Question 1

What amount of gain/loss should be reported in the government-wide financial statements?

Accepted Answer

A)  $0.
B)  $3,000 gain.
C)  $3,000 loss.
D)  $7,000 gain.E) A) and B)
F) A) and C)

Question 2

Which of the following is NOT a benefit to cities of participating in their state's investment pool?

Accepted Answer

A)  Lower trading costs.
B)  Concentration on the latest innovative investment instruments.
C)  Shared costs of receiving expert investment advice.
D)  Greater opportunity to diversify.E) B) and C)
F) A) and D)

Question 3

Fair value accounting is required for investments in:

Accepted Answer

A)  External investment pools
B)  Open-end mutual funds
C)  Bonds and other debt securities
D)  All of the aboveE) A) and D)
F) A) and C)

Question 4

General capital assets are distinguished from the capital assets of proprietary funds and fiduciary funds.

Accepted Answer

A) True 
 B)False

Question 5

The objectives of financial reporting for capital assets should be to provide information

Accepted Answer

A)  About a governmental entity's physical resources.
B)  That can be used to assess the service potential of a governmental entity's physical resources.
C)  To help users assess a government's long- and short-term capital needs.
D)  All of the above.E) C) and D)
F) A) and B)

Question 6

At the government-wide level,governments must depreciate inexhaustible assets,such as land,works of art,or historical treasures.

Accepted Answer

A) True 
 B)False

Question 7

Most infrastructure assets are the responsibility of the federal government,not state and local governments.

Accepted Answer

A) True 
 B)False

Question 8

General capital assets are not reported in governmental funds because

Accepted Answer

A)  The measurement focus of governmental funds is on current financial resources.
B)  They are not used to used generate revenues.
C)  The basis of accounting is accrual.
D)  None of the above.E) A) and B)
F) All of the above

Question 9

Concentration of credit risk is

Accepted Answer

A)  The risk that an issuer or other counterparty to an investment will not fulfill its obligations.
B)  The risk of loss attributed to participating in a state investment pool.
C)  The risk of loss attributed to the magnitude of a government's investment in a single issuer.
D)  The risk that changes in exchange rates with blocs of countries that have pooled their currencies will adversely affect the fair value of an investment.E) B) and C)
F) None of the above

Question 10

Hilltop School District receives a donation of ten computers from Computer Hut,a local computer firm.The cost to Computer Hut of each computer is $2,500.The retail value of each computer is $3,000.Assuming that the district maintains its books and records in a manner that facilitates the preparation of the fund financial statements,what is the appropriate entry in the general fund to record this donation?

Accepted Answer

A)  Debit Computer equipment $25,000;Credit Donation revenue $25,000.
B)  Debit Computer equipment $30,000;Credit Other financing sources-donation $30,000.
C)  Debit Computer equipment $30,000;Credit Donation revenue $30,000.
D)  No entry.The computers are not financial resources.E) A) and B)
F) B) and D)

Question 11

Governments are prohibited from entering into reverse repurchase agreements.

Accepted Answer

A) True 
 B)False

Exam 7: Capital Assets and Investments in Marketable Securities

General capital assets are distinguished from the capital assets of proprietary funds and fiduciary funds.

Correct Answer
verified

Concentration of credit risk is

Correct Answer
verified

Fair value accounting is required for investments in:

Correct Answer
verified

Most infrastructure assets are the responsibility of the federal government,not state and local governments.

Correct Answer
verified

Correct Answer
verified

The objectives of financial reporting for capital assets should be to provide information

Correct Answer
verified

What amount of gain/loss should be reported in the government-wide financial statements?

Correct Answer
verified

Governments are prohibited from entering into reverse repurchase agreements.

Correct Answer
verified

Which of the following is NOT a benefit to cities of participating in their state's investment pool?

Correct Answer
verified

General capital assets are not reported in governmental funds because

Correct Answer
verified

At the government-wide level,governments must depreciate inexhaustible assets,such as land,works of art,or historical treasures.

Correct Answer
verified

Exam 7: Capital Assets and Investments in Marketable Securities

General capital assets are distinguished from the capital assets of proprietary funds and fiduciary funds.

Correct AnswerverifiedShow Answer

Concentration of credit risk is

Correct AnswerverifiedShow Answer

Fair value accounting is required for investments in:

Correct AnswerverifiedShow Answer

Most infrastructure assets are the responsibility of the federal government,not state and local governments.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The objectives of financial reporting for capital assets should be to provide information

Correct AnswerverifiedShow Answer

What amount of gain/loss should be reported in the government-wide financial statements?

Correct AnswerverifiedShow Answer

Governments are prohibited from entering into reverse repurchase agreements.

Correct AnswerverifiedShow Answer

Which of the following is NOT a benefit to cities of participating in their state's investment pool?

Correct AnswerverifiedShow Answer

General capital assets are not reported in governmental funds because

Correct AnswerverifiedShow Answer

At the government-wide level,governments must depreciate inexhaustible assets,such as land,works of art,or historical treasures.

Correct AnswerverifiedShow Answer

Correct Answer
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