chapter 7 quiz
STUDENT’S NAME______________Jill Riester____89.97%_______________
CHAPTER 7 QUIZ
Indicate whether the following statements are true or false. (3.35 points each). For any false statement, indicate why it is false. (3.33 points)
__T___ 1. A direct cause-and-effect relationship exists between the revenues and expenses of an Internal Service Fund.
_____________________________________________________________________________________
___F__ 2. Internal Service Funds are used to account for activities that involve providing services and/or products to the general public.
Customers of Internal Service Funds are governmental departments within the same government or occasionaly nearby governments.
_F____ 3. Internal Service Funds use the modified accrual basis of accounting.
ISFs use the full accrual method of account so that revenue is recognized when earned.
__F___ 4. All capital contributions received by an Internal Service Fund are credited directly to the Net position accounts.
Capital contributions are credited to a “Transfer in” account when received by an Internal Service Fund. This account is closed at the end of the reporting period and the net amount is recorded in the Net Position account.
__F___ 5. A fixed budget is used to control an Internal Service Fund.
ISFs have a flexible budget (i.e., expenses are related to the level of operatios). A flexible budget allows higher levels of expenses at higher levels of operating activity.
___T__ 6. The budget is not usually recorded for an Internal Service Fund.
_____________________________________________________________________________________
___T_ x 7. Fixed assets used in an Internal Service Fund are reported in the fund-level statements.
__Fixed assets are reported as assets of the ISF.
__F___ 8. Depreciation expense is not recorded to an Internal Service Fund that uses fixed assets.
Depreciation expense is recorded in ISFs because of the need to measure all costs using a total economic resource
CHAPTER 7 QUIZ
Indicate whether the following statements are true or false. (3.35 points each). For any false statement, indicate why it is false. (3.33 points)
__T___ 1. A direct cause-and-effect relationship exists between the revenues and expenses of an Internal Service Fund.
_____________________________________________________________________________________
___F__ 2. Internal Service Funds are used to account for activities that involve providing services and/or products to the general public.
Customers of Internal Service Funds are governmental departments within the same government or occasionaly nearby governments.
_F____ 3. Internal Service Funds use the modified accrual basis of accounting.
ISFs use the full accrual method of account so that revenue is recognized when earned.
__F___ 4. All capital contributions received by an Internal Service Fund are credited directly to the Net position accounts.
Capital contributions are credited to a “Transfer in” account when received by an Internal Service Fund. This account is closed at the end of the reporting period and the net amount is recorded in the Net Position account.
__F___ 5. A fixed budget is used to control an Internal Service Fund.
ISFs have a flexible budget (i.e., expenses are related to the level of operatios). A flexible budget allows higher levels of expenses at higher levels of operating activity.
___T__ 6. The budget is not usually recorded for an Internal Service Fund.
_____________________________________________________________________________________
___T_ x 7. Fixed assets used in an Internal Service Fund are reported in the fund-level statements.
__Fixed assets are reported as assets of the ISF.
__F___ 8. Depreciation expense is not recorded to an Internal Service Fund that uses fixed assets.
Depreciation expense is recorded in ISFs because of the need to measure all costs using a total economic resource