GAC GAC Public Sector Fund Accounting 1

Question 1

Under GASB standards, which fund type is used to account for resources that are legally restricted to expenditure for specific purposes, such as debt service?

Accepted Answer

Debt Service Fund

Answer

Debt Service Funds account for the accumulation of resources for, and the payment of, long-term debt principal and interest.

Question 2

Which basis of accounting is required for governmental fund types under GASB standards?

Accepted Answer

Modified accrual basis

Answer

Governmental funds use the modified accrual basis, recognizing revenues when measurable and available and expenditures when the liability is incurred.

Question 3

Which of the following is classified as a proprietary fund under GASB?

Accepted Answer

Enterprise Fund

Answer

Enterprise Funds are proprietary funds used to report activities for which fees are charged to external users, similar to private-sector businesses.

Question 4

A government operates a central motor pool that charges other departments for vehicle use. This activity should be reported in which fund type?

Accepted Answer

Internal Service Fund

Answer

Internal Service Funds account for activities that provide goods or services to other departments within the same government on a cost-reimbursement basis.

Question 5

Under GASB, the General Fund is used to account for which of the following?

Accepted Answer

All financial resources except those required to be in another fund

Answer

The General Fund is the chief operating fund of a government, accounting for all financial resources not required to be accounted for in another fund.

(GAC) Governmental Accounting Certification Practice Test

(GAC) Governmental Accounting Certification Practice Test

GAC GAC Public Sector Fund Accounting 1