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Proprietary fund, Statement of net assets, statement of activity

1) Which of the following choices regarding the proprietary fund financial statements is TRUE?

A. Normally, reconciliation is required between the proprietary fund financial statements and the business-type activities column in the government-wide financial statements
B. The Statement of Net Assets (or Balance Sheet) reflects equity as contributed equity and retained earnings
C. Statements include the Statement of Net Assets (or Balance Sheet), Statement of Revenues, Expenses and Changes in Fund Net Assets and Statement of Cash Flows
D. The Statement of Cash Flows may be prepared using either the direct or the indirect methods

2) Which of the following choices regarding the government-wide Statement of Net Assets is TRUE?

A. The government-wide Statement of Net Assets must be prepared in a classified format; that is, both assets and liabilities must be separated between current and long-term categories
B. The government-wide Statement of Net Assets reflects capital assets, net of accumulated depreciation, for both governmental and business-type activities
C. The government-wide Statement of Net Assets includes all resources entrusted to the government; including governmental, proprietary and fiduciary
D. A reporting entity (primary government plus component units) total column is required

3) Which of the following choices regarding the government-wide Statement of Activities is TRUE?

A. The government-wide Statement of Activities is prepared using the modified accrual basis of accounting for governmental activities and using the accrual basis of accounting for business-type activities
B. The government-wide Statement of Activities may reflect expenses either by function (general government, public safety, and so forth)-or by object or natural classification-(salaries, supplies, and so forth).
C. The government-wide Statement of Activities reflects all taxes as general revenues

4) Short-term loans which are backed by the taxing power of the governmental unit and used to meet working capital requirements are called:

A. other financing sources
B. inter-fund loans
C. tax anticipation notes
D. appropriation loan

5) A local government was awarded a federal grant in the amount of $600,000 to provide for a summer employment program for young people. The grant was a reimbursement grant and was awarded on April 30, 2009. The local government expended the resources as follows: June, 2009, $220,000; July 2009, $200,000; August, 2009, $180,000. The federal government provided the funds the following months. The local government would recognize revenues for the fiscal year ended June 30, 2009 in which amount?

A. $420,000
B. $220,000
C. $ - 0 -
D. $600,000

6) All of the following is likely to be recorded in a special revenue fund EXCEPT:

A. sales taxes restricted to courthouse additions
B. hotel taxes restricted to promoting tourism
C. phone fees restricted to supporting the emergency 911 access system
D. state motor fuel tax restricted to road maintenance

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The following posting discusses proprietary funds, statements of net assets and statements of activity.

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