FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 9: Business-Type Activities

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 21

True/False

Review LaterAdd Note

Review Later

GASB 83 addresses retirement of nuclear reactors and sewage treatment plants.

A) True
B) False

Correct Answer

verified

Show Answer

Question 22

Multiple Choice

Review LaterAdd Note

Review Later

When a government enterprise fund has restricted assets on its statement of net position, which of the following is a true statement?

A) The total of the restricted assets in the asset section will be equal to the "restricted net position" amount in the equity section.
B) The total of the restricted assets will be offset by a liability of an equal amount.
C) The total of the restricted assets less related liabilities will be equal to the "restricted net assets" amount in the equity section.
D) None of the above statements is true.

E) All of the above
F) A) and C)

Correct Answer

verified

Show Answer

Question 23

True/False

Review LaterAdd Note

The costs of cleaning up toxic substances seeping out from an abandoned county dump into the town water supply may be accounted for in either a governmental fund or an enterprise fund.

Because of the rising cost of commercial insurance, many governments have elected to be "self-insured." Explain what being "self-insured" means. Explain the difference in the accounting for self-insurance activities between a governmental fund and a proprietary fund.

"Cash flows from noncapital financing activities" include which of the following as outflows

Any internal service fund balances that are not eliminated in the consolidation process should generally be presented on the government-wide financial statements

A city's comptroller is distraught because depreciation cannot be recorded in a general fund. Moreover, for political reasons the city council never permits the general fund to have a substantial surplus balance. As a consequence the city is unable to "save" resources to replace aging capital assets. The comptroller has heard that it is possible indirectly to charge depreciation in a general fund by transferring capital assets to an internal service fund and correspondingly to build up a cash reserve to replace the capital assets. Is the comptroller correct? If so, explain how an internal service fund can be used to charge depreciation in the general fund and thereby create a cash reserve of what would otherwise be general fund assets.

GASB standards require that governments advance fund landfill closure and postclosure costs on an actuarial basis similar to the advance funding of pension plans.

"Cash flows from capital and related financing activities" include which of the following as inflows

In both the fund statements and the government-wide statements, business-type activities and internal service funds are on a full accrual basis, and their measurement focus is on all economic resources.

A statement of revenues, expenses, and changes in net position of a proprietary fund should include which of the following in addition to operating revenues, operating expenses, and ending net position?

Which of the following is the best rationale/justification for reporting the business-type activities of a government in a separate fund?

The appropriate measurement focus for the business-type activities of the Raymond City is

When insurance premiums went through the roof, Shorte City decided to "self insure." It established an internal service fund (ISF), setting aside resources for potential claims in the new fund. During the year, the following transactions were recorded in the ISF: -The ISF recognized $1.5 million in claims expense/liabilities in accordance with GASB standards and paid $1.3 million of those claims. -Based on an actuarial calculation, the ISF billed the other funds of the city for $2.0 million. Of this amount, $1.2 million was billed to the city's general fund and $0.8 million was billed to the city's water and sewer enterprise fund. The actuarial valuation included a reasonable provision for future catastrophe losses of $0.3 million. REQUIRED: a) Prepare journal entries to record these transactions in the city's self-insurance ISF. b) Suppose, instead, that the city reported its self-insurance activities in the general fund. Prepare journal entries to record these transactions in the City's general fund. Assume that any excess was allocated ratably (proportionately) between the general fund and the water and sewer fund.

Which of the following factors do rating agencies take into account when considering revenue bond debt?

Which of the following statements about accounting for pollution remediation costs is NOT true?

Governments may elect to account for their landfill activities in either a governmental or an enterprise fund. Explain the differences that would result if one government elected to account for its landfill activities in its general fund and another government elected to account for its landfill activities in an enterprise fund.

Governments generally do not have to get formal legislative approval for enterprise fund budgets or incorporate them into their accounting systems.

A proprietary fund of a government has some donor-restricted assets. Which of the following best describes where and how those assets will generally be displayed in the fund's financial statements?

The following list of cash flows was taken from the Camber City airport fund's statement of cash flows. All amounts are in thousands. REQUIRED: Put these cash flow amounts in the form of a cash flows statement for the airport. Calculate and include a line for cash on hand at the end of the period.