(Multiple choice-General and Special Revenue Funds)
Question 1. The budget of Sanger County shows estimated revenues in excess of appropriations. When preparing budgetary entries at the beginning of the fiscal year, an increase will be recorded in which of the following accounts?
a. Budgetary fund balance
b. Encumbrances
c. Due from other funds
d. Surplus
Question 2. Which of the following involves a routine movement of cash from the General Fund to a Debt Service Fund in order to provide resources to pay interest and principal on a bond issue?
a. An interfund reimbursement
b. An interfund loan
c. An interfund service provided and used
d. An interfund transfer
Question 3. At the end of fiscal 2012, Carson City had outstanding encumbrances of $15,000. Although the city follows a policy of allowing outstanding encumbrances to lapse, it plans to honor the related purchase orders in fiscal 2013. At year-end, the city's accountant should take which of the following actions?
a. Credit Appropriations
b. Credit Nonspendable fund balance
c. Credit Assigned fund balance
d. Credit Budgetary fund balance
Question 4. If the City of Castletown sells a surplus ambulance, the entry to record this sale on the books of the General Fund should include which of the following?
a. A debit to Unassigned fund balance
b. A debit to Encumbrances-capital equipment
c. A credit to Other financing sources-proceeds from sale of general fixed assets
d. A credit to a Vehicles fixed asset account
Question 5. The town council of Bayou Brilleaux adopted a budget for fiscal 2013 that anticipated revenues of $750,000 and expenditures of $800,000. Which entry is used to record this budget in the accounts?
Question 6. Which of the following best expresses the accounting standard regarding accounting for purchases and inventories in the General Fund?
a. They must be accounted for in a manner similar to that of commercial enterprises.
b. All purchases must be accounted for as expenditures upon acquisition.
c. Purchases may be recorded as expenditures either when acquired or consumed; if accounted for as expenditures when acquired, year-end inventories are ignored.
d. Purchases may be recorded as expenditures either when acquired or consumed; if accounted for as expenditures when acquired, year-end inventories must be reported if the amount is significant.
Question 7. The budget of the General Fund of the City of Olde Glen shows an appropriation for capital equipment of $150,000. So far a fire engine costing $50,000 has been received and paid for. Another fire engine has been ordered, and an encumbrance for $60,000 is outstanding. How much can the city legally spend for a third fire engine this year?
a. $40,000
b. $100,000
c. $90,000
d. $0