FREE CGFM MCQ Questions and Answers
Due to the Governmental Funds' present emphasis on financial measurement, they do not report:
The accrual basis of accounting and the economic resources measurement focus are used by proprietary and fiduciary funds. Like private sector companies, proprietary funds concentrate on changes in economic resources and pose the following questions:
Proprietary funds, which include enterprise funds and internal service funds, utilize the economic resources measurement focus and accrual basis of accounting. This means that they account for transactions and events based on the impact they have on the fund's total economic resources.
Every year, the city of Mudville consumes 1600 oil filters. The order placement fee is $5.00. The price per unit is $3.50. The carrying cost per unit is &0.70(0.20x$3.50), and the carrying cost as a percentage is 20%. Additionally, each order requires a lead time of three working days, and there are 255 working days in a year. Where does the reordering begin?
Governments may also report on an interim basis in addition to financial interim reports:
All unrestricted contributions, gifts, and other sources of money that may be utilized for any purpose are collectively referred to as funds, right?
A modified depreciation strategy is applied in government organizations. This updated method does not record depreciation costs, but it capitalizes upgrades and additions and spends maintenance costs. The modified strategy's reasoning is as follows:
In government organizations, the modified approach for depreciation does not eliminate depreciation charges due to the assumption of indefinite useful life for buildings. Rather, the modified approach for depreciation is based on the concept of "modified accrual accounting" used in governmental accounting.
Interfund transfers of assets (such as money or goods) without repayment and _____________ are examples of non-reciprocal interfund transactions.
Non-reciprocal inter-fund activities include inter-fund transfers of assets without repayment and interfund reimbursements.
Interfund transfers of assets without repayment occur when one fund transfers cash or goods to another fund without the expectation of repayment. This can happen for various reasons, such as the need to provide funding for specific programs or projects within another fund.