Problem 2: true/false questions13. The large deficit in Chicago's revolving funds was due to an accounting systems problem thatresulted in bills not being sent to user departments for services rendered.14. Internal service funds can obtain long-term financing by issuing either revenue bonds or generalobligation bonds.15. Enterprise funds report bad debt expense in the operating expenses section of the statement ofrevenues, expenses, and changes in net position.16. On an enterprise fund's statement of net position, the amount reported for restricted netposition can be based upon a constraint imposed by the governing body of the localgovernment.17. On the proprietary fund financial statements, internal service funds are reported under theheading of governmental activities.18. If cash flows from operating activities are not large enough to sustain the operations of anenterprise fund, the cash to sustain the operations must come from selling investments andcapital assets.19. On the proprietary funds statement of cash flows, GASB allows local and state governments theoption to report cash flows from operating activities either directly or indirectly.20. When the water utility bills the police department for water usage, the water utility debits"customer accounts receivable" for the amount of the billing.

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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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17. Which of the following provides a company with an efficient way to handle small payments of cash? a. Petty cash fund b. Bank account c. General reserve d. Allowance for doubtful accounts
A cash payment under a good control system will have. a. Too much amount Bank book balance b. Appointing different persons to authorize the payment and sign the cheques c. Too much amount book balance d. Maintaining minimum bank book balance
Which of the following statements is not correct?(1) Bank charges are not zero-rated item.(2) Input VAT is claimable on bank charges.(3) Bank charges are not exempt supply.(4) Input VAT is not claimable on bank charges.(5) Finance costs are exempt supply.
Which of the following reflects a weak internal control system? Please explain with full explanation. a. All employees are well supervised. b. A single employee is responsible for comparing a receiving report to an invoice. c. All employees must take their vacations. d. A single employee is responsible for collecting and recording cash.
TB MC Qu. 5-62 (Static) What is the primary disadvantage of extending... What is the primary disadvantage of extending credit to customers? Multiple Choice O Lower revenues Reduced operating efficiency O Lower profitability Delay or failure to collect cash
The company may need to borrow money if : a. total cash available is more than the cash needed for expenditure in the budget period . b. the cash needed for expenditure in the budget period trails behind the total cash available . c. the cash needed to pay for expenditures is less than the total of the opening cash balance plus the cash receipts in the budget period d. there is a cash deficiency in the budget period . e . None of the given answers .
The percentage of accounts receivable that is uncollectible can be ignored for cashbudgeting becausea. no cash is received from an account that defaults.b. it is included in cash sales.c. it appears on the budgeted income statement.d. for most companies, it is not a material amount.e. None of these.
The Cash Over and Short account: Multiple Choice Is used to record the income effects of cash overages and cash shortages. Is not necessary in a computerized accounting system. Can never have a credit balance. Is used when the cash account reports a credit balance. Can never have a debit balance.
6. An excerpt from an internal audit observation indicates that travel advances exceeded prescribed maximum amounts. Company policy provides travel funds to authorized employees for travel. Advances are not to exceed 45 days of anticipated expenses. Company procedures do not require justification for large travel advances. In this audit observation, the element of an audit finding known as “effect” is: Group of answer choices Advances are not to exceed estimated expenses for 45 days Unauthorized employees are given travel advances Employees accumulate large, unneeded advances Travel advances exceed prescribed maximum amounts
PA8. LO 8.6Which of the following transactions will require a journal entry? Indicate if it will be a debit or a credit and to what account the entry will be recorded. Transaction No Journal Entry Needed Journal Entry Needed Debit Credit Outstanding check Interest income NFS check Wire transfer by customer Deposit in transit Bank charges
15-The accounts receivable that cannot be collected because of their bankruptcy or another reason are termed as a. Bad customers b. Uncollectible accounts c. Collectible accounts d. Doubtful accounts

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13. The large deficit in Chicago's revolving funds was due to an accounting systems problem that resulted in bills not being sent to user departments for services rendered.