AICPA Governmental Accounting 3

Question 1

GASB Statement No. 54 classifies fund balance in governmental funds into how many categories?

Accepted Answer

Five

Answer

GASB No. 54 established five fund balance classifications: nonspendable, restricted, committed, assigned, and unassigned.

Question 2

The 'nonspendable' fund balance classification includes amounts that:

Accepted Answer

Cannot be spent because they are in non-liquid form or must remain intact

Answer

Nonspendable fund balance includes amounts not in spendable form (such as inventory, prepaid items, or long-term receivables) or legally required to remain intact.

Question 3

Under modified accrual accounting, property tax revenues are recognized:

Accepted Answer

In the period for which levied if collected within the availability period

Answer

Property taxes are recognized as revenue in the period for which levied, provided they are collected within the availability period, typically 60 days after year-end.

Question 4

Which of the following appears in a Statement of Cash Flows for a proprietary fund but does NOT apply to governmental funds?

Accepted Answer

Cash flows from capital and related financing activities

Answer

The proprietary fund Statement of Cash Flows includes 'capital and related financing activities' as a category; governmental funds do not prepare a Statement of Cash Flows.

Question 5

A government issues general obligation bonds to finance capital construction. The proceeds should be recorded in:

Accepted Answer

A capital projects fund

Answer

Proceeds from bonds issued to finance capital improvements are recorded in a capital projects fund, which accounts for resources used for acquisition or construction of major capital facilities.

(AICPA) American Institute of Certified Public Accountants Practice Test

(AICPA) American Institute of Certified Public Accountants Practice Test

AICPA Governmental Accounting 3