CGFO Fin Rpt Ch. 7-8 Blue Book

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Peg777
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CGFO Fin Rpt Ch. 7-8 Blue Book
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2013-11-12 05:14:49
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CGFO CPGO Financial Reporting Blue Book
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CGFO CPGO Financial Reporting Chapter 7-8 Blue Book
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  1. True or False. Gains and losses are described as other financing sources and other financing uses in a statement of resource flows prepared using the current financial resources measurement focus.
     
    False-Under the econ. resources measurement focus, a difference between what is given and which is received is treated as a gain or loss. Under the current financial resources measurement focus, the difference would be treated as an adj. to revenue.

  2. True or False. Measurement focus determines what is measured, while basis of accounting determines when recognition should occur.
     
    True-The basis of accounting is concerned with the timing of recognition.

  3. True or False. Under the accrual basis of accounting, revenue and expense recognition are unaffected by the timing of related cash flows.
     
    True-Under the accrual basis of accounting, transactions are recognized when they occur. Regardless of when cash is received or disbursed.

  4. Which basis of accounting is consistent with the economic resources measurement focus?
    A. Accrual
    B. Modified accrual
    C. Cash
    D. All of the above
    E. None of the above

     
    A. Accrual. The modified accrual basis of accounting and the cash basis of accounting are too narrow to be consistent with the economic resources measurement focus.

  5. True or False. The same item might qualify for recognition as revenue under both the accrual and modified accrual basis of accounting.
     
    True-Revenue that is either collectible soon after the close of the fiscal period would be recognized under both the accrual basis of accounting and the modified accrual basis of accounting.

  6. True or False. The same item might qualify for recognition as revenue under the accrual basis of accounting, but not under the modified accrual basis of accounting.
     
    True-Revenue not collectible soon after the close of the fiscal period would be recognized under the accrual basis of accounting, but not under the modified accrual basis of accounting.

  7. Which of the following would be recognized as an expenditure of the current period?
    A. Accrued interest
    B. Vacation leave earned but not taken
    C. Salaries and wages earned
    D. All of the above

     
    C. Salaries and wages earned. Governmental funds must report liabilities and related expenditures as they are incurred unless there is a special provision to the contrary in the authoritative standards. There is no such special provision for salaries and wages earned.
  8. Property tax would be classified as.
    A. Exchange transaction
    B. Exchange-like transaction
    C. Derived tax revenue
    D. Imposed nonexchange revenue
    E. Government-mandated nonexchange transaction
    F. Voluntary nonexchange transaction

     
    • D. Imposed nonexchange revenue. Property taxes are an assessment that does not involve an underlying exchange transaction.
  9. Sale of electricity to utility customers would be classified as.
    A. Exchange transaction
    B. Exchange-like transaction
    C. Derived tax revenue
    D. Imposed nonexchange revenue
    E. Government-mandated nonexchange transaction
    F. Voluntary nonexchange transaction

     
    A. Exchange transaction. A sale of electricity to utility customers involves the giving and receiving of equal value.

  10. Motor fuel tax would be classified as.
    A. Exchange transaction
    B. Exchange-like transaction
    C. Derived tax revenue
    D. Imposed nonexchange revenue
    E. Government-mandated nonexchange transaction
    F. Voluntary nonexchange transaction

     
    C. Derived tax revenue. A motor fuel tax is generated by an underlying exchange transaction.

  11. Ad valorem tax on personal property would be classified as.
    A. Exchange transaction
    B. Exchange-like transaction
    C. Derived tax revenue
    D. Imposed nonexchange revenue
    E. Government-mandated nonexchange transaction
    F. Voluntary nonexchange transaction

    • D. Imposed nonexchange revenue. Ad valorem taxes on personal property are an assessment that does not involve an underlying exchange transaction.

  12. Capital contribution to establish and endowment would be classified as.
    A. Exchange transaction
    B. Exchange-like transaction
    C. Derived tax revenue
    D. Imposed nonexchange revenue
    E. Government-mandated nonexchange transaction
    F. Voluntary nonexchange transaction

     
    F. Voluntary nonexchange transaction. A capital contribution to establish an endowment is a nonexchange transaction that does not qualify as either 1) a derived tax revenue 2) an imposed nonexchange revenue or 3) a government-mandated nonexchange transaction

  13. Fines and forfeits would be classified as.
    A. Exchange transaction
    B. Exchange-like transaction
    C. Derived tax revenue
    D. Imposed nonexchange revenue
    E. Government-mandated nonexchange transaction
    F. Voluntary nonexchange transaction

     
    D. Imposed nonexchange revenue. Fines and forfeitures are an assessment that does not involve an underlying exchange transaction.

  14. Sale of land to a related party would be classified as.
    A. Exchange transaction
    B. Exchange-like transaction
    C. Derived tax revenue
    D. Imposed nonexchange revenue
    E. Government-mandated nonexchange transaction
    F. Voluntary nonexchange transaction

     
    B. Exchange-like transaction. A sale of land to a related party typically would involve the giving and receiving of values that are similar, but not quite equal.

  15. State-mandated bilingual education grant would be classified as.
    A. Exchange transaction
    B. Exchange-like transaction
    C. Derived tax revenue
    D. Imposed nonexchange revenue
    E. Government-mandated nonexchange transaction
    F. Voluntary nonexchange transaction

     
    E. Government mandated nonexchange transaction. A state-mandated bilingual education grant is a funded mandate.

  16. Income tax would be classified as.
    A. Exchange transaction
    B. Exchange-like transaction
    C. Derived tax revenue
    D. Imposed nonexchange revenue
    E. Government-mandated nonexchange transaction
    F. Voluntary nonexchange transaction

     
    C. Derived tax revenue. An income tax is generated by an underlying exchange transaction.

  17. A competitive grant would be classified as.
    A. Exchange transaction
    B. Exchange-like transaction
    C. Derived tax revenue
    D. Imposed nonexchange revenue
    E. Government-mandated nonexchange transaction
    F. Voluntary nonexchange transaction

     
    F. Voluntary nonexchange transaction. A competitive grant is a nonexchange transaction that does not qualify as either 1)a derived tax revenue, 2) an imposed nonexchange revenue or 3) a government-mandated nonexchange transaction

  18. In what way does an exchange-like transaction differ from an exchange transaction?
    A. The values exchanges may not be quite equal
    B. A portion of the values exchanges may benefit a third party.
    C. Either A or B

     
    C. Either A or B. An exchange-like transaction can differ from an exchange transaction either because of the amount exchanged or because of the beneficiary of the exchange.

  19. True or False. There is no difference in accounting and financial reporting between exchange transactions and exchange-like transactions.
    True. As a practical matter, accounting and financial reporting for exchange and exchange-like transactions are identical.

  20. When does a time requirement have to be presumed if not incorporated into a grant contract?
    A. When a government is the provider
    B. When a party other than a government is the provider
    C. Both A and B

    A. When a government is the provider. There is no requirement to presume a time requirement not expressly stated in a grant contract unless the grantor is a government.

  21. When does a purpose requirement affect the recognition of receivables and revenues?
    A. Government-mandated nonexchange transactions
    B. Voluntary nonexchange transactions
    C. Both A and B
    D. None of the above

     
    D. None of the above. A purpose requirement (as opposed to an eligibility requirement) is irrelevant to revenue recognition, although it does affect the classification of fund balance/net position.

  22. If a municipality receives a grant from the state through a county and there is no time requirement incorporated into the agreement, how should the eligibility critereon be interpreted?
    A. Presume a time requirement and use the fiscal year of the state.
    B. Presume a time requirement and use the fiscal year of the county
    C. Either A or B
    D. Do not presume a time requirement

     
    B. Presume a time requirement and use the fiscal year of the county. Whenever the government is the grantor, a time requirement is implicit based on the fiscal year of the immediate provider.

  23. Which of the following would potentially qualify as an extraordinary item?
    A. A tornado
    B. A major sale of land
    C. Both A and B
    D. None of the above.

     
    A. A tornado. Unlike a special item, an extraordinary item must be both unusual in nature and infrequent in occurrence. The sale of land is not inherently unusual in nature.

  24. Which of the following would potentially qualify as a special item?
    A. A hurricane on the Gulf Coast
    B. A major sale of land
    C. Both A and B
    D. None of the above

     
    B. A major sale of land. A special item must be subject to management control.

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