ACC 410 WK 4 Quiz 3 Ch. 4
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1. If an entity elects to focus on all economic resources (both current and long-term assets and liabilities), then it should adopt a modified accrual basis of accounting.
2. The budgetary measurement focus of governments is determined by applicable state or local laws.
3. The revenue-recognition issues facing governments are simpler to resolve than those of businesses.
4. Governmental activities tend to derive the majority of their revenues from exchange transactions.
5. In accounting for property taxes, under the modified accrual basis, existing standards provide that, except in unusual circumstances, revenues should be recognized only if cash is expected to be collected within sixty days of year-end.
6. Ad valorem taxes are taxes that are based on value.
7. Income taxes are classified as ad valorem taxes.
8. Sales taxes are taxpayer assessed, that is, parties other than the beneficiary government determine the tax base.
9. All intergovernmental grants are accounted for in exactly the same way.
10. Revenues that cannot be classified as general revenues are by default considered program revenues.
11. Taxes that are imposed on the reporting government’s citizens are considered general revenues, even if they are restricted to specific programs.
MULTIPLE CHOICE (CHAPTER 4)
1. As used in governmental accounting, interperiod equity refers to a concept of
a) providing the same level of services to citizens each year.
b) measuring whether current year revenues are sufficient to pay for current year services.
c) levying property taxes at the same rate each year.
d) requiring that general fund budgets be balanced each year.
2. For fund financial statements, the measurement focus and basis of accounting used by governmental fund types are