Multiple Choice Questions
50.Which of the following statements is true regarding proprietary funds?
A)Proprietary funds use the modified accrual basis of accounting.
B)Accruals and deferrals common to business accounting are recorded in proprietary funds.
C)GASB standards require budget-actual reporting for proprietary funds.
D)The purchase ofa capital asset is recorded as an expenditure in proprietary funds.
51. Centralized purchasing, computer services, and janitorial services are examples of activities that are commonly reported in:
A) Enterprise funds.
B) Capital project funds.
C) Debt service funds.
D) Internal service funds.
52.Internal service funds account for
A) Activities that produce goods or services to be provided to other governmental units on a cost reimbursement basis.
B) Activities that produce goods or services to be provided to outside consumers units on a cost reimbursement basis.
C) Both A and B.
D) None of the above.
53.An example of an activity that would
not
normally be accounted for in an internal service fund would be:
A)Motor pool.
B)Print shop.
C)Garbage collection.
D)Central storeroom.
54.An example of an activity that would
not
normally be accounted for in an enterprise fund would be:
A)Swimming pool.
B)Printing Services.
C)Airport.
D)Lottery.
55.Which financial statements are required for a proprietary fund?
A)Income statement, Statement of Net Position and Statement of Cash Flows
B)Statement of Revenues, Expenses and Changes in Fund Net Position, Statement of Net Position and Statement of Cash Flows
C)Statement of Revenues, Expenses and Changes in Fund Balance and Statement of Net Position, and Statement of Cash Flows
D)Statement of Revenues, Expenses and Changes in Fund Net Position and Statement of Net Position
56.Which of the following is correct with respect to Internal Service Funds?
A)Internal service funds use modified accrual accounting and the current financial resourcesmeasurement focus
B)Net position is to be reported in two categories: assigned and unassigned
C)Internal service funds account for long-term debt but not capital assets
D)All of the above are false statements
57.The categories of Net Position for a proprietary fund are classified within which of the following categories?
A)Net Investment in Capital Assets, Restricted Net Position and Unrestricted Net Position
B)Spendable Net Positionand SpendableNet Position
C)CommittedNet Position, Assigned Net Positionand UnassignedNet Position
D)Restricted Fund balance, Committed Fund balance, Assigned Fund Balance, and Nonspendable Fund Balance
58.Restricted Net Position for a proprietary fund is:
A)Net resources whose use is restricted by users of the services.
B)Reported net of depreciation.
C)Reported net of accumulated depreciation and any outstanding debt used to acquire the asset.
D)Net resources whose use is restricted by creditors, grantors or laws or regulations of other governments.
59.Which of the following is
not
true regarding proprietary funds?
A)Enterprise funds are used by governments to account for services provided to the general public on a user-charge basis.
B)General obligation bonds that will be paid from enterprise revenues must be reflected in the accounts of enterprise funds.
C)Internal service self-insurance should set fees based on anticipated charges or a long-range plan to break even over time.
D)The operation of internal service funds has no impact on other funds because it is run as a business and provides services that would have been purchased elsewhere by the other funds.