please explain why the option is correct and remainings are incorrect To recognize revenue in a governmental fund, which of the following must occur?Selectone:a. The revenues must both be earned and collectible within two years.b. The revenues must be collectible within the current period or soon enough thereafter to be usedto pay liabilities of the current period.c. The revenues must only be earned.d. The revenues are collected in cash.

The major source of revenue for the government is taxes, fines, penalties etc. Accrual basis of…

Answered: please explain why the option is…

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter9: Payroll, Estimated Payments, And Retirement Plans

Section: Chapter Questions

Problem 15MCQ

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The general fund pays rent for two months. Which of the following is not correct? Choose the correct.a. Rent expense should be reported in the government-wide financial statements.b. Rent expense should be reported in the general fund.c. An expenditure should be reported in the fund financial statements.d. If one month of rent is in the first year with the other month in the next year, either the purchases method or the consumption method can be used in fund statements.
In a governmental fund, which one of the following constitutes revenue?a. Cash received from another fund of the same unitb. Bond proceedsc. Property taxesd. Refund on an invoice for fuel
Revenues that are legally restricted to expenditures for specified purposes should be accounted for in special revenue funds, includinga. accumulation of resources for payment of general long-term debt principal and interest.b. pension trust fund revenues.c. gasoline taxes to finance road repairs.d. proprietary fund revenues.
What is the purpose of a special revenue fund? Choose the correct.a. To account for revenues legally or externally restricted as an operating expenditure.b. To account for ongoing activities.c. To account for gifts when only subsequently earned income can be expended.d. To account for the cost of long-lived assets bought with designated funds.
4. The Village of Seaside Pines prepared the following enterprise fund Trial Balance as of December 31, 2020, the last day of its fiscal year. The enterprise fund was established this year through a transfer from the General Fund. Accounts payable Accounts receivable Accrued interest payable Accumulated depreciation Administrative and selling expenses Allowance for uncollectible accounts Capital assets Cash Charges for sales and services Cost of sales and services Depreciation expense Due from General Fund Interest expense Interest revenue Transfer in from General Fund Bank note payable Supplies inventory Totals Debits $32,000 47,000 712,000 89,000 479,000 45,000 17,000 40,000 18,000 $1,479,000 Credits $ 96,000 28,000 45,000 12,000 550,000 4,000 119,000 625,000 $1,479,000 Required: a. Prepare the closing entries for December 31. b. Prepare the Statement of Revenues, Expenses, and Changes in Fund Net Position for the year ended December 31. c. Prepare the Net Position section of the…
3. Which of the following accounts appears on both the interim and year-end balance sheets of the General Fund? a) Revenues. b) Reserve for encumbrances. c) Encumbrances. d) Appropriations. 4. Which of the following would be considered a general capital asset? a) A vehicle purchased from general fund revenues. b) A vehicle purchased and maintained by an enterprise fund. c) A computer purchased from revenues of an internal service fund and used by the supplies department. d) Real estate purchased with the assets of a pension trust fund. 5. A machine is sold for $500. It had originally been purchased for $8,000 using GF It is fully depreciated. Gain on sale of equipment account revenues. should be recorded in the General fund journal as: a) Debit in 500S. b) Credit in 500$. c) Credit in 7500S. d) Gain on sale of equipment account will not recorded in general fund journal. Question Three: mini cases
Encumbrances outstanding at year-end in a state’s general fund should be reported as a a. liability in the general fund. b. fund balance reserve in the general fund. c. liability in the general long-term debt account group. d. fund balance designation in the general fund.
For each of the following accounts indicate in which fund type it could be found. Select your answer from the following responses: A. Governmental funds only. B. Proprietary funds only. Bond Proceeds Long Term liability for Compensated Absences Deferred Inflows/Outflows of Resources Taxes Receivable Estimated Revenues Operating Revenues
The general fund pays rent for two months. Which of the following is not correct? Rent expense should be reported in the government-wide financial statements. Rent expense should be reported in the general fund. An expenditure should be reported in the fund financial statements. If one month of rent is in the first year with the other month in the next year, either the purchases method or the consumption method can be used in fund statements.
Vouchers payable denote: a. A future liability estimated when order is made b. Amount due to government from user charges c. A liability incurred when goods/services are received d. Amount payable by government on long term debts Question 2 Question text Which of the following is not an example of the function of an Agency Fund? a. Collection of property tax by one government unit for the other b. All the options listed c. Payment of interest and principle on long-term debt d. Collection of local government sales taxes by the state government
Governmental funds report current financial resources. However, governmental funds alsoreport some current assets which are not financial resources. Which of the assets below is acurrent financial resource at December 31, 2022? A. Property taxes receivable expected to be collected between March 2 and December 31, 2023. B.Office supplies that will be used in 2023. C.A and B. D.Neither A nor B.
After closing entries, a special revenue fund's Fund Balance account represents the net amount of resources available for future appropriation. O true false

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