22. Government A allows discounts on taxes. Specifically, taxpayers get a 1% discount on the total tax if it is paid within one month of the initial levy. What would the journal entry be to record the levy of $700,000 if the government anticipates there will be a 2% uncollectible rate and it is anticipated that the discounts will be $5,000?
dr cr
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Taxes Receivable $700,000
Allowance for Uncollectible Taxes $ 14,000
Allowance for Discounts 5,000
Revenues 681,000
Taxes Receivable $700,000
Revenues $700,000
Taxes Receivable $695,000
Expenditures 5,000 Allowance for Uncollectible Taxes $ 14,000
Revenues 686,000
Taxes Receivable $681,000
Revenues $681,000
Taxes Receivable $700,000
Allowance for Uncollectible Taxes $ 14,000
Revenues 686,000
23. If a city receives notification of a grant award and the actual proceeds sixty days prior to the start of the grant period, the entry to record the grant in the Special Revenue Fund would be
a debit to grants receivable and a credit to grants revenue.
a debit to cash and a credit to grants revenue.
a debit to grants receivable and a credit to deferred revenue.
a debit to cash and a credit to deferred revenue.
None of the above.
24. The county received a $1,500,000 restricted grant from the state government to be used to improve its public safety department’s communication systems. The county will not meet all eligibility requirements of the grant until next fiscal year, when the county plans to begin incurring expenditures for this purpose. In the current year, the General Fund should report this grant as
a. other financing sources.
b. deferred revenues.
c. revenues.
d. None of the above
25. If an expenditure was inadvertently charged to the General Fund instead of the appropriate Special Revenue Fund, what effect would the correction of this error later in the same fiscal year have on the General Fund?
An entry would be made directly to the General Fund’s fund balance to correct the error.
Revenues would be increased.
Expenditures would be decreased.
Transfers in would be increased.
None of the above.
26. If an expenditure was inadvertently charged to the General Fund instead of the appropriate Special Revenue Fund, what effect would the correction of this error later in the same fiscal year have on the General Fund?
An entry would be made directly to the General Fund’s fund balance to correct the error.
Revenues would be increased.
Expenditures would be decreased.
Transfers in would be increased.
None of the above.
27. A court judgment was rendered against a county in which they were ordered to pay $500,000 in equal installments over a five-year period to the plaintiff. The county’s General Fund will
report a fund liability of $500,000 in Year 1.
report expenditures of $500,000 in Year 1.
report expenditures of $100,000 in Year 1.
report expenditures of $100,000 in Year 1 and a fund liability of $400,000.
report an other financing use of $100,000 in Year 1.
28. A General Fund transfers funds to a Debt Service Fund in late December. The Debt Service Fund will make the required debt service payment in early January. For the month of December, fund balance will
decrease for the General Fund and increase for the Debt Service Fund.
decrease for the General Fund and remain the same for the Debt Service Fund.
decrease for both the General Fund and the Debt Service Fund.
Either item a or b, depending on the government’s debt service expenditure accounting policy.
None of the above.
29. A government entered into a general government capital lease for equipment during the year. The capitalizable cost of the equipment was $400,000. A down payment of $40,000 was made. The General Fund should report in its statement of revenues, expenditures, and changes in fund balance an
a. other financing use of $400,000.
b. expenditure of $360,000.
c. other financing source of $400,000.
d. other financing source of $360,000.
30. A county uses the consumption method to account for General Fund materials and supplies. The beginning inventory of materials and supplies was $122,000. The ending inventory was $150,000. The beginning balance of reserve for encumbrances (for supplies ordered but not received at the beginning of the year) was $50,000; the ending balance was $20,000. Supplies purchased during the year totaled $750,000. The county General Fund should report expenditures for materials and supplies for the year of
a. $722,000
b. $750,000
c. $752,000
d. $780,000
31. Government A secured a $400,000 short-term loan from a local bank for interim financing for a governmental capital project. What would the journal entry be in the Capital Projects Fund to account for this transaction?
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Cash $400,000
Other Financing Sources $400,000
Cash $400,000
Notes Payable $400,000
Construction in Progress $400,000
Other Financing Sources $400,000
Cash $400,000
Revenues $400,000
No entry is required in the Capital Projects Fund as this is a financing agreement.
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