CORRECT ANSWERS - - CORRECT ANSWERS - ALREADY GRTADED A+  150 v...

mac 505 ACTUAL EXAM 150 QUESTIONS AND

CORRECT ANSWERS -

ALREADY GRTADED A+

 150 verified exam questions with correct answers  Latest – , aligned with current MAC 505 requirements  Already graded A+ for accuracy and reliability  Comprehensive coverage of tested topics  Ideal for self-study, review, and exam preparation

Governments and nonprofit entities are similar in many ways. Which of the following statements is not true?

Select one:

• Both governments and nonprofit entities provide services.
• Both governments and nonprofit entities often report restricted resources.
• Both governments and nonprofit entities assess taxes.
• Neither governments nor nonprofit entities have a profit motive. - CORRECT ANSWER-c

Several years ago, a city established a fund to retire general obligation bonds issued for the purpose of constructing a new police station. This year the city made a $50,000 contribution to that fund from its general revenues. The fund also realized $15,000 in revenue from its investments. The bonds due this year were retired. This year's transactions require accounting recognition in which funds?

Select one:

• Debt Service Fund and General Fund
• Capital Projects Fund and Debt Service Fund
• Debt Service Fund and Special Revenue Fund
• General Fund and Capital Projects Fund - CORRECT ANSWER-a
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Which of the following statements is true regarding the accounting measurement implications of the current financial resources measurement focus and modified accrual basis of accounting?

Select one:

• Property tax revenues are recognized in the year the tax is levied regardless of when the taxes are

collected in cash.

• Expenditures and liabilities for compensated absences are recognized when the liabilities come

due for payment as employees resign or retire.

• A fund liability is recorded when cash from the sale of bonds is received.
• Capital assets are recorded as assets when they are acquired. - CORRECT ANSWER-b

Under the modified accrual basis of accounting for a government, property tax revenues should be recognized in the accounting period in which they ____.

Select one:

• are levied and become measurable and available
• are collected in cash
• are levied, subject to a provision for uncollectible receivables
• are levied - CORRECT ANSWER-a

A city-owned electric utility, which serves primarily the city's residents, sends a bill to the city for electricity provided to the police, sanitation and other operating departments. Which pair of funds is needed to record this transaction?

Select one:

• Internal Service Fund and General Fund
• Internal Service Fund and Special Revenue Fund
• Enterprise Fund and Special Revenue Fund
• Enterprise Fund and General Fund - CORRECT ANSWER-d

A city's General Fund transfers resources to the Debt Service Fund. How should the transfer out of the General Fund and into the Debt Service Fund be reported in the governmental funds statement of revenues, expenditures and changes in fund balance?

Select one:

• As adjustments of the beginning of year fund balances of both funds
• As transfers in and out, in the Other financing sources (uses) section of the statement
• As expenditures of the General Fund and revenues of the Debt Service Fund 2 / 3

• They should not be reported because the transfers out and in offset each other - CORRECT

ANSWER-b

Which of the following statements is true regarding accounting for capital assets by state and local governments?

Select one:

• Capital outlays are recorded as assets in Internal Service Funds, but are not depreciated.
• Capital outlays are recorded as assets in Enterprise Funds, but the depreciation on those assets is

recorded in the General Fund.

• Capital outlays are recorded as expenditures in Internal Service Funds.
• Capital outlays are recorded as assets in Enterprise Funds and are depreciated in those funds. -

CORRECT ANSWER-d

A state government collects sales taxes for the state and for all counties within the state that levy a sales tax. In which fund should the state record the liability for sales taxes it holds for the counties, pending remittance of the cash to them?

Select one:

• Custodial Fund
• Internal Service Fund
• Enterprise Fund
• Special Revenue Fund - CORRECT ANSWER-a

Pursuant to a trust agreement, a county invests idle cash owned by school districts within the county until the school districts need the cash. Which fund should the county use to report the activities and balances held for the school districts?

Select one:

• Investment Trust Fund
• Special Revenue Fund
• Internal Service Fund
• Custodial Fund - CORRECT ANSWER-a

Which of the following funds is likely to have the caption "long-term bonds payable" in its fund balance sheet/statement of net position?

Select one:

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