CGFO Fin Rpt Ch. 8 Blue Book

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Author:
Peg777
ID:
246488
Filename:
CGFO Fin Rpt Ch. 8 Blue Book
Updated:
2013-11-12 05:29:01
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CGFO CPFO Financial Reporting Blue Book
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CGFO CPFO Financial Reporting Ch. 8 Blue Book
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  1. Which of the following actions would a government take upon levying a property tax that is intended to fund the subsequent fiscal year, assuming that they levy constitutes a legally enforceable claim?
    A. Recognize a receivable
    B. Recognize revenue
    C. Both A and B
    D. None of the above

     
    A. Recognize a receivable. A receivable for property taxes must be recognized as soon as there is an enforceable legal claim, whereas related revenue cannot be recognized prior to the period the taxes are levied to finance.

  2. Which of the following actions should take place if a grant recipient determines that it is probable that certain costs incurred were unallowable and will ultimately be disallowed by the grantor.
    A. The recipient should be recognize a payable
    B. The provider should recognize a receivable
    C. Both A and B
    D. None of the above

     
    C. Both A and B. As a general rule, liabilities must be recognized as soon as the incurrence is considered probable, whereas assets cannot be recognized until they are actually realized. (prohibition of the recognition of gain contingencies). Grantor receivables for disallowed costs are an explicit exception to the general rule.

  3. Which of the following should not be treated as a direct adjustment to net position or fund balance?
    A. Chance in the amount of supplies inventories accounted for using the purchases method.
    B. Misapplication of accounting principle
    C. Failure to take into account circumstances known to management as of the issuance of the financial statements.
    D. A change in estimate

     
    D. A change in estimate. Changes in estimate are always treated prospectively, rather than as a direct adjustment to net position or fund balance.

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