ACC 410 Week 4 Quiz – Strayer
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Quiz 3 Chapter 4
Chapter 4
Governmental Activities -
Recognizing Revenues
TRUE/FALSE (CHAPTER 4)
1. If an entity elects to focus on all
economic resources (both current and long-term assets and liabilities), then it
should adopt a modified accrual basis of accounting.
2. The budgetary measurement focus of
governments is determined by applicable state or local laws.
3. The revenue-recognition issues facing
governments are simpler to resolve than those of businesses.
4. Governmental activities tend to derive the
majority of their revenues from exchange transactions.
5. In accounting for property taxes, under the
modified accrual basis, existing standards provide that, except in unusual
circumstances, revenues should be recognized only if cash is expected to be
collected within sixty days of year-end.
6. Ad valorem taxes are taxes that are based
on value.
7. Income taxes are classified as ad valorem
taxes.
8. Sales taxes are taxpayer assessed, that is,
parties other than the beneficiary government determine the tax base.
9. All intergovernmental grants are accounted
for in exactly the same way.
10. Revenues that cannot be classified as general
revenues are by default considered program revenues.
11. Taxes that are imposed on the reporting government’s
citizens are considered general revenues, even if they are restricted to
specific programs.
MULTIPLE CHOICE (CHAPTER 4)
1. As used in governmental accounting,
interperiod equity refers to a concept of
a)
providing the same level of services to citizens each year.
b)
measuring whether current year revenues are sufficient to pay for
current year services.
c)
levying property taxes at the same rate each year.
d)
requiring that general fund budgets be balanced each year.
2. For fund financial statements, the
measurement focus and basis of accounting used by governmental fund types are
a)
current financial resources and modified accrual accounting.
b)
economic
resources and modified accrual accounting.
c)
financial resources and full accrual accounting.
d)
economic resources and full accrual accounting.
3. The modified accrual basis of accounting is
used in presenting the fund financial statements of the governmental funds because
a)
it is the superior method of accounting for the economic resources of
any entity.
b)
it provides information as to the extent the entity achieved interperiod
equity.
c)
it is budget oriented while facilitating comparisons among entities.
d)
it results in accounting measurements based on the substance of
transactions.
4. As used in defining the term
‘modified accrual basis of accounting’, available means
a)
received in cash.
b)
will be received in cash within 60 days of year-end.
c)
collection in cash is reasonably assured.
d)
collected within the current period or expected to be collected soon
enough thereafter to be used to pay liabilities of the current period.
5. Under the accrual basis of accounting,
property tax revenues are recognized
a)
when they are received in cash.
b)
in the year for which they were levied.
c)
in the year for which they were levied and when collection in cash is
reasonably assured.
d)
when they are available to finance expenditures of the fiscal period.
6. Under the modified accrual basis of
accounting, the amount of property tax revenues that should be recognized by a
governmental entity in the current year related to the current year levy will
be
a)
the total amount of the levy.
b)
the expected collectible portion of the levy.
c)
the portion of the levy collected.
d)
the portion of the levy collected in the current year or within sixty
days of the fiscal period.
7. Under the modified accrual
basis of accounting used by a governmental entity, investment revenues for the
current period should include
a)
only interest and dividends received.
b)
all interest and dividends received during the period plus all accruals
of interest and dividends earned.
c)
all interest and dividends received plus gains and losses on securities
that were sold during the period.
d)
all interest and dividends received, all gains and losses on securities
sold and all changes in market values on securities held in the portfolio at
year-end.
8. Under the accrual basis of accounting used
by a governmental entity, investment revenues for the current period should
include
a)
only interest and dividends received.
b)
all interest and dividends received during the period plus all accruals
of interest and dividends earned.
c)
all interest and dividends received plus gains and losses on securities
that were sold during the period.
d)
all interest and dividends received, all gains and losses on securities
sold and all changes in market values on securities held in the portfolio at
year-end.
9. Under the modified accrual basis of
accounting, derived nonexchange revenues are recognized by a governmental
entity as revenue
a)
when the underlying exchange transaction occurs.
b)
when available.
c)
when the underlying event occurs and the revenue is available.
d)
when earned.
10. Under the accrual basis of accounting,
derived nonexchange revenues are recognized by a governmental entity as revenue
a)
when the underlying exchange transaction occurs.
b)
when available.
c)
when the underlying event occurs and the revenue is available.
d)
when earned.
11. Under the modified accrual basis of
accounting, gains and losses on disposal of fixed assets
a)
are not recognized.
b) are recognized when the proceeds (cash) of
the sale are received (on the installment basis).
c)
are recognized only if there is a gain.
d)
are recognized when the sale occurs, regardless of when the cash is
collected.
12. Under the accrual basis of accounting, gains
and losses on disposal of fixed assets
a)
are not recognized.
b)
are recognized when the proceeds (cash) of the sale are received (on the
installment basis).
c)
are recognized only if there is a gain.
d)
are recognized when the sale occurs, regardless of when the cash is
collected.
13. Under the
modified accrual basis of accounting, fines, license fees, permits, and other
miscellaneous revenue are generally recognized
a)
when cash is received.
b)
when assessed.
c)
when an enforceable legal claim exists.
d) when an enforceable legal
claim exists and the revenue is available.
14. Under the
accrual basis of accounting, fines, license fees, permits, and other
miscellaneous revenue are generally recognized
a)
when cash is received.
b)
when assessed.
c)
when an enforceable legal claim exists.
d)
when an enforceable legal claim exists and the revenue is available.
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