DAMOTHOTELANDBUSINESSCOLLEGE

4th YEAR BA degree in Accounting and Finance

Final-Exam for Government and NFP Accounting

Time Given: 2:30 hour

NAME____________________________ID.NO_________________SECTION___
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Instruction: The Exam Has Three Parts in which the1st part is True and False
Questions ,the 2nd part is multiple choice questions& 3nd part is workout
questions
I.True or false questions
1. Capital Budget are not Concerned with the current year’s operating expenditures and
include
salaries, wages, repairs and maintenance, telephones, petrol, stationery.
2. A General Purpose Government is a government that provides a single service or few services
to the citizenry
3. Enterprise fund provide services to users on a cost reimbursement basis.
4. Permanent Funds accounts for financial resources to be used for the acquisition or
construction of major capital project facilities.
5. Inter fund transfers is a transfer from one fund within the unit to another fund within
the same unit.
6. Capital Project fund is a type of fund use for the construction of new building for the city
government Administration.
7. Depreciation is recognized as expenditure in governmental funds because it is decrease
in fund financial resources.
8. Governmental Fund Financial Statements focuses on Accrual bases of Accounting.
9. Comprehensive Annual financial report covering all funds & account gropes of the
governmental unit including appropriate combined, combining & individual fund
statements,
10. Voluntary Non-Exchange Transactions are grants that are conveyed from higher government
to lower government to help pay for the costs of required program
10. Deprecation of general fixed assets should not be recorded in the accounts of governmental
funds.
11. Governmental funds account only for financial resources: cash, receivables, marketable
securities, and, if material, prepaid items & supplies inventories.
12. Proprietary funds have to adopt budgetary documents by law as governmental funds
13. Zero-Base-Budgeting (ZBB) is one method of traditional budgeting approach.
 14. Enacted Budget is a budget which is in still in process while A Tentative budget has been
officially approved and is a binding legal document.
15.Encumbrances are classified as operating statement Accounting instead of budgetary Accounts.

II. Choice questions

1. Which one of the following statement is false about business entity.
A. Legally separate organizations
B. Its operating purpose is other than to provide goods or services at a profit.
C. It may distribute surpluses
D. Easily transfer owner ship
2. Which one the following statements is true about the objectives of financial reporting
A. Providing information to the management of an organization
B. Providing information to investors, promoters, debt provider and creditors.
C. Providing information to shareholders & public
D. ALL
3. An entity is said to be a government if one of the following conditions are met except
A.Public corporations and bodies politic
B. Popular election of officers, or appointment of a controlling majority of the governing
body by officials of another government
C. Potential dissolution by a government with net assets reverting to a government
D. None
4---------------- Is one of the responsible body in developing a accounting & reporting standards
for state & local governmental unit
A. The governmental accounting standards board (GASB),
B. International financial reporting standard ( IFRS)
C. Financial accounting standard board FASB)
D. None
5. ------------ is self-supporting activities of a government that provide services to the public for a
fee.
A. Governmental activities C. Fiduciary activities
B. Business type activities D. None
6.Which of the following statement(s) are not included in the governmental funds:
A. Statement of Revenues, Expenditure and Changes in Net Assets
B. Balance sheet
C. Statement of Net Assets
D. All of the above are included
07.Which of the following General Fund accounts would not be closed at the end of the
fiscal
year?
A. Appropriations. C. Other Financing Uses
B. Due to Debt Service Fund. D. Estimated Revenue
08.A city government sells police cars no longer in use. No restrictions have been placed
on the proceeds. Which fund should account for the receipt?
A. A. Debt service fund. C. Capital projects fund
B. C. Enterprise fund. D. General fund
09. ---------------- Is one of the responsible body in developing a accounting & reporting
standards for state & local governmental units
A. The governmental accounting standards board (GASB),
B. International financial reporting standard ( IFRS)
C. Financial accounting standard board ( FASB)
10.A city government collects local option sales taxes legally restricted to pay for the
hiring
of teachers for hearing impaired school children. Which fund should account for the
receipt
of the sales taxes?
A. General fund. C. Capital projects fund
B. Special revenue fund. D. Private-purpose trust fun
11.which one of the following are not the main types of not-for-profit organizations?
A. Social advocacy organizations C. Trade organizations
B. Foundation D. For- Profit E. None
12. organizations can participate in a variety of business activities that generate profits,
and
the profits earned are distributed to shareholders according to their percentage of
ownership is called
A. For- profit B. Not-for-profit C. Government fund D.A&C
13. A present obligation arising from a non-exchange transaction that meets the definition of a
liability is recognized when,
A. Probable that an outflow of resources embodying future economic benefits
B. Reliable estimate can be made of the amount of the obligation
C. A and B
D. None of the above
14.------------------ is activities encompass the executive, legislative, and judicial functions of
the government as well as major service functions such as public safety, public works, parks and
recreation
A. Governmental activities C. Business type activities
B. Investing activities D. Operating activities
 15. When the budget for the General Fund is recorded, the required journal entry will
include
A. A credit to Estimated Revenues.
B. A Credit to Encumbrances.
C. A credit to Appropriations.
D. A credit to Budgetary Fund Balance E. C and D
16. Which of the following would appropriately be reported in a special revenue
fund?
A. Bond proceeds used to construct a building
B. Payments of principal and interest on long-term debt
C. A tax levy restricted to operating the emergency 911 system
D. General revenues budgeted to support the police department
17.Under Federal Accounting Standards Advisory Board (FASAB) identifies the
following
financial reporting objectives includes
A. FR should assist users in evaluating budgetary integrity
B. FR should assist users in evaluating Operating Performance
C. FR should assist users in evaluating adequacy of systems and control
D. ALL
18. The Fund Balance-Reserved for Encumbrances account is properly considered to be
a(an):
A. current liability if paid within a year; otherwise, long-term debt.
B. equity account; a reservation of fund equity.
C. budgetary account.
D. long-term liability wages
19. The comprehensive annual financial report (CAFR) of a government should contain
a statement of revenues, expenses, and changes in net assets for
A. Both proprietary and governmental funds.

B. Proprietary but not governmental funds.

C. Governmental but not proprietary funds.
D. Proprietary and fiduciary funds.
20. Which of the following activities or services would most likely not be accounted for by an
internal service fund?
A. Electronic data processing.
B. Central purchasing, warehousing, and issuing of supplies.
C. Municipal golf course.
D. Risk management.
21. Which of the following is (are) an appropriate basis of accounting for an enterprise fund?
A. Modified accrual basis: Yes; accrual basis: No:
B. Modified; Accrual basis: No; accrual basis: Yes
C. Modified accrual basis: Yes; accrual basis: Yes
D. Modified accrual basis: No; accrual basis: No
22. An internal service fund normally uses which of the following budgetary accounts?
A. Estimated Revenues.
B. Appropriations.
C. Encumbrances.
D. A. and B and C are all used
E. An internal service fund normally does not use budgetary accounts.
23. Which of the following funds are governmental funds?
A. General Fund, special revenue funds, capital projects funds, debt service funds, and private-
purpose trust funds.
B. General Fund and special revenue funds, private-purpose trust funds.
C. General Fund, special revenue funds, capital projects funds, debt service funds, and
permanent funds.
D. General Fund, special revenue funds, capital projects funds, debt service funds, and internal
service funds.
24. Governmental funds like debt service fund use the:
A. Economic resources measurement focus and accrual basis of accounting.
B. Current financial resources measurement focus and accrual basis of accounting.
C. Economic resources measurement focus and modified accrual basis of accounting.
D. Current financial resources measurement focus and modified accrual basis of accounting

25 .In which of the following funds is it appropriate to record depreciation of capital assets?
A. Internal service fund.
B. Permanent fund.
C. General fund.
D. Capital projects fund.

III. Work out questions

1.Addis Ababa Municipality formally ratified and adopted its fiscal budget for the Ethiopian
calendar year 2014 on the first day of July. The projected revenue generated from property
taxation is estimated at Br. 4,750,000.00, while interest and penalties are
expected to yield Br. 33,210.00, and revenues from licenses and permits are anticipated to
amount to Br. 27,600.00. Furthermore, the authorized appropriation for general
governmental expenditures is quantified at Br. 2,440,000.00, with allocations for public
safety totalling Br. 623,000.00 and welfare services amounting to Br. 333,000.00. In light
of the aforementioned data, please undertake the following tasks:
A. Compute the fund balance
B. Prepare the requisite journal entries, including subsidiary accounts.
2. The county established an internal service fund (Supplies Fund) to account for operation of the
purchasing and stores function. The fund received a transfer of Br. 500,000 from the General Fund.
The fund also received a long-term advance from the Sewer Utility Fund of Br. 250,000. The
advance will be repaid over a period of ten years in equal installments, with no interest.
Required
-The entry to record receipt of the initial sources of funding by the Supplies Fund would be:

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