Encumbrance Accounting - CPA Financial Accounting and Reporting (FAR)
Card 1 of 24
During the current year, a city spends $5 million to construct a new highway. The highway will be a toll road that can only be used by paying a fee. What is the difference between the fund-based financial statements and the government-wide financial statements in regards to the reporting of this $5 million outflow?
During the current year, a city spends $5 million to construct a new highway. The highway will be a toll road that can only be used by paying a fee. What is the difference between the fund-based financial statements and the government-wide financial statements in regards to the reporting of this $5 million outflow?
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Because users of the road must pay a fee, the road is accounted for as an enterprise fund. Enterprise funds are accounted for the same way (that is, using standard accrual accounting) in both the fund statements and the government-wide statements.
Because users of the road must pay a fee, the road is accounted for as an enterprise fund. Enterprise funds are accounted for the same way (that is, using standard accrual accounting) in both the fund statements and the government-wide statements.
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Harrison County is currently preparing its government-wide financial statements. The Harrison Public Airport is legally separate from the county but is viewed as a component unit because the county appoints a majority of the commission and has guaranteed certain debts held by the airport. In Harrison County's government-wide financial statements, how is the information for the airport reported?
Harrison County is currently preparing its government-wide financial statements. The Harrison Public Airport is legally separate from the county but is viewed as a component unit because the county appoints a majority of the commission and has guaranteed certain debts held by the airport. In Harrison County's government-wide financial statements, how is the information for the airport reported?
Tap to reveal answer
Component units must be included in the government-wide statements, but if that component is very intertwined with the government as a whole, the government can choose to present that unit separately or blended with the rest of the government.
Component units must be included in the government-wide statements, but if that component is very intertwined with the government as a whole, the government can choose to present that unit separately or blended with the rest of the government.
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The town of Harmony has a large public hospital. On its government-wide financial statements, within the statement of activities, the town has reported a net financial burden of $2 million in the past year. How is this amount determined?
The town of Harmony has a large public hospital. On its government-wide financial statements, within the statement of activities, the town has reported a net financial burden of $2 million in the past year. How is this amount determined?
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The net financial burden represents the portion of the hospital's expenses that are not covered by program revenues, directly generated by the hospital. These expenses would need to be covered by some type of general revenue and thus represent a burden to the government.
The net financial burden represents the portion of the hospital's expenses that are not covered by program revenues, directly generated by the hospital. These expenses would need to be covered by some type of general revenue and thus represent a burden to the government.
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Fixed assets donated to a governmental unit should be recorded:
Fixed assets donated to a governmental unit should be recorded:
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Donated capital assets to a governmental unit are recorded as if they had been purchased that is at estimated fair value when received.
Donated capital assets to a governmental unit are recorded as if they had been purchased that is at estimated fair value when received.
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ABC City uses an internal service fund for its central motor pool. The assets and liabilities account balances for this fund that are not eliminated normally should be reported in the government wide statement of net position as:
ABC City uses an internal service fund for its central motor pool. The assets and liabilities account balances for this fund that are not eliminated normally should be reported in the government wide statement of net position as:
Tap to reveal answer
For the purposes of government wide financial statements, internal service funds are normally reported in the governmental activities column of the government wide statement of net position and statement of activities since they are generally established to service the governmental funds.
For the purposes of government wide financial statements, internal service funds are normally reported in the governmental activities column of the government wide statement of net position and statement of activities since they are generally established to service the governmental funds.
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The word most closely associate with "encumbrance" would be:
The word most closely associate with "encumbrance" would be:
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The concept of encumbering is essentially committing funds for use. Committed and encumbered may be used interchangeably.
The concept of encumbering is essentially committing funds for use. Committed and encumbered may be used interchangeably.
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During the current year, a city spends $5 million to construct a new highway. The highway will be a toll road that can only be used by paying a fee. What is the difference between the fund-based financial statements and the government-wide financial statements in regards to the reporting of this $5 million outflow?
During the current year, a city spends $5 million to construct a new highway. The highway will be a toll road that can only be used by paying a fee. What is the difference between the fund-based financial statements and the government-wide financial statements in regards to the reporting of this $5 million outflow?
Tap to reveal answer
Because users of the road must pay a fee, the road is accounted for as an enterprise fund. Enterprise funds are accounted for the same way (that is, using standard accrual accounting) in both the fund statements and the government-wide statements.
Because users of the road must pay a fee, the road is accounted for as an enterprise fund. Enterprise funds are accounted for the same way (that is, using standard accrual accounting) in both the fund statements and the government-wide statements.
← Didn't Know|Knew It →
Harrison County is currently preparing its government-wide financial statements. The Harrison Public Airport is legally separate from the county but is viewed as a component unit because the county appoints a majority of the commission and has guaranteed certain debts held by the airport. In Harrison County's government-wide financial statements, how is the information for the airport reported?
Harrison County is currently preparing its government-wide financial statements. The Harrison Public Airport is legally separate from the county but is viewed as a component unit because the county appoints a majority of the commission and has guaranteed certain debts held by the airport. In Harrison County's government-wide financial statements, how is the information for the airport reported?
Tap to reveal answer
Component units must be included in the government-wide statements, but if that component is very intertwined with the government as a whole, the government can choose to present that unit separately or blended with the rest of the government.
Component units must be included in the government-wide statements, but if that component is very intertwined with the government as a whole, the government can choose to present that unit separately or blended with the rest of the government.
← Didn't Know|Knew It →
The town of Harmony has a large public hospital. On its government-wide financial statements, within the statement of activities, the town has reported a net financial burden of $2 million in the past year. How is this amount determined?
The town of Harmony has a large public hospital. On its government-wide financial statements, within the statement of activities, the town has reported a net financial burden of $2 million in the past year. How is this amount determined?
Tap to reveal answer
The net financial burden represents the portion of the hospital's expenses that are not covered by program revenues, directly generated by the hospital. These expenses would need to be covered by some type of general revenue and thus represent a burden to the government.
The net financial burden represents the portion of the hospital's expenses that are not covered by program revenues, directly generated by the hospital. These expenses would need to be covered by some type of general revenue and thus represent a burden to the government.
← Didn't Know|Knew It →
Fixed assets donated to a governmental unit should be recorded:
Fixed assets donated to a governmental unit should be recorded:
Tap to reveal answer
Donated capital assets to a governmental unit are recorded as if they had been purchased that is at estimated fair value when received.
Donated capital assets to a governmental unit are recorded as if they had been purchased that is at estimated fair value when received.
← Didn't Know|Knew It →
ABC City uses an internal service fund for its central motor pool. The assets and liabilities account balances for this fund that are not eliminated normally should be reported in the government wide statement of net position as:
ABC City uses an internal service fund for its central motor pool. The assets and liabilities account balances for this fund that are not eliminated normally should be reported in the government wide statement of net position as:
Tap to reveal answer
For the purposes of government wide financial statements, internal service funds are normally reported in the governmental activities column of the government wide statement of net position and statement of activities since they are generally established to service the governmental funds.
For the purposes of government wide financial statements, internal service funds are normally reported in the governmental activities column of the government wide statement of net position and statement of activities since they are generally established to service the governmental funds.
← Didn't Know|Knew It →
The word most closely associate with "encumbrance" would be:
The word most closely associate with "encumbrance" would be:
Tap to reveal answer
The concept of encumbering is essentially committing funds for use. Committed and encumbered may be used interchangeably.
The concept of encumbering is essentially committing funds for use. Committed and encumbered may be used interchangeably.
← Didn't Know|Knew It →
During the current year, a city spends $5 million to construct a new highway. The highway will be a toll road that can only be used by paying a fee. What is the difference between the fund-based financial statements and the government-wide financial statements in regards to the reporting of this $5 million outflow?
During the current year, a city spends $5 million to construct a new highway. The highway will be a toll road that can only be used by paying a fee. What is the difference between the fund-based financial statements and the government-wide financial statements in regards to the reporting of this $5 million outflow?
Tap to reveal answer
Because users of the road must pay a fee, the road is accounted for as an enterprise fund. Enterprise funds are accounted for the same way (that is, using standard accrual accounting) in both the fund statements and the government-wide statements.
Because users of the road must pay a fee, the road is accounted for as an enterprise fund. Enterprise funds are accounted for the same way (that is, using standard accrual accounting) in both the fund statements and the government-wide statements.
← Didn't Know|Knew It →
Harrison County is currently preparing its government-wide financial statements. The Harrison Public Airport is legally separate from the county but is viewed as a component unit because the county appoints a majority of the commission and has guaranteed certain debts held by the airport. In Harrison County's government-wide financial statements, how is the information for the airport reported?
Harrison County is currently preparing its government-wide financial statements. The Harrison Public Airport is legally separate from the county but is viewed as a component unit because the county appoints a majority of the commission and has guaranteed certain debts held by the airport. In Harrison County's government-wide financial statements, how is the information for the airport reported?
Tap to reveal answer
Component units must be included in the government-wide statements, but if that component is very intertwined with the government as a whole, the government can choose to present that unit separately or blended with the rest of the government.
Component units must be included in the government-wide statements, but if that component is very intertwined with the government as a whole, the government can choose to present that unit separately or blended with the rest of the government.
← Didn't Know|Knew It →
The town of Harmony has a large public hospital. On its government-wide financial statements, within the statement of activities, the town has reported a net financial burden of $2 million in the past year. How is this amount determined?
The town of Harmony has a large public hospital. On its government-wide financial statements, within the statement of activities, the town has reported a net financial burden of $2 million in the past year. How is this amount determined?
Tap to reveal answer
The net financial burden represents the portion of the hospital's expenses that are not covered by program revenues, directly generated by the hospital. These expenses would need to be covered by some type of general revenue and thus represent a burden to the government.
The net financial burden represents the portion of the hospital's expenses that are not covered by program revenues, directly generated by the hospital. These expenses would need to be covered by some type of general revenue and thus represent a burden to the government.
← Didn't Know|Knew It →
Fixed assets donated to a governmental unit should be recorded:
Fixed assets donated to a governmental unit should be recorded:
Tap to reveal answer
Donated capital assets to a governmental unit are recorded as if they had been purchased that is at estimated fair value when received.
Donated capital assets to a governmental unit are recorded as if they had been purchased that is at estimated fair value when received.
← Didn't Know|Knew It →
ABC City uses an internal service fund for its central motor pool. The assets and liabilities account balances for this fund that are not eliminated normally should be reported in the government wide statement of net position as:
ABC City uses an internal service fund for its central motor pool. The assets and liabilities account balances for this fund that are not eliminated normally should be reported in the government wide statement of net position as:
Tap to reveal answer
For the purposes of government wide financial statements, internal service funds are normally reported in the governmental activities column of the government wide statement of net position and statement of activities since they are generally established to service the governmental funds.
For the purposes of government wide financial statements, internal service funds are normally reported in the governmental activities column of the government wide statement of net position and statement of activities since they are generally established to service the governmental funds.
← Didn't Know|Knew It →
The word most closely associate with "encumbrance" would be:
The word most closely associate with "encumbrance" would be:
Tap to reveal answer
The concept of encumbering is essentially committing funds for use. Committed and encumbered may be used interchangeably.
The concept of encumbering is essentially committing funds for use. Committed and encumbered may be used interchangeably.
← Didn't Know|Knew It →
During the current year, a city spends $5 million to construct a new highway. The highway will be a toll road that can only be used by paying a fee. What is the difference between the fund-based financial statements and the government-wide financial statements in regards to the reporting of this $5 million outflow?
During the current year, a city spends $5 million to construct a new highway. The highway will be a toll road that can only be used by paying a fee. What is the difference between the fund-based financial statements and the government-wide financial statements in regards to the reporting of this $5 million outflow?
Tap to reveal answer
Because users of the road must pay a fee, the road is accounted for as an enterprise fund. Enterprise funds are accounted for the same way (that is, using standard accrual accounting) in both the fund statements and the government-wide statements.
Because users of the road must pay a fee, the road is accounted for as an enterprise fund. Enterprise funds are accounted for the same way (that is, using standard accrual accounting) in both the fund statements and the government-wide statements.
← Didn't Know|Knew It →
Harrison County is currently preparing its government-wide financial statements. The Harrison Public Airport is legally separate from the county but is viewed as a component unit because the county appoints a majority of the commission and has guaranteed certain debts held by the airport. In Harrison County's government-wide financial statements, how is the information for the airport reported?
Harrison County is currently preparing its government-wide financial statements. The Harrison Public Airport is legally separate from the county but is viewed as a component unit because the county appoints a majority of the commission and has guaranteed certain debts held by the airport. In Harrison County's government-wide financial statements, how is the information for the airport reported?
Tap to reveal answer
Component units must be included in the government-wide statements, but if that component is very intertwined with the government as a whole, the government can choose to present that unit separately or blended with the rest of the government.
Component units must be included in the government-wide statements, but if that component is very intertwined with the government as a whole, the government can choose to present that unit separately or blended with the rest of the government.
← Didn't Know|Knew It →