Accounting For Governmental & Nonprofit Entities
18th Edition
ISBN: 9781259917059
Author: RECK, Jacqueline L., Lowensohn, Suzanne L., NEELY, Daniel G.
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 2, Problem 11C
Accounting and Reporting Principles. (LO2-3) The financial statements of the Town of Fordville consist of a statement of cash receipts and a statement of cash disbursements prepared by the town treasurer for each of its three funds: the General Fund, the Road Tax Fund (special revenue fund), and the Sewer Fund (enterprise fund). As required by state law, the town submits its financial statements to the Office of the State Auditor; however, due to its small size, its financial statements have never had to be audited by an independent auditor.
Because of its growing population (nearing 20,000) and increasing financial complexity, the town has hired Emily Ramirez, who recently obtained her CPA license, to supervise all accounting and financial reporting operations. Having worked two years for a CPA firm in a nearby town, Ms. Ramirez gained limited experience auditing not-for-profit organizations, as well as compiling financial statements for small businesses. Although she has little knowledge of governmental accounting, she is confident that her foundation in business and not-for-profit accounting will enable her to handle the job.
Using her experience with not-for-profit organizations, for the year ended December 31, 2020, Ms. Ramirez prepared the following unaudited financial statements for the Town of Fordville. Assuming the city wants to prepare financial statements in accordance with GASB standards, study the financial statements and answer the questions that follow.
Required
- a. What basis of accounting does it appear Ms. Ramirez has used? Explain how you arrived at your answer.
- b. Given what you know about the town’s activities, what financial statements would the town be required to prepare using GASB standards?
- c. The financial statements presented appear to be most comparable to which two financial statements prepared using GASB standards? Using the information from the Financial Reporting Model section of the text and Illustrations A2-1 and A2-2, explain what modifications would be needed to make the two financial statements conform to the format of the financial statements you have identified.
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The following information is available for the preparation of the government-wide financial statements for the City of Southern Springs
as of April 30, 2024:
Cash and cash equivalents, governmental activities
Cash and cash equivalents, business-type activities
Receivables, governmental activities
Receivables, business-type activities
Inventories, business-type activities
Capital assets, net, governmental activities
Capital assets, net, business-type activities
Accounts payable, governmental activities
Accounts payable, business-type activities
General obligation bonds, governmental activities
Revenue bonds, business-type activities
Long-term liability for compensated absences, governmental activities
Required:
$ 610,000
1,283,000
726,000
2,138,000
842,000
21,852,000
11,493,000
1,044,000
904,000
6,140,000
5,188,000
586,000
From the preceding information, prepare a Statement of Net Position for the City of Southern Springs as of April 30, 2024. Assume that
outstanding bonds were…
Control account is a summary account whose balance is equal to the total of the individual balances of its subsidiary accounts.
a.
True
b.
False
In approving the budget of the City of Troy, the city council appropriated an amount less than expected revenues, what will be the result of this action
a.
An increase in outstanding encumbrances by the of the fiscal year
b.
A necessity for compensatory offsetting action in the debt service fund
c.
A debit to budgetary fund balance
d.
A credit to budgetary fund balance
Which of the following should not be included in the introductory section of a city's CAFR?
A.) Management discussion and analysis
B.) Letter of transmittal
C.) Government Finance Officer's certificate of achievement for excellence in financial reporting
D.) Photos of city officials
Chapter 2 Solutions
Accounting For Governmental & Nonprofit Entities
Ch. 2 - Prob. 1QCh. 2 - Prob. 2QCh. 2 - Prob. 3QCh. 2 - Explain the modified accrual basis of accounting....Ch. 2 - Prob. 5QCh. 2 - What is the primary reason government entities use...Ch. 2 - What is meant by the terms deferred outflows of...Ch. 2 - How do expenses and expenditures differ?Ch. 2 - Prob. 9QCh. 2 - Prob. 10Q
Ch. 2 - Accounting and Reporting Principles. (LO2-3) The...Ch. 2 - Prob. 12CCh. 2 - Which of the following statements is true...Ch. 2 - Prob. 16.2EPCh. 2 - Prob. 16.3EPCh. 2 - The measurement focus and basis of accounting that...Ch. 2 - Which of the following amounts that are identified...Ch. 2 - Prob. 16.6EPCh. 2 - Prob. 16.7EPCh. 2 - Under the modified accrual basis of accounting a....Ch. 2 - Prob. 16.9EPCh. 2 - A certain city reports the following year-end...Ch. 2 - Prob. 16.11EPCh. 2 - Prob. 16.12EPCh. 2 - Prob. 16.13EPCh. 2 - Prob. 16.14EPCh. 2 - Which of the following fund(s) will generally be...Ch. 2 - Prob. 17EPCh. 2 - Prob. 18EPCh. 2 - Matching Funds with Transactions. (LO2-3) Choose...Ch. 2 - Fund Balance Classifications. (LO2-3) Section A...Ch. 2 - Prob. 21EPCh. 2 - Major Funds. (LO2-4) At the end of the fiscal...
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