4273@stud+ php/139739/mod-resource/content/0/Quiz%203 pdf 6. The basis of accoun

Question

4273@stud+ php/139739/mod-resource/content/0/Quiz%203 pdf 6. The basis of accounting for a govemmental fund budget should be? A Cash basis B. Accrual basis. C. Modified accrual basis. D. Determined by the entity's governing body or by law or regulation. 7. Which of the following amounts are included in a governmental fund's encumbrances account? A Outstanding vouchers payable amounts. B. Excess amounts of purchase orders over actual expenditures. C. Outstanding purchase order amounts. D. Actual expenditure amounts. 8. As part of the state and local govenment accounting and reporting model, a budgetary comparison statement or schedule for the General Fund should be presented as A. A basic financial statement or required supplementary information. B. In the other information section of the CAFR C. A note to the financial statements D. Budgetary reporting is optional for governments A budgetary comparison schedule is required to include all of the following columns except A. The original budget. B. Actual on the GAAP basis. C. Final revised budget. D. Actual on the budgetary basis. 9. 10. The purpose of encumbrance accounting is to A. Manage a govemment's cash flows. B. Avoid expenditures exceeding appropriations. C. Replace expense accounting in governments. D. Prevent government waste

Explanation / Answer

6. The basis of accounting for governmental funds budget should be cash basis.

Explanation: Governmental funds are generally used the modified accrual basis of accounting in GAAP financial statements ,but for budgetary purposes cash basis of accounting or the "cash plus encumbrances" basis of accounting may be used .

7.Outstanding purchase order amounts are included in a Government fund's encumbrances account.

Explanation: When a requisition is processed, funds are placed aside for that transaction as reserve, this is to avoid budget overspending.

8. As part of the state and local government accounting and reporting model , a budgetory compraison or schdule for the general fund should be presented as A note to the financial Statments.

9. A budgetary comparison schedule is required to include all of the following columns except Actual on the GAAP basis.

10. The purpose of of encumbrance accounting is to Avoid expendatures exceeding appropriations.

Explanation: The purpose of encumbrance accounting is to prevent further expenditure of funds in light of commitments already made.

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