Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority

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True/False Questions 1. The term, Fund Balance, is used to indicate the residual net position of a proprietary fund. Answer: False 2. Net resources of a governmental fund represented by currently ... due taxes receivable is an example of a nonspendable fund balance Answer: False 3. Net resources of a governmental fund represented by prepaid insurance is an example of a nonspendable fund balance Answer: True 4. $200,000 to be used to fund government operations in the future from the General Fund is an example of an unassigned fund balance. Answer: True 5. Outstanding encumbrance of $80,000 for the purchase of furniture & fixtures is an example of a restricted fund balance. Answer: False 6. Rainy day funds are classified as restricted if they are created by a resolution or ordinance that identifies the specific circumstances under which the resources may be expended. Answer: False 7. If “rainy day” funds are available “in emergencies” or periods of “revenue shortfalls” they are not ordinarily classified as committed. Answer: True [Show More]

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