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strategic management questions

Section I

1. The traditional business model of accounting is inadequate for governments and not-for-profit organizations primarily because businesses differ from governments and not-for profits in that:

a. They have different missions.
b. They have fewer assets.
c. Their assets are intangible.
d. Taxes are a major expenditure of business.

3. Which of the following is not an objective of external financial reporting of either the GASB or the FASB?

a. To enable the statement user to detect fraud.
b. To disclose legal or contractual restrictions on the use of resources.
c. To provide information about how the organizations meet their cash requirements.
d. To provide information that would enable a user to assess the service potential of long-lived assets.

4. During the year, Brian County collects $12 million of property taxes on behalf of Urton Township. Of this amount, it remits $10 million to the township, expecting to remit the balance shortly after the end of its fiscal year. The amount of revenue that the County should report is:

a. $0
b. $2 million
c. $8 million
d. $10 million

7. Which of the following best describes government-wide statements?

a. Combined on a full accrual basis.
b. Combined on a modified accrual basis.
c. Consolidated on a full accrual basis.
d. Consolidated on a modified accrual basis.

9. In which of the following statements would depreciation not be reported?

a. Internal service fund statement of revenues, expenses, and changes in fund net assets.
b. Government-wide statement of activities.
c. Capital projects fund statement of revenues, expenditures, and changes in fund balance.
d. Enterprise fund statement of revenues, expenses, and changes in fund net assets.

11. Which of the following would not be reported on a government-wide statement of activities?

a. A transfer of cash from the general fund to a debt service fund.
b. Costs incurred by the recreation department for electricity purchased from the city-owned electric utility.
c. Depreciation on traffic lights.
d. Interest on bonds issued by the electric utility department.

12. In its fund statements, a government should recognize revenue from special assessments:

a. Entirely in the year in which the assessment is imposed.
b. In the years in which the assessments are paid.
c. In the years in which the assessments are due.
d. In the years in which the assessments become available for expenditure.

Section II

Problem #1

Super City maintains the following funds:
? General Fund
? Special Revenue Fund
? Capital Projects Fund
? Debt Service Fund
? Enterprise Fund
? Internal Service Fund
? Permanent Fund
? Agency Fund
For each of the following transactions, indicate the fund in which it would most likely be recorded.
a. Super City collects $3 million of taxes on behalf of the county in which it is located.
b. Super City spends $4 million to pave city streets, using the proceeds of a city gasoline tax dedicated for road and highway improvements.
c. Super City receives a contribution of $5 million. Per the stipulation of the donor, the money is to be invested in marketable securities and the interest from the securities is to be used to maintain a city park.
d. Super City collects $800,000 in landing fees at the city-owned airport.
e. Super City earns $200,000 on investments set aside to make principal payments on the city's outstanding bonds. The bonds were issued to finance improvements to the city's tunnels and bridges.
f. Super City pays $4 million to a contractor for work on one of these bridges.
g. Super City pays $80,000 in wages and salaries to police officers.
h. Super City purchases from an outside supplier $40,000 of stationery that it will "sell" to its various operating departments.
Problem #2
The following information relates to three grants that the town of College Hills received from the state during its fiscal year ending December 31, 2003:
a. A cash grant of $200,000 must be used to repair roads.
b. $150,000 in cash is received out of a total grant of $200,000 intended to reimburse the town for actual expenditures incurred in repairing roads. During the year, the town incurred $150,000 in allowable repair costs.
c. A cash entitlement grant of $200,000 is intended to supplement the town's 2004 budget and must be expended in that year.
1. Prepare journal entries to record the three grants in a governmental fund.
2. What amount of revenue would be reported for each grant in the town's government-wide statement of activities for 2003.

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Section I

1. The traditional business model of accounting is inadequate for governments and not-for-profit organizations primarily because businesses differ from governments and not-for profits in that:

a. They have different missions.
b. They have fewer assets.
c. Their assets are intangible.
d. Taxes are a major expenditure of business.
a. They have different missions.
3. Which of the following is not an objective of external financial reporting of either the GASB or the FASB?

a. To enable the statement user to detect fraud.
b. To disclose legal or contractual restrictions on the use of resources.
c. To provide information about how the organizations meet their cash requirements.
d. To provide information that would enable a user to assess the service potential of long-lived assets.
a. To enable the statement user to detect fraud.
4. During the year, Brian County collects $12 million of property taxes on behalf of Urton Township. Of this amount, it remits $10 million to the township, expecting to remit the balance shortly after the end of its fiscal year. The amount of revenue that the County should report is:

a. $0
b. $2 million
c. $8 million
d. $10 million
a. $0
7. Which of the following best describes government-wide statements?

a. Combined on a full accrual basis.
b. Combined on a modified accrual basis.
c. Consolidated on a full accrual basis.
d. Consolidated on a modified accrual basis.
c. ...

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