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Asset and General Fund

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Alabama State University
College of Business Administration
ACT 532 Advanced Fund Accounting
Exam III
November 20, 2012

1) Governments must report nonspendable fund balance in a governmental fund 's balance sheet for
A) Inventory.
B) Prepaid assets.
C) Land.
D) All of the above.
E) Items A and B only.
Answer:

2) The following benefits are examples of other postemployment benefits (OPEB) except for
A) Health care insurance.
B) Pension benefits.
C) Vision insurance.
D) Life insurance.
E) All of the above are common examples of OPEB.
Answer:

3) Assume that the Village of Hannah uses the purchases method of inventory accounting. At the end of the year the inventory levels have increased. What entry would be made to …show more content…

D) The General Fund would record an expenditure for only the interest portion of the debt service payment.
E) Both items A and D are false.
F) Both items B and C are false.
Answer:

12) Government A makes pension contributions on behalf of its employees to both a defined benefit plan and a defined contribution plan. Assume that the employer contributions for the fiscal year totaled $55,000 for the defined benefit plan and $35,000 for the defined contribution plan. The General Fund will report
A) Total expenditures of $90,000.
B) Expenditures of $55,000 and transfers out of $35,000.
C) Transfers out of $90,000.
D) Transfers out of $55,000 and expenditures of $35,000.
E) None of the above.
Answer:
13) Assume that a government purchases $85,000 of inventory for the General Fund during the year. The General Fund began the year with an inventory balance of $15,000 and ended the year with a balance of $35,000. The General Fund uses the consumption method of inventory accounting and a perpetual inventory system. The General Fund should report
A) No expenditures for the year as the General Fund uses a perpetual inventory system.
B) Expenditures of $85,000 for the year.
C) Expenditures of $65,000 for the year.
D) Transfers out of $85,000 for the year.
E) Transfers out of $65,000 for the year.
Answer:

14) If a government uses a perpetual inventory system for its General Fund and there is an inventory overage at the end of the year, the inventory

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