CGFO, CPFO Fin Reporting Ch 13 & 21 Blue Book

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CGFO, CPFO Fin Reporting Ch 13 & 21 Blue Book
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2013-11-12 20:25:41
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CGFO CPFO Financial Reporting
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CGFO, CPFO Financial Reporting
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  1. How would grant resources most likely be reflected in fund balance?
    A. Nonspendable fund balance
    B. Restricted fund balance
    C. Committed fund balance
    D. Assigned fund balance
    E. Unassigned fund balance

     
    B. Restricted fund balance. The use of grant proceeds normally is restricted.

  2. How would resources earmarked by management most likely be reflected in fund balance?
    A. Nonspendable fund balance
    B. Restricted fund balance
    C. Committed fund balance
    D. Assigned fund balance
    E. Unassigned fund balance

     
    D. Assigned fund balance. A self-imposed targeting of resources (earmarking) is an assignment.

  3. How would foreclosure properties most likely be classified in fund balance?
    A. Nonspendable fund balance
    B. Restricted fund balance
    C. Committed fund balance
    D. Assigned fund balance
    E. Unassigned fund balance

     
    A. Nonspendable fund balance. Foreclosure properties are temporarily in Nonspendable form; therefore, they would be classified as Nonspendable fund balance, assuming that there was no limitation on how the proceeds of the eventual sale could be spent.

  4. How would a portion of a revenue stream that a city council formally set aside for park improvements most likely be classified in fund balance?
    A. Nonspendable fund balance
    B. Restricted fund balance
    C. Committed fund balance
    D. Assigned fund balance
    E. Unassigned fund balance

     
    C. Committed fund balance. One of the features that distinguish a commitment from an assignment is the degree of formality required for the former.

  5. Which of the following fund types coupled report negative unassigned fund balance?
    A. General fund
    B. Special Revenue funds
    C. Debt service funds
    D. All of the above

     
    D. All of the above. Since any governmental fund can experience a deficit and deficits are properly reported as unassigned fund balance, any governmental fund can report a negative amount for unassigned fund balance.

  6. Which of the flowing fund types couple report a positive unassigned fund balance?
    A. General fund
    B. Special Revenue funds
    C. Debt service funds
    D. All of the above

     
    A. General fund. By definition, resources accounted for in a fund other than the general fund must at least be intended for the purpose of the fund (=assigned fund balance)

  7. What is the minimum level of detail at which expenditures must be reported in the governmental fund statement of revenues, expenditures, and changes in fund balances?
    A. Function
    B. Program
    C. Activity
    D. Object
    E. Either A or B

    E. Either A or B. At a minimum, expenditures must be presented by either function or program.

  8. How should overall negative investment income in the current year be reported?
    A. Expenditure
    B. Deferred charge
    C. Negative revenue
    D. Contra-equity account

     
    C. Negative revenue. Investments normally are acquired for the purpose of generating revenue and are evaluated in that context by financial statement users. Accordingly, authoritative standards directs that a negative amount of investment income be treated as a revenue item with a debit balance (negative revenue) rather than as an expenditure.

  9. Which of the following is an example of a character classification?
    A. Police
    B. Sanitation
    C. Intergovernmental
    D. All of the above.

     
    C. Intergovernmental. The four classifications for expenditures are 1) current, 2) capital outlay, 3) debt service, 4) Intergovernmental

  10. Which of the following may be reported in a budgetary comparison statement presented as a basic financial statement or RSI?
    A. Major special revenue fund
    B. Nonmajor special revenue fund
    C. Major capital projects fund
    D. Both A and C

     
    A. Major special revenue fund. The budgetary comparison that must be present as either RSI or a basic financial statement may include only the general fund and major special revenue funds.

  11. Which of the following is not required in a budgetary comparison statement presented as a basic financial statement?
    A. Original budget
    B. Final amended budget
    C. Actual (basis of budgeting)
    D. Variance (final amended budget v. actual)

     
    D. Variance. There is no requirement to report budgetary variances even though variance reporting reporting is routine in practice.

  12. Which of the following is required for the governmental fund balance sheet?
    A. Total column
    B. Comparative data
    C. Reconciliation to governmental activities (government-wide statement of net position)
    D. Both A and C

     
    D. Both A and C. The requirement to report comparative data is limited to MD&A.

  13. True or False. Governments that present information on budgetary compliance at the legal level of control, either as other supplementary information within their CAFR or as separate report references in the notes, are not required to present a budgetary comparison as a basic financial statement or RSI.
     
    False. Budgetary comparisons presented at no less than the functional or programmatic level must always be presented as RSI or as a basic financial statement for the general fund and major special revenue funds with legally adopted annual (or biennial) budgets.

  14. Which of the following must be described in the SSAP?
    A. A selection among GAAP alternatives
    B. The application of professional judgment
    C. Specialized practice characteristic of the environment
    D. All of the above
    E. Both A and C

     
    D. All of the above. The SSAP differs from the detailed note disclosures in the it cofuses on 1) the specialized environment of state and local government. 2) the selection among GAAP alternatives, and 3) the application of professional judgment

  15. True or False. A description of the scope of the government-wide financial statements is always required.
     
    False. A description of the scope of the government-wide financial statements is only necessary if a government has either fiduciary funds or fiduciary-type component units (to explain that they are not included)
  16. True or False. The description of the financial reporting entity should provide a generic description of the criteria used to identify component units.
     
    False. The description of the financial reporting entity should mention the specific criteria that justify the incorporation of each component unit.

  17. For which of the following columns may it be necessary to provide a description of the specific activities reported in that column.
    A. Major fund columns
    B. Fund-type columns
    C. Nonmajor fund columns
    D. All of the above
    E. A and B

     
    E. A and B A specific description must be provided for each major fund and for each fund-type column.

  18. Which of the following should be disclosed for property taxes?
    A. Levy date
    B. Due date
    C. Revenues related to prior years but recognized in the current year
    D. All of the above
    E. A and B

     
    E. A and B. There is no requirement to disclose revenues related to prior years that were recognized only in the current year (because of the application of the modified accrual basis of accounting).

  19. True or False. A disclosure regarding the allocation of indirect expense is required only if a separate column is used to allocate indirect expense among functions or programs.
     
    False. When governments charge their various departments for centralized services they often build in a component designed to recover administrative costs (indirect expense). If so, they are not required to remove that amount in the process of consolidation; however, the SSAP would need to mention that fact.

  20. Which of the following is a required disclosure for governmental funds?
    A. Flow assumption within the restricted components of fund balance
    B. Flow assumption within the unrestricted components of fund balance
    C. Both A and B
    D. None of the above

     
    C. Both A and B. If both restricted and unrestricted resources can be used for the same purpose, a flow assumption must be disclosed for 1) the use of restricted v unrestricted resources and 2) the use of the various components of unrestricted resources (committed, assigned, unassigned)

  21. Which of the following would need to be part of the SSAP?
    A. Method used to calculate depreciation expense
    B. Flow assumption used for inventory
    C. Method used to account for supplies inventories in governmental funds
    D. All of the above
    E. None of the above

    D. All of the above. The SSAP always needs to disclose the selection among acceptable GAAP alternatives.
    D. All of the above. The SSAP always needs to disclose the selection among acceptable GAAP alternatives.

  22. True or False. Authoritative accounting standards do not prescribe the specific contents of the disclosure required when a network or subsystem of infrastructure is accounted for using the modified approach.
     
    True. Authoritative standards require a description of the modified approach (if used), but do not specify its contents.
  23. If a single presentation cannot demonstrate compliance with both finance-related legal & contractual provisions & GAAP, how should the situation be handled?

    A.  GAAP should take priority over demonstrating compliance.


    B.  Demonstrating compliance should take priority over GAAP.

    C.  GAAP financial reporting should be supplemented to demonstrate legal compliance as well.

    D.  Legal compliance should take precedence, with appropriate note disclosure of the necessary departure of GAAP.
    C.  GAAP financial reporting should be supplemented to demonstrate legal compliance as well.

    Additional schedules should be provided as needed to demonstrate legal compliance.  In no case do legal requirements justify supplanting GAAP.
  24. What term is used to describe the minimum information that must be included with a financial report for an independent auditor to assert that the government has complied with GAAP?

    A.  General-purpose fin stmts

    B.  Condensed fin stmts

    C.  Basic Fin stmts

    D.  Consolidated fin stmts.
    C.  Basic Fin stmts
  25. Which of the following NOT a form of required supplementary information (RSI)?
    A.  MDA

    B.  Trend data on infrastructure condition

    C.  Letter of transmittal

    D.  Claims development data for a public-entity risk pool
    C.  Letter of transmittal

    2005 GAAFR pages 149-150
  26. T/F The contents, format & timing of special-purpose financial reporting typically are set by management.
    False - The contents, format & timing of special-purpose financial reports depends on the outside party that impose the requirement
  27. T/F The statistical section is especially important for evaluating economic condition.
    True - Stat section provides trend data & non financial data useful in interpreting the basic fin stmts & is especially important for evaluating economic condition.
  28. Which formatting approach is PREFERRED for the government-wide statement of position?

    A.  Balance sheet

    B.  Statement of net assets

    C.  Statement of financial position

    D.  A or B, depending upon the formatting approach taken.
    B.  Statement of net assets

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