Question 1

2 out of 2 points
A government reports the utility services it provides to citizens in a proprietary fund. Which
accounting standards must the proprietary fund apply?
Correct  
Answer:
All FASB and AICPA standards incorporated into GASB Statement No. 62, as
well as any FASB pronouncements issued after November 30, 1989 that have
been specifically adopted by the GASB.
Question 2
2 out of 2 points
Which of the following is not a proprietary fund?
Correct Answer:  
City Hall Capital Projects Fund.
Question 3
2 out of 2 points
When a government enterprise fund has restricted assets on its statement of net position,
which of the following is a true statement?
Correct  
Answer:
The total of the restricted assets less related liabilities will be equal to the
"restricted net assets" amount in the equity section.
Question 4
2 out of 2 points
Which of the following is NOT a budget typically prepared for an activity accounted for in a
proprietary fund?
Correct Answer:  
Appropriation budget.
Question 5
2 out of 2 points
Which of the following is a common example of governments' service concession
arrangements with independent operators?
Correct Answer:  
Operation of a toll road
Question 6
2 out of 2 points
The appropriate basis of accounting for the proprietary funds of a government is
Correct Answer:  
Full accrual.
Question 7
2 out of 2 points
Which of the following is a valid reason for governments to engage in business-type
activities?
Correct  
Answer:
The government can provide the services more cheaply or efficiently than can
a private firm.
Question 8
2 out of 2 points
A proprietary fund of a government has some donor-restricted assets. Which of the following
best describes where and how those assets will generally be displayed in the fund's financial
statements?
Correct Answer:  
In a separate restricted asset category on the statement of net position.
Question 9
2 out of 2 points
In previous years, Boze City had received a $400,000 gift of cash and investments. The donor
had specified that the earnings from the gift must be used to beautify city-owned parks and
the principal must be re-invested. During the current year, the earnings from this gift were
$24,000. The earnings from this gift should generally be considered revenue to which of the
following funds?
Correct Answer:  
Permanent fund.
Question 10
2 out of 2 points
What basis of accounting is used to account for the transactions of a government's permanent
fund?
Correct Answer:  
Modified accrual basis of accounting.
Question 11
0 out of 2 points
Permanent funds are classified as
Correct Answer:  
Governmental funds.

Question 12
2 out of 2 points
Ashby City receives a federal grant to assist in nutrition programs for its senior citizens.
Senior citizens whose income is below a specified amount (the amount was specified by the
Federal government) are eligible to participate in the program. Monthly checks of $100 (this
amount was specified by the Federal government) will be mailed to eligible senior citizens.
The proceeds of this grant should be accounted for in which of the following funds of the
city?
Correct Answer:  
Agency fund.
Question 13
2 out of 2 points
In which of the following funds would a government report depreciation expense?
Correct Answer:  
Private-purpose trust fund.
Question 14
2 out of 2 points
A government receives a gift of cash and investments with a fair value of $200,000. The
donor specified that the earnings from the gift must be used to beautify city-owned parks and
the principal must be re-invested. The $200,000 gift should be accounted for in which of the
following funds?
Correct Answer:  
Permanent fund.
Question 15
2 out of 2 points
Citizens within a defined geographic area of Dolan City created a special assessment district
to facilitate the construction of sidewalks. The city was responsible for overseeing the entire
construction project. The city issued bonds in its own name to pay the contractor for the
construction. However, the city was not responsible in any manner for the bonds. The bonds
were secured by the special assessments that are levied against properties within the special
assessment district. Collections of special assessments would be recorded in which of the
following funds of Dolan City?
Correct Answer:  
Agency fund.