ACT410 Test 2

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Test 2
Top of Form
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Question 1
Which branch of local (city and county) government most commonly prepares the budget?
● a. executive branchThis answer is correct.
● b. legislative branch
● c. judicial branch
● d. none of the above
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Question 2
Under the accrual basis of accounting, property tax revenues are recognized _____.
● a. when they are received in cash
● b. in the year for which they were leviedThis answer is correct.
● c. in the year for which they were levied and when collection in cash is reasonably
assured
● d. when they are available to finance expenditures of the fiscal period
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Question 3
For which of the following funds would flexible budgeting be most valuable?
● a. Special revenue fund
● b. Capital projects fund
● c. Agency fund

2. ● d. Enterprise fundThis answer is correct.
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Question 4
Under the modified accrual basis of accounting, the amount of property tax revenues that should
be recognized by a government in the current year related to the current-year levy will be _____.
● a. the total amount of the levy
● b. the expected collectible portion of the levy
● c. the portion of the levy collected
● d. the portion of the levy collected in the current year or within sixty days after the end
of the fiscal periodThis answer is correct.
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Question 5
Property taxes levied on the citizens of the Hill County would most appropriately be budgeted in
which of the following budgets?
● a. operating budget
● b. capital budgetThis answer is incorrect.
● c. flexible budget
● d. all of the above
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Question 6
Under the modified accrual basis of accounting, investment revenues for the current period
should include _____.
● a. only interest and dividends received
● b. all interest and dividends received during the period plus all accruals of interest and
dividends earned
● c. all interest and dividends received plus gains and losses on securities that were
sold during the period

3. ● d. all interest and dividends received, all gains and losses on securities sold, and all
changes in market values on securities held in the portfolio at year-endThis answer is
correct.
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Question 7
As used in governmental accounting, inter-period 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
servicesThis answer is correct.
● c. levying property taxes at the same rate each year
● d. requiring that general fund budgets be balanced each year
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Question 8
An officially adopted budget is generally called ______.
● a. an appropriation bill
● b. an operating budget
● c. a capital budget
● d. none of the aboveThis answer is incorrect.
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Question 9
Periodic allocations of funds to departments or agencies are generally called _____.
● a. appropriations
● b. allotmentsThis answer is correct.
● c. allocations
● d. none of the above
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4. Question 10
Under the modified accrual basis of accounting, derived non-exchange revenues are recognized
when _____.
● a. they are earned
● b. they are measurable and available to finance the expenditures of the current
periodThis answer is incorrect.
● c. the underlying exchange transaction occurs
● d. the underlying exchange transaction occurs and they are measurable and available
to finance the expenditures of the current period