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Gov&NFP - Chapter 4

A detailed infographic illustrating modified accrual accounting principles, featuring elements like property taxes, revenue recognition, and state grants, professional and educational style.

Understanding Modified Accrual Accounting

Test your knowledge of modified accrual accounting with this comprehensive quiz designed for students and professionals alike. Delve into key concepts surrounding revenue recognition, property taxes, and grant revenues.

11 engaging questions
Multiple choice and checkbox formats
Focus on governmental accounting principles

11 Questions3 MinutesCreated by ExploringKnowledge101

Under the modified accrual basis of accounting , revenues cannot be recognized

Until cash has been collected

Unless they will be collected within 60 days of year-end

Until they are subject to accrual

Until they are measurable and available

"Available" (as in 'measurable and available") means

Available to finance expenditures of the current period

Subject to accrual

Collectible

Available for appropriation

Property taxes are an example of

An imposed exchnage transaction

An imposed nonexchange transaction

A derived transaction

A government-mandated nonexchange transaction

To be considered "available", property taxes must have been collected either during the government's fisccsal year or within

The time it takes for the government to liquidate its obligations from the prior year

30 days of year-end

60 days of year-end

The following fiscal year

For its fiscal year ending September 30, 2017, Twin City levied $500 million in property taxes. It collected taxes applicable to fiscal 2017 as follows: June 1, 2016, through Sept. 30, 2016 $20 Oct. 1, 2016, through Sept. 30, 2017 $440 Oct. 1, 2017, through Nov. 30, 2017 $15 Dec. 2017 $4 . 25. The city estimates that $10 million of the outstanding balance will be uncollectible. For the fiscal year ending Sept. 30, 2017, how much should Twin City recognize in property tax revenue (in millions) in its general funds?

$440

$460

$475

$490

26. Assume the same facts as in the previous example. How much should Twin City recognize in property tax revenue in its government-wide statement of activities?

$440

$460

$475

$490

27. A school district received property taxes in advance of the year in which they were due and for which they were budgeted. Such taxes should be recognized as

Revenue

A liability

Deferred revenue

A deferred inflow of resources

28. Central City was awarded two state grants during its fiscal year ending Sept. 30, 2017: a $2 million block grant that can be used to cover any operating expenses incurred during fiscal 2018, and a $1 million grant that can be used any time to acquire equipment for its police department. For the year ending Sept. 30, 2017, Central City should recognize in grant revenue in its fund financial statements:

29. Assume the same facts as in the previous example. How much should the city recognize in grant revenues in its government—wide statements?

30. Assuming that a government will collect its sales taxes in sufficient time to satisfy the “available” criterion, it would ordinarily recognize revenue from sales taxes in its governmental fund statements

When the underlying sales transaction takes place

On the date the merchant must remit the taxes to the government

On the date the merchant must file a tax return

When the taxes are received by the government

31. Assuming that a government will collect its sales taxes in sufficient time to satisfy the “available” criterion, it would ordinarily recognize revenue from sales taxes in its government-wide statements

When the underlying sales transaction takes place

On the date the merchant must remit the taxes to the government

On the date the merchant must file a tax return

When the taxes are recceived by the government

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