[Oimie]

NINJA Question –

I have to say, I feel Roger did quite a bad job with governmental accounting. I use reviews to build a foundation and use MCQs to piece everything together. I am currently going over just governmental MCQs and nothing is connecting. The questions are all over the place. I guess the topic is too huge. I have so many questions while going through the MCQs but I can’t get the answers from my textbooks or Google. I need a human being to answer them. Only way for me to do it is to spam this forum which I am holding myself back from doing. Anyways /endrant

Can someone help me with this question?

The following information is relevant to one of the City of Mullins’ General Fund’s derived tax revenues:

Fiscal year-end

---

June 30

Beginning receivables

---

$450,000

Beginning deferred revenues

---

100,000

Beginning allowance for doubtful accounts

---

50,000

Receipts

---

1,250,000

Ending receivables

---

600,000

Receivables collected 6/30 – 8/30

---

125,000

Ending allowance for doubtful accounts

---

60,000

The City of Mullins considers derived tax receivables collected within 60 days after the close of the fiscal year to be “available.” Furthermore, the City wrote off $30,000 of receivables as uncollectible during the year.

What would be the amount of deferred revenues reported at the fund level for year-end?

Answer is: $415,000 (600,000 End A/R – 125,000 Receivables collected – 60,000 ADA)

According to this answer, all receivables less ADA = Deferred revenue

However,

According to Roger’s example: The entry to record a billing is as follows:

Property tax receivable 2200

__________Revenues 1850

__________Deferred Revenues 225

__________Allowance for uncollectibles 125

The $225 is classified as deferred revenue because it’s not expected to be collected till after 60 days after end of the current fiscal year. It didn’t classify the whole $2075 as deferred revenue.

So what’s what the difference? Am I missing something? Can someone clear this up for me. Thank you.

FAR 85 June 2015
AUD 80 Nov 2015
REG 83 Nov 2015
BEC 79 Feb 2016

[Oimie]

Halderman County levies an imposed nonexchange form of tax in the year prior to the year of its intended collection and use. An enforceable legal claim does not arise until the period after the period of its intended collection and use. The following facts apply:

-On September 1, 20X1, the county levied $2 million of tax for FY 20X2—50% of the tax is due on January 15, 20X2, and the remainder is due July 15, 20X2.

-It is estimated 5% of the levy will be uncollectible.

-An enforceable legal claim for the September 1, 20X1, levy does not attach until January 15, 20X3.

It is estimated 90% of the September 1, 20X1, levy will be collected during the period January 1, 20X2, through February 28, 20X3. The balance will be collected at a later date, or go uncollected.

-The County uses an “availability period” equal to two months following the close of the fiscal year, and has a fiscal year-end of December 31.

-How much revenue would be reported at the fund level in 20X1?

A. $0

B. $1,500,000

C. $1,900,000

D. $2,000,000

Answer is 0:

Explanation: “Governmental entities should recognize revenues from property taxes, net of estimated refunds and estimated uncollectible amounts, in the period for which the taxes are levied, even if the enforceable legal claim arises or the due date for payment occurs in a different period. All other imposed nonexchange revenues should be recognized in the same period that the assets are recognized unless the enabling legislation includes time requirements. If so, revenues should be recognized in the period when the resources are required to be used or when use is first permitted.” (GASB N50.115)

The year taxes are levied is 20X1 for use in 20X2. The due dates for payment of the taxes are January 15, 20X2, and July 15, 20X2. With the schedule of payments, no revenues are recognized in 20X1

Two questions:

1. If the imposed nonexchange tax that is mentioned in this story is property tax, wouldn't they have recognize the revenue in year 20X1?

2. And if so, then how are we suppose to know if they're talking about property tax or not in this question?

FAR 85 June 2015
AUD 80 Nov 2015
REG 83 Nov 2015
BEC 79 Feb 2016

[Oimie]

A city council designates funds in the enterprise fund for future equipment replacement. The enterprise fund should report this as:

A. a restricted component of net position.

B. a net investment in capital assets.

C. a designated component of net position.

D. an unrestricted component of net position.

Answer is D.

Why isn't this considered restricted? According to my notes “restricted fun balance includes funds that are restricted for a specific purpose; imposed externally or imposed by law.”

FAR 85 June 2015
AUD 80 Nov 2015
REG 83 Nov 2015
BEC 79 Feb 2016

[CPA soon]

you answered your own question, this is internally designated therefore not restricted. Idk how i still remember this stuff lol

FAR - 71, 68, 74, (8/31/14) 78 ✔
REG - 67, 71, 71, (10/18/14) 78 ✔
BEC - (11/29/14) 86 ✔
AUD - 73, (4/4/15) 86 ✔

I can't believe this is over! 2 years and 3 months..

[Oimie]

@CPA soon: Haha thanks but isn't internally designated = committed funds? It still won't be unrestricted. And for a question like this how am I suppose to tell if the city council is internal or external? Isn't there levels in the government like state > city > town where one level tells another what they must do with the money?

FAR 85 June 2015
AUD 80 Nov 2015
REG 83 Nov 2015
BEC 79 Feb 2016

[Oimie]

Gem City's internal service fund received $50,000 cash from the general fund that does not need to be repaid. This should be reported in Gem's internal service fund as a credit to:

A.revenues.

B.other financing sources.

C.accounts payable.

D.transfers.

Answer: B

Inflows of assets from other funds without a requirement for repayment are considered interfund transfers. An interfund transfer to/from a governmental fund should be reported as “other financing sources or uses” in the governmental fund.

What's the difference between transfer ins and interfund transfers? Couldn't the answer have been D as well?

FAR 85 June 2015
AUD 80 Nov 2015
REG 83 Nov 2015
BEC 79 Feb 2016

[Oimie]

The following information pertains to Comb City:

Year 3 real estate property taxes assessed and collected in Year 3: 14,000,000

Year 2 real estate property taxes assess in Year 1 and collected in Year 3: 1,000,000

Year 3 sales taxes collected by merchants in Year 3 but not required to be remitted to Comb until January of Year 4: 2,000,000

For the year ending December 31, Year 3, Comb should recognize revenues of:

A. $14,000,000.

B. $15,000,000.

C. $16,000,000.

D. $17,000,000.

Answer is D: $14,000,000 + $1,000,000 + $2,000,000 = $17,000,000

Why is the 1,000,000, year 2's property taxes included in year 3's revenues? Property taxes are one of those exceptions where the revenues are recognized when it is billed + 60 days of the end of the fiscal year.

FAR 85 June 2015
AUD 80 Nov 2015
REG 83 Nov 2015
BEC 79 Feb 2016

[Oimie]

How would a municipality that uses modified accrual and encumbrance accounting record the transaction of the receipt of supplies from approved purchase orders and the approval of the related invoices?

A. Debit encumbrances control.

B. Debit expenditures control.

C. Credit appropriations control.

D. Credit other financing uses.

Answer is B.

Why isn't the answer A? I thought you do not debit expenditures until the goods have arrived? In this case the purchase orders were just approved and a receipt was sent in.

FAR 85 June 2015
AUD 80 Nov 2015
REG 83 Nov 2015
BEC 79 Feb 2016

[Mika]

feel your pain and i am so confuse with govt accounting

REG - 80 (02/13/2015) Roger + Ninja Flash Card + Ninja MCQ + Becker's Note
FAR - 84 (05/29/2015) Roger + Ninja MCQ + Some Wiley book questions
BEC - 77 (08/27/2015) Roger + Ninja MCQ + Half Wiley book questions
AUD - 87 (08/28/2015) Roger + Ninja MCQ + Half Wiley book questions

[Oimie]

@Mika: 🙁

FAR 85 June 2015
AUD 80 Nov 2015
REG 83 Nov 2015
BEC 79 Feb 2016

[Oimie]

Noting that interest rates are declining, Blue Township opted to retire an existing, callable general obligation bond and replace it with a new bond issue with lower interest. A $4,000,000, 5% bond originally issued at par value with 15 years remaining was retired for $4,100,000. A new $4,000,000, 2%, 30-year bond was issued. The new bond issue was sold at 104 and printing, legal, and administrative costs for the transactions amounted to $5,000. On the government-wide financial statements, this refunding would result in:

Answer: $4,000,000 liability due at maturity in 30 years plus a $105,000 contra liability to be amortized as a component of interest over 15 years, and a $160,000 additional liability to be amortized as a component of interest over 30 years.

Can someone explain? I have no idea what the explanation is saying.

FAR 85 June 2015
AUD 80 Nov 2015
REG 83 Nov 2015
BEC 79 Feb 2016

[Oimie]

Are you serious?? https://oi62.tinypic.com/i28ugj.jpg

I asked about this question on my 5th post on this thread. I answered D and they said it was B. Now I answer B and it says answer is D. What????? So is it B or D? And what is the difference between interfund transfer and transfer ins?

FAR 85 June 2015
AUD 80 Nov 2015
REG 83 Nov 2015
BEC 79 Feb 2016

[smazthespaz]

“Answer is B.

Why isn't the answer A? I thought you do not debit expenditures until the goods have arrived? In this case the purchase orders were just approved and a receipt was sent in.”

The question is stating that the supplies were received (not like a grocery store receipt) and invoices were approved for payment. in which case you would reverse the encumbrances control and record the expenditure/vouchers payable.

I feel the frustration. This is by far my most challenging topic to grasp (I wasn't able to get any of your other posts right).

REG - 83 11/24/14
AUD - 94 2/17/15
FAR - 93 5/26/15
BEC - 90 8/10/15

[Oimie]

@smazthespaz: Thanks! That's what I thought might have been the case. That wording though =.=

FAR 85 June 2015
AUD 80 Nov 2015
REG 83 Nov 2015
BEC 79 Feb 2016

[Jessica ZHAO]

when governmental fund approves the purchase order, debit encumbrances credit budgetary control, when received the goods, approves the invoice, reverse the previously recorded encumbrances and budgetary control. thus debit budgetary control, credit encumbrances. plus JE of debit expenditures, credit accounts payable.

[A]

Another Roger user here; I found his program sufficient for about 90% of what I was tested on, but Govt/NFP was weak sauce. However, I found the guidance I needed on Govt/NFP in the Ninja Plus videos. Bob walked through the entire booking process start to finish over several lectures, and I wrote out every step as I listened.

Jeff ran an “a la carte” sale on them a while ago, and although I initially balked at the $67 knowing I only needed a boost on a few topics, it was definitely worth it. You might even be able to find a set of original Bisk FAR video CDs on eBay, I think the newest ISBN dated to 2014 so be aware of topics that have been updated.

B - 77 (2.27.16)
A - 81 (4.18.16)
R -
F -

Roger Review + Ninja MCQs

[Author]

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