Answered: 1. Tap fees, a portion of which exceed…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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1. Tap fees, a portion of which exceed the cost of hooking customers into the utility, should be accounted for as a. capital contributions. b. ordinary revenues. c. a combination of capital contributions and ordinary revenues. d. extraordinary items. 2. Landfill closure and postclosure costs should be recognized as expenses a. in the periods incurred. b. in the period that the landfill is closed. c. in the periods that the landfill is in operation. d. in the period in which the landfill is opened. 3. Which of the following would not be included in the computation of the amount to be recognized as a landfill closure expense? a. The total estimated closure costs b. The capacity of the landfill c. The proportion of capacity used in prior years d. An appropriate discount rate 4. A city maintains a staff of internal auditors. It may properly account for its internal audit costs in an internal service fund only if a. it is required to do so by state or city statutes or regulations. b. the internal audit activity is carried out in a discrete organizational unit. c. it charges a fee to the city departments for which it provides service. d. a GASB pronouncement specifies that internal audit activity is eligible for internal service fund accounting. Answer all questions

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