Municipal Accounting Question Bank
Course Introduction
Municipal Accounting focuses on the principles, procedures, and regulatory frameworks governing financial management in local government entities. The course covers topics such as fund accounting, budget preparation, financial reporting, and auditing practices specific to municipalities. Students will learn how to apply governmental accounting standards, understand the role of public funds, and ensure transparency and accountability in managing city or town finances. Emphasis is placed on the interpretation and use of financial information for decision-making, as well as compliance with state and federal regulations affecting municipal operations.
Recommended Textbook
Essentials of Accounting for Governmental and Not for Profit Organizations 11th Edition by Copley
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14 Chapters
1814 Verified Questions
1814 Flashcards
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Chapter 1: Introduction to Accounting and Financial
Reporting for Governmental and Not-For-Profit Organizations
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134 Verified Questions
134 Flashcards
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Sample Questions
Q1) Which of the following is an objective of federal financial reporting?
A) Budgetary Integrity
B) Operating Performance
C) Stewardship
D) All of the above
Answer: D
Q2) Which of the following use current financial resources measurement focus?
A) Fiduciary fund statements
B) Governmental fund statements
C) Proprietary fund statements
D) Internal Service fund statements
Answer: B
Q3) The FASAB was established to recommend accounting and financial reporting standards for governmental and nonprofit enterprises.
A)True
B)False
Answer: False
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Chapter 2: Overview of Financial Reporting for State and Local Governments
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135 Verified Questions
135 Flashcards
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Sample Questions
Q1) Which of the following is true with respect to the General Fund
A) The General Fund is considered to be a major fund if the combined total of assets, liabilities, revenues and expenses exceeds 10% of the total of all governmental funds
B) The General Fund is always considered to be a major fund when preparing fund basis financial statements.
C) The General Fund is considered to be a major fund when preparing fund basis financial statements if it bears a financial benefit or burden to the primary government.
D) The General Fund is not reported as part of the CAFR.
Answer: B
Q2) Which of the following funds requires a Budgetary Comparison Schedule?
A) Enterprise Funds
B) Internal Service Funds
C) Investment Trust Funds
D) General Fund
Answer: D
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Chapter 3: Modified Accrual Accounting: Including the Role of
Fund Balances and Budgetary Authority
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143 Verified Questions
143 Flashcards
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Sample Questions
Q1) What would be the total Assigned fund balance?
A) $105,000
B) $455,000
C) $ 67,500
D) $ 80,000
Answer: D
Q2) The term,Fund Balance,is used to indicate the residual net assets of a proprietary fund.
A)True
B)False
Answer: False
Q3) Expenditure classifications by function includes all of the following except
A) Debt Service
B) General Government
C) Public Safety
D) Highways & Streets
Answer: A
Page 5
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Chapter 4: Accounting for the General and Special Revenue Funds
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125 Verified Questions
125 Flashcards
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Sample Questions
Q1) Governmental fund financial statements are prepared using the accrual basis of accounting.
A)True
B)False
Q2) The city of Canandaigua receives proceeds from the sale of land,the transaction is considered to be a special item.The proceeds are:
A) Reported as a revenue.
B) Reported separately after other financing sources and uses.
C) Reported as an item that changes the Fund Balance.
D) Not recorded but the gain on the sale is.
Q3) Which of the following is an interfund transaction?
A) Interfund services provided and used
B) Interfund transfers
C) Interfund loans
D) All of the above are interfund transactons
Q4) The term special item is defined as:
A) Frequent and unusual but within management's control.
B) Unusual or infrequent but within management's control.
C) Frequent and unusual and not within management's control.
D) Unusual or infrequent and not within management's control.
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Chapter 5: Accounting for Other Governmental Fund Types:
Capital Projects, Debt Service, and Permanent
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152 Verified Questions
152 Flashcards
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Sample Questions
Q1) A special assessment tax is
A) Assessed against all property owners following a referendum in which voters approved the special project being constructed.
B) A waiver of property taxes for businesses willing to locate within a government's jurisdiction.
C) Assessed only against certain property owners who are deemed to benefit from the service or project being paid for by the proceeds of the special assessment levy.
D) None of the above
Q2) How should the acquisition of general fixed assets acquired by capital leases be accounted for?
Q3) General fixed assets that are acquired with governmental fund resources are reported as assets in the:
A) General Fund.
B) Capital Projects Fund.
C) General Fund or Capital Projects Fund, depending upon which fund provided the resources.
D) None of the above.
Q4) What is the difference between Permanent Funds and Private Purpose Trust Funds?
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Chapter 6: Proprietary Funds
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130 Flashcards
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Sample Questions
Q1) Postclosure costs are recorded in a solid waste landfill enterprise fund at the present value of estimated future costs.
A)True
B)False
Q2) Which of the following statements is true regarding estimated closure costs for municipal solid waste landfills,assuming that it is operating as an enterprise fund?
A) The estimated closure costs are expensed fully at the time of the estimate.
B) A portion of those future estimated costs is to be charged as an expense and a liability recorded based on a units-of-production method.
C) Modified accrual principles apply and the amount expensed is limited to amounts expected to be paid during the year and within 60 days of year end.
D) None of the above is true.
Q3) Revenue bonds sold by a water utility fund,upon sale,would be recorded:
A) In an enterprise fund as "Other Financing Source."
B) In an enterprise fund as a liability.
C) In the general long-term debt accounts as a liability.
D) In an enterprise fund as an addition to net assets.
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Page 8
Chapter 7: Fiduciary Trustfunds
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154 Verified Questions
154 Flashcards
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Sample Questions
Q1) Which type of pension plan is required to pay out a certain sum,generally based on a percentage of salary upon retirement and the number of years of service?
A) Defined Benefit
B) Defined Contribution
C) Contributory
D) Noncontributory
Q2) Which is true regarding the basis of accounting for fiduciary funds?
A) All are accounted for using the same basis of accounting and measurement focus as proprietary funds.
B) Agency funds are accounted for using the same basis of accounting and measurement focus as governmental funds, trust funds are accounted for using the same basis of accounting and measurement focus as proprietary funds.
C) Trust funds are accounted for using the same basis of accounting and measurement focus as governmental funds, and agency funds are accounted for using the same basis of accounting and measurement focus as proprietary funds.
D) All are accounted for using the same basis of accounting and measurement focus as governmental funds.
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Chapter 8: Government-Wide Statements, Capital Assets, Long-Term Debt
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143 Verified Questions
143 Flashcards
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Sample Questions
Q1) Governments have the option to capitalize infrastructure assets in the governmental funds' fund-basis financial statements.
A)True
B)False
Q2) On April 1,2014,a local government issued bonds in the amount of $1,500,000.The bonds were issued at par and carried an interest rate of 5%,payable October 1 and April 1.When moving from the change in fund balances in the governmental funds Statement of Revenues,Expenditures,and Changes in Fund Balances to the change in net Assets in the governmental funds column of the Statement of Activities,both for the fiscal year ended June 30,2014,the effect for the interest accrual only would be:
A) An increase of $18,750
B) A decrease of $18,750
C) A decrease of $37,500
D) An increase of $37,500
Q3) The difference between assets and liabilities in the government-wide statements is called Net Assets.
A)True
B)False
Q4) With regard to the government-wide statements,list the required statements.
Page 10
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Chapter 9: Accounting for Special-Purpose Entities, Including
Public Colleges and Universities
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105 Verified Questions
105 Flashcards
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Sample Questions
Q1) Public colleges typically report as special-purpose entities engaged only in business-type activities.
A)True
B)False
Q2) Which of the following is true regarding the Statement of Cash Flows for a public college?
A) A reconciliation is required, reconciling operating income in the Statement of Revenues, Expenses, and Changes in Net Assets to the cash flows provided (used) by operating activities.
B) Cash purchases of capital assets are reported as outflows in the capital related financing activities section.
C) Both of the above are true.
D) Neither of the above is true.
Q3) Special-purpose governmental entities that are engaged in a single business activity are not required to prepare government-wide financial statements,but may issue only enterprise fund statements.
A)True
B)False
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Chapter 10: Accounting for Private Not-For-Profit Organizations
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151 Verified Questions
151 Flashcards
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Sample Questions
Q1) Which of the following is not a condition for recording donated services?
A) The individual providing the service provides an invoice detailing the hours contributed but waives the requirement for payment.
B) The service requires a specialized skill and the donor possesses those skills.
C) The service would have been paid for if not donated.
D) The service creates or enhances a non-financial asset.
Q2) The Statement of Cash Flows for a private not-for-profit organization has four different classifications of cash flows.
A)True
B)False
Q3) According to FASB Statement No.116,Appendix D,how are not-for-profit organizations distinguished from a business?
Q4) An intention to give (such as being named in a will)is the same as an unconditional promise to give and can be recorded as revenue when the intention is made known.
A)True
B)False
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Page 12
Chapter 11: College and University Accounting Private Institutions
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125 Verified Questions
125 Flashcards
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Sample Questions
Q1) Funds that are restricted for a certain number of years and then released are considered to be quasi-endowments and are classified as temporarily restricted funds by private colleges and universities.
A)True
B)False
Q2) Private colleges and universities recognize contribution revenue in the year in which the unconditional pledge is made.
A)True
B)False
Q3) How should the income earned by a private college's endowment be classified?
Q4) A tuition waiver for a student who works as a graduate assistant is treated as compensation expense.
A)True
B)False
Q5) Private,Not-for-profit Colleges and Universities and Investor-owned Schools follow FASB standards and adhere to the accrual basis of accounting.
A)True
B)False
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Chapter 12: Accounting for Hospitals and Other Health Care
Providers
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) Dukes Medical Center performed charity care at a cost of $5,000 and a standard charge of $11,000.How much should Dukes recognize as revenue?
A) $11,000.
B) $ 6,000.
C) $ 5,000.
D) $ 0
Q2) Which of the following is not true regarding accounting and financial reporting for private not-for-profit hospitals?
A) Expenses may be unrestricted or temporarily restricted depending on donor intent. B) Fund accounting is not required.
C) The Statement of Cash Flows may use either the direct or indirect method.
D) Net assets are classified as Unrestricted, Temporarily Restricted or Permanently Restricted.
Q3) Contractual adjustments from insurance companies are reported as expenses in the Statement of Operations.
A)True
B)False
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Page 14
Chapter 13: Auditing, Tax-Exempt Organizations, and Evaluating Performance
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151 Verified Questions
151 Flashcards
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Sample Questions
Q1) The program expense ratio is calculated as follows: Total expenses / (Program service expenses + supporting service expenses).
A)True
B)False
Q2) Which of the following is a prohibited activity for a Tax-exempt Organization?
A) Make a Profit.
B) File a tax return.
C) Give money away.
D) Make financial contributions to a political candidate.
Q3) Which of the following is not considered to be a major user group by the GASB?
A) Citizen groups.
B) Investors and creditors.
C) Legislative and oversight officials.
D) Government executive branch officials.
Q4) A government publishes information about its fire department.What type of service efforts and accomplishments measure would Fire Loss per Capita represent?
A) Input
B) Output
C) Outcome
D) Efficiency
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Chapter 14: Financial Reporting by the Federal Government
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66 Verified Questions
66 Flashcards
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Sample Questions
Q1) The account Obligations - Undelivered Orders is debited when goods and services are received.
A)True
B)False
Q2) Identify (in order of occurrence)the steps in the federal budgetary authority process.
Q3) Apportionments are made at the agency level and assign portions of the appropriation to subunits or programs.
A)True
B)False
Q4) The Statement of Net Cost of a federal agency is prepared on the modified accrual basis of accounting.
A)True
B)False
Q5) Which of the following is required in a federal agency's financial report?
A) Statement of Revenues, Expenditures and Changes in Fund Balance
B) Statement of Changes in Net Position
C) Statement of Cash Flows
D) Statement of Activity
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