The Town of Greenburg levied property taxes in the amount of $1,600,000. The town estimates that 1 percent will be uncollectible. The journal entry to record the tax levy will include
A) A debit to Cash for $1,584,000.
B) A debit to Revenues for $1,584,000.
C) A credit to Allowance for Uncollectible Current Taxes for $16,000.
D) A credit to Estimated Revenues for $1,600,000.
The General Fund used electricity provided by the city-owned electric utility (an enterprise fund of the city). The General Fund general journal entry to record the transaction will include:
A) A debit to Expenses.
B) A debit to Expenditures.
C) A debit to Interfund Transfers Out.
D) A debit to Due to Other Funds.
Which of the following is not an objective of financial reporting by state and local governments?
A) To assist users in assessing the adequacy of systems and controls.
B) To assist users in assessing financial condition and results of operations.
C) To assist financial report users in comparing actual financial results with the legally adopted budget.
D) To assist in determining compliance with finance-related laws, rules, and regulations.
One of the minimum requirements for general purpose external financial reporting by governments is
A) Management's discussion and analysis (MD&A).
B) Transmittal letter.
C) Combining and individual fund statements.
D) Statistical information.
A statistical section should be included in
A) A comprehensive annual financial report (CAFR).
B) The basic financial statements.
C) The notes to the financial statements.
D) Required supplementary information, other than MD&A.
Recognizing revenues when measurable and available for paying current obligations and expenditures when incurred describes which basis of accounting?
B) Modified accrual.
C) Modified cash.
The Governmental Accounting Standards Board is assigned responsibility for setting accounting and financial reporting standards for
A) Governments such as federal agencies, states, cities, counties, villages, and townships.
B) State and local government entities and governmentally-related units and agencies, such as utilities, authorities, hospitals, and colleges and universities.
C) Not-for-profit organizations.
D) State and local governments and all not-for-profit organizations.
The Financial Accounting Standards Board has the responsibility for setting accounting and financial reporting standards for
A) All not-for-profit organizations that are nongovernmental and business entities.
B) All not-for-profit organizations and business entities.
C) All not-for-profit organizations.
D) Special purpose governments with a business purpose.
You are trying to decide if an entity you are reviewing is a government or a not-for-profit. Which of the following would indicate it is a government rather than a not-for-profit entity?
A) Absence of profit motive.
B) A primary source of revenues is taxes.
C) Resource providers do not expect benefits proportional to the resources provided.
D) Absence of a defined ownership interest that can be sold, transferred, or redeemed.
Property taxes = $1,600,000
Uncollectible taxes = 1% of property taxes
=1% of (1,600,000)
Journal entry to record the tax levy will be as follows -
|Property taxes receivable||1,600,000|
|Allowance for Uncollectible Tax||16,000|
So, the entry to record the tax levy will include a credit to allowance for uncollectible taxes for $16,000.
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