Fundamentals of Advanced Accounting
6th Edition
ISBN: 9780077862237
Author: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 19P
To determine
Identify the correct option out of the given statements.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
An accountant is trying to determine whether the school system of the City of Abraham is fiscally independent. Which of the following is not a requirement for being deemed fiscally independent? Choose the correct.a. Holding property in its own name.b. Issuing bonded debt without outside approval.c. Passing its own budget without outside approval.d. Setting taxes or rates without outside approval.
Which of the following is not a power that a municipality must have to be considered fiscally independent of other governments?
A.) To determine its budget
B.) To levy taxes and set rates
C.) To establish debt limitations
D.) To issue bonds
The accountants for a city government are attempting to determine the appropriate method of reporting a series of unique financial transactions. They have reviewed all of the authoritative sources of GAAP and have not located an answer. What action should they take next?
Chapter 12 Solutions
Fundamentals of Advanced Accounting
Ch. 12 - Prob. 1QCh. 12 - Prob. 2QCh. 12 - Prob. 3QCh. 12 - Prob. 4QCh. 12 - A landfill is scheduled to be filled to capacity...Ch. 12 - Prob. 6QCh. 12 - Prob. 7QCh. 12 - Prob. 8QCh. 12 - Prob. 9QCh. 12 - Prob. 10Q
Ch. 12 - Prob. 11QCh. 12 - Prob. 12QCh. 12 - Prob. 13QCh. 12 - What does a comprehensive annual financial report...Ch. 12 - Prob. 15QCh. 12 - Prob. 16QCh. 12 - What is the difference between a blended component...Ch. 12 - Prob. 18QCh. 12 - Prob. 19QCh. 12 - Prob. 20QCh. 12 - Prob. 21QCh. 12 - How are internal service funds reported on...Ch. 12 - Prob. 23QCh. 12 - A general purpose government takes over a special...Ch. 12 - Prob. 25QCh. 12 - Prob. 26QCh. 12 - Prob. 1PCh. 12 - Prob. 2PCh. 12 - Prob. 3PCh. 12 - Prob. 4PCh. 12 - Prob. 5PCh. 12 - A city creates a solid waste landfill. It assesses...Ch. 12 - Prob. 7PCh. 12 - If this landfill is judged to be a proprietary...Ch. 12 - If this landfill is judged to be a governmental...Ch. 12 - The City of Nomanchester has a defined benefit...Ch. 12 - Prob. 11PCh. 12 - Prob. 12PCh. 12 - Prob. 13PCh. 12 - Prob. 14PCh. 12 - A city builds sidewalks throughout its various...Ch. 12 - Prob. 16PCh. 12 - Prob. 17PCh. 12 - Prob. 18PCh. 12 - Prob. 19PCh. 12 - Prob. 20PCh. 12 - Prob. 21PCh. 12 - Prob. 22PCh. 12 - Prob. 23PCh. 12 - Prob. 24PCh. 12 - Prob. 25PCh. 12 - Prob. 26PCh. 12 - Prob. 27PCh. 12 - Prob. 28PCh. 12 - Prob. 29PCh. 12 - Prob. 30PCh. 12 - Prob. 31PCh. 12 - Prob. 32PCh. 12 - Prob. 33PCh. 12 - Prob. 34PCh. 12 - Prob. 35PCh. 12 - The City of Francois, Texas, has begun the process...Ch. 12 - Prob. 37PCh. 12 - Prob. 38PCh. 12 - Prob. 39PCh. 12 - Prob. 40PCh. 12 - Prob. 41PCh. 12 - 42. For each of the following, indicate whether...Ch. 12 - For problems 40 through 43, use the following...Ch. 12 - Prob. 44PCh. 12 - Prob. 45PCh. 12 - Prob. 46PCh. 12 - On the first day of the year, the City of Wolfe...Ch. 12 - Prob. 48PCh. 12 - A city has a solid waste landfill that was filled...Ch. 12 - Use the same information as in problem 44 except...Ch. 12 - Prob. 51PCh. 12 - Prob. 52PCh. 12 - Prob. 53PCh. 12 - Prob. 2DYSCh. 12 - Read the following journal article: 25 Years of...Ch. 12 - Prob. 4DYSCh. 12 - Prob. 5DYSCh. 12 - The City of Larissa recently opened a solid waste...
Knowledge Booster
Similar questions
- The City of Hampshore is currently preparing financial statements for the past fiscal year. The city manager is concerned because the city encountered some unusual transactions during the current fiscal period and is unsure as to their handling. Required For government accounting, what is the definition of an extraordinary item? For government accounting, what is the definition of a special item? On government-wide financial statements, how should extraordinary items and special items be reported?arrow_forwardIS IT AN ASSET OR A LIABILITY? During the long evolution of government accounting, many scholars have discussed its unique features. In the August 1989 issue of the Journal of Accountancy, R. K. Mautz described the reporting needs of governments and not-for-profit organizations (such as charities) in his essay “Not-For-Profit Financial Reporting: Another View.” To illustrate the governmental accounting challenges, Mautz examined the method by which a city should record a newly constructed high school building. Conventional business wisdom would say that such a property is an asset owned by the government. Thus, the cost should be capitalized and then depreciated over an estimated useful life. However, Mautz pointed to paragraph 26 of FASB Concepts Statement No. 6, which asserted that an essential characteristic of an asset is “a probable future benefit . . . to contribute directly or indirectly to future net cash inflows.” Mautz reasoned that the school building cannot be considered an…arrow_forwardDuring the long evolution of government accounting, many scholars have discussed its unique features. In the August 1989 issue of the Journal of Accountancy, R. K. Mautz described the reporting needs of governments and not-for-profit organizations (such as charities) in “Not-For-Profit Financial Reporting: Another View.”To illustrate the governmental accounting challenges, Mautz examined the method by which a city should record a newly constructed high school building. Conventional business wisdom would say that such a property is an asset owned by the government. Thus, the cost should be capitalized and then depreciated over an estimated useful life. However, in paragraph 26 of FASB Concepts Statement No. 6, an essential characteristic of an asset is “a probable future benefit . . . to contribute directly or indirectly to future net cash inflows.”Mautz reasoned that the school building cannot be considered an asset because it provides no net contribution to cash inflows. In truth, a…arrow_forward
- During the long evolution of government accounting, many scholars have discussed its unique features. In the August 1989 issue of the Journal of Accountancy, R. K. Mautz described the reporting needs of governments and not-for-profit organizations (such as charities) in his essay “Not-For-Profit Financial Reporting: Another View.” To illustrate the governmental accounting challenges, Mautz examined the method by which a city should record a newly constructed high school building. Conventional business wisdom would say that such a property is an asset owned by the government. Thus, the cost should be capitalized and then depreciated over an estimated useful life. However, Mautz pointed to paragraph 26 of FASB Concepts Statement No. 6, which asserted that an essential characteristic of an asset is “a probable future benefit ... to contribute directly or indirectly to future net cash inflows.” Mautz reasoned that the school building cannot be considered an asset because it provides no…arrow_forwardThe City of Francois, Texas, has begun the process of producing its current comprehensive annual financial report (CAFR). Several organizations that operate within the city are related in some way to the primary government. The city’s accountant is attempting to determine how these organizations should be included in the reporting process.a. What is the major criterion for inclusion in a government’s CAFR?b. How does an activity or function qualify as a special purpose government?c. How is the legal separation of a special purpose government evaluated?d. How is the fiscal independence of a special purpose government evaluated?e. What is a component unit, and how is it normally reported on government-wide financial statements?f. How does a primary government prove that it can impose its will on a component unit?g. What is meant by the blending of a component unit?arrow_forwardThe accountants for a city are attempting to determine the proper reporting for a new transaction so that the financial statements are in conformity with generally accepted accounting principles. No authoritative answer can be found. What should happen next? The city will receive a qualified audit report on its financial statements. The accountants can report the transaction in the way that they believe is best. The accountants should study other nonauthoritative sources such as GASB Concepts Statements and the official standards produced by FASB. The city will separate the transaction and report it separately in such a way as to draw attention to the method of reporting that was followed.arrow_forward
- City government officials are analyzing a complicated financial transaction. A GASB Implementation Guide seems to provide one reporting answer and a GASB Concepts Statement seems to provide a different answer. What reporting is most appropriate? Choose the correct.a. The government can use either method and still be in conformity with GAAP.b. Government officials should follow the guidance provided by the GASB Implementation Guide.c. The city’s financial statements must be in conformity with the GASB Concepts Statement.d. The city’s accountants should seek some type of compromise that takes both of these pronouncements into consideration.arrow_forwardFor some types of debt, note disclosure is sufficient. For each of the following items relating to the debt of Marfa City, indicate whether and how the debt would be reported on a balance sheet of one of the city's governmental funds. If it would not be reported on a balance sheet of one of the city's governmental funds, then state whether it would be reported instead on the government‐wide statement of net position or in notes to the financial statements. Insofar as you would need additional information to determine how the debt should be reported, specify such information and tell how it would affect the determination. Briefly justify your response. The city issues $10 million in 30‐year, 6 percent revenue bonds to enable a local nursing home to construct new facilities. The facilities will be leased to the home for the term of the bonds, and the lease payments will be exactly equal to the debt service on the bonds. At the expiration of the lease, the property will revert to the…arrow_forwardCity government officials are analyzing a complicated financial transaction. A GASB Implementation Guide seems to provide one reporting answer and a GASB Concepts Statement seems to provide a different answer. What reporting is most appropriate? The government can use either method and still be in conformity with GAAP. Government officials should follow the guidance provided by the GASB Implementation Guide. The city’s financial statements must be in conformity with the GASB Concepts Statement. The city’s accountants should seek some type of compromise that takes both of these pronouncements into consideration.arrow_forward
- Choose the best answer from the four choices Assuming that a government will collect its sales taxes in sufficient time to satisfy the “available” criterion, it would ordinarily recognize revenue from sales taxes in its governmental fund statements When the underlying sales transaction takes place On the date the merchant must remit the taxes to the government On the date the merchant must file a tax return When the taxes are received by the government Assuming that a government will collect its sales taxes in sufficient time to satisfy the “available” criterion, it would ordinarily recognize revenue from sales taxes in its government‐wide statements When the underlying sales transaction takes place On the date the merchant must remit the taxes to the government On the date the merchant must file a tax return When the taxes are received by the governmentarrow_forwardMost of the revenues obtained by most governments come from: Group of answer choices a Taxes b Sales of goods or services c Borrowing d All of these Which of the following entities must use fund accounting for external financial reporting purposes? Group of answer choices a Businesses b Nonprofit organizations c State and local governments d Federal government e All of these The FASAB establishes financial reporting standards for all governments. Group of answer choices a True b Falsearrow_forward1. A member of the city commission insists that the city’s internal fund prepare and submit a budget for commission approval. The commissioner argues that it is only through the budget that the commissioners will be able to ensure control over the internal service fund. Do you agree or disagree with the commissioner’s argument? Explain your answer. 2. Describe the basic activities conducted by a tax custodial fund. What are some of the issues that make tax custodial accounting complex?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College