AICPA Governmental Accounting 2

Question 1

A government records an encumbrance in the General Fund when:

Accepted Answer

A purchase order is issued

Answer

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

Question 2

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

Accepted Answer

Modified approach

Answer

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

Question 3

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

Accepted Answer

Special revenue fund

Answer

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.

Question 4

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

Accepted Answer

Pension trust fund

Answer

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.

Question 5

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

Accepted Answer

Transfer

Answer

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

(AICPA) American Institute of Certified Public Accountants Practice Test

(AICPA) American Institute of Certified Public Accountants Practice Test

AICPA Governmental Accounting 2