Question

Health care organizations and colleges use modified accrual basis of accounting. (true or false).

A balance in the Reserved for Encumbrances in excess of a balance of Encumbrances indicates: a) An excess of vouchers payable over encumbrances b) An excess of purchase orders over invoices received c) An excess of appropriations over encumbrances d) A recording error

Which of the following financial statements should be prepared for proprietary funds? a). Statement of revenues, expenditures, and changes in fund balance b). Statement of activities c). Statement of changes in proprietary net position d). Statement of cash flows

The general fund of XYZ City acquired 2 police cars at the beginning of 20x3, the cars at a cost of 40,000. The cars are expected to last 4 years and have a residual value of 10,000. SL Depreciation is used. On the balance sheet of govt funds, the police cars will be reported as assets for: 40,000 32,500, 0 22,500

Answer 1

Question 1:-

This statement is FALSE. Health care organizations and colleges generally do not use the Modified accrual basis of accounting and hence this statement is not true/valid.

Question 2:-

A balance in the Reserved for Encumbrances in excess of a balance of Encumbrances indicates: Option D - Recording error.When a balance in the reserves for encumburances is in excess of the balance of encumbrances, the result will be due to a Recording error.

Option A, Option B and Option C are all incorrect as they do not result in the excess of a balance in encumbrances.

Question 3:-

Based on the options available , the correct answer is Option A - Statement of revenues, expenditures, and changes in fund balance.

Option B, Option C and Option D are incorrect as they represent the answers individualy but do not mention all the requirements that should be prepared for Proprietory Funds.

Question 4:-

Police cars are generally reported as expenditures under the Government funds. Hence the carrying value of the cars would be Option C - $0.

Option A, Option B and Option D are incorrect based on the above considerations.

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