Practice Test Geeks(AICPA) American Institute of Certified Public Accountants Practice Test
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Governmental Accounting Flashcards

7 cards from real AICPA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Governmental Accounting flashcards as text

  1. A government records an encumbrance in the General Fund when:

    Answer: A purchase order is issued

    An encumbrance is recorded when a purchase order or contract is signed, reserving budget authority before the actual expenditure occurs.

  2. Infrastructure assets in government-wide statements may be accounted for using which alternative to depreciation?

    Answer: Modified approach

    GASB allows the modified approach for infrastructure assets where governments maintain them at an established condition level and report preservation costs rather than depreciation.

  3. Which fund type accounts for resources legally restricted to specified purposes other than debt service or capital projects?

    Answer: Special revenue fund

    Special revenue funds account for proceeds of specific revenue sources restricted or committed to expenditure for specified purposes other than debt service or capital outlay.

  4. Under GASB, which of the following would be reported as a fiduciary fund?

    Answer: Pension trust fund

    Fiduciary funds, including pension trust funds, account for assets held in a trustee or agency capacity for others and cannot be used to support the government's own programs.

  5. When a government transfers resources from the General Fund to a debt service fund, this is classified as a:

    Answer: Transfer

    Flows of resources between funds of the same government are classified as interfund transfers, not revenues or expenditures, to avoid double-counting.

  6. The net position section of a government-wide statement of net position does NOT include which component?

    Answer: Reserved fund balance

    Government-wide statements present net position as net investment in capital assets, restricted, and unrestricted — fund balance categories apply only to governmental fund statements.

  7. Under GASB No. 14, a component unit is included in a primary government's financial report primarily when:

    Answer: The component unit is financially accountable to the primary government

    GASB No. 14 requires inclusion of a component unit when the primary government is financially accountable, considering board appointment authority and financial benefit/burden relationships.