43. Which of the following is true with respect to Special revenue funds?
A) Special revenue funds are used when it is desirable to provide separate reporting of resources that are designated for specific purposes.
B) Special revenue funds are used when it is desirable to provide separate reporting for funds provided by other governments to support capital projects.
C) Special revenue funds are used when it is desirable to provide separate reporting of resources that are restricted or committed as to expenditure for purposes other than debt service or capital projects.
D) Both B and C
44. Which of the following is false with respect to Special revenue funds?
A) Resources appropriately reported within proprietary or fiduciary funds are excluded from special revenue funds.
B) A special revenue funds would be used to account for taxes which are required by state law to be used by the government to support specific activities.
C) Special revenue funds may be used for any designated purpose to segregate revenues and ensure compliance with restrictions.
D) None of the above
45. Which of the following is true regarding the use of Special Revenue Funds?
A) Special Revenue Funds may be used whenever a government wishes to segregate income for specific purposes.
B) Special Revenue Funds are appropriate if the sole source of resources are assigned funds
C) Once a Special Revenue Fund is established, it will continue to be a Special Revenue Fund until all resources are exhausted.
D) Special Revenue Funds may only be used when a substantial portion of the resources are provided by restricted or committed revenue sources.
46. Which of the following statements is not true regarding modified accrual accounting?
A) Expenditures and fund liabilities are recorded when goods and services are received.
B) Debt service expenditures for principal and interest are accrued.
C) Expenditures for claims and judgments and landfill postclosure care costs of governmental funds should be recognized to the extent that the liabilities are going to be paid with available resources.
D) Compensated absences and special termination benefits of governmental funds that will not be paid with available resources should be reported as liabilities in the government-wide statements.
47. Regarding interfund transactions, which of the following is not correct?
A) Transaction between funds are not assumed to be arm’s length in nature
B) Failure to properly report interfund transactions will result in two funds being misstated.
C) Interfund transactions must be repaid.
D) Interfund reimbursement is a payment by one fund to second fund to repay it for a purchase which belongs in the first fund.
48. Which of the following is an interfund transaction?
A) Interfund services provided and used
B) Interfund transfers
C) Interfund loans
D) All of the above are interfund transactons
49. Which of the following statements is not correct?
A) Transactions between funds of the same government may not be assumed to be arms’ length in nature.
B) Most interfund transactions are eliminated in the government-wide statements
C) Interfund reimbursements are classified as other financing sources or uses
D) Interfund transfers are classified as other financing sources or uses
50. The journal entry to record the budget of a Special Revenue Fund would include:
A) A debit to appropriations Control
B) A credit to Estimated Revenues Control
C) A debit to Estimated Revenues Control
D) None of the above, Special Revenue Funds do not record budgets
51. The journal entry to record the re-establishment of encumbrances that were outstanding at the close of the prior period would include:
A) A credit to Budgetary Fund Balance – Reserve for Encumbrances
B) A debit to Budgetary Fund Balance – Reserve for Encumbrances
C) A credit to Encumbrance Control
D) A and B would both be included in the journal entry
52. The journal entry to record the prior year’s deferred property taxes (those expected to be collected more than 60 days beyond year end) as revenue in the current year would include:
A) A debit to Revenues Control
B) A debit to Deferred Revenues
C) A credit to Revenues Control
D) B and C would both be included in the journal entry