GAC GAC Public Sector Fund Accounting 2

Question 1

Which of the following fund balance classifications under GASB Statement No. 54 represents amounts that cannot be spent because they are not in spendable form?

Accepted Answer

Nonspendable fund balance

Answer

Nonspendable fund balance includes amounts that cannot be spent because they are not in spendable form, such as inventories, prepaid items, or long-term receivables.

Question 2

A Special Revenue Fund is best described as a fund used to account for:

Accepted Answer

Proceeds of specific revenue sources that are restricted or committed for specified purposes

Answer

Special Revenue Funds account for revenue sources that are restricted, committed, or assigned for specific purposes other than debt service or capital projects.

Question 3

Under modified accrual accounting, revenues are recognized when they are:

Accepted Answer

Measurable and available within 60 days of year-end

Answer

Under modified accrual, revenues are recognized when they are measurable and available, meaning collectible within the current period or soon enough to pay current-period liabilities.

Question 4

Capital Projects Funds are used to account for:

Accepted Answer

Acquisition or construction of major capital facilities

Answer

Capital Projects Funds account for financial resources segregated for the acquisition or construction of major capital facilities other than those financed by proprietary or trust funds.

Question 5

Which of the following best describes a Permanent Fund under GASB?

Accepted Answer

A fund used to report assets legally restricted so only earnings may be used for public purposes

Answer

Permanent Funds report resources that are legally restricted so that only earnings, not principal, may be used to support government programs for the benefit of the public.

(GAC) Governmental Accounting Certification Practice Test

(GAC) Governmental Accounting Certification Practice Test

GAC GAC Public Sector Fund Accounting 2