maintenance. The county's governing board had previously given her this authority. -Purchase orders of $41,000, which were not related to restricted or committed resources, were outstanding at year end. -Unspent restricted drug enforcement grant proceeds of $75,000. -The county's governing board passed an ordinance to use $500,000 for construction of a fleet maintenance facility. In the year-end financial statements, Hannah County would report unassigned fund balance and assigned fund balance, respectively, in the General Fund as

The following information pertains to the Scott County General Fund: Expenditures $14,800,000 Revenues $14,200,000 The change in fund balance Scott County's General Fund for the year is a

A local school district issued a short-term note payable to purchase $500,000 of recreation equipment. The note will be repaid with General Fund resources. The General Fund would record

For a transaction to be classified as an extraordinary item it must be