Objective questions based on accounting


Question1: A government need not necessarily account for an activity in an enterprise fund even though it;

[A] Is required by law or policy to recover the cost of the activity by fees

[B] Opts to establish pricing policies so as to recover its costs, including capital costs

[C] Charges fees for the activity and those fees are material in amount

[D] Finances the activity solely with revenue debt

Question2: Except for FASB pronouncements that have been overridden by specific GASB pronouncements, in their enterprise funds governments must;

[A] Apply all FASB pronouncements issued subsequent to November 30, 1989

[B] Apply all FASB pronouncements issued prior to November 30, 1989, and governments may apply pronouncements of their choosing issued after that date

[C] Apply all FASB pronouncements, irrespective of when issued

[D] Apply all FASB pronouncements issued prior to November 30, 1989, and apply either all or none of the pronouncements issued after that date

Question3: Tap fees that exceed the cost of hooking customers into the utility should be accounted for as;

[A] A combination of capital contributions and ordinary revenues

[B] Extraordinary items

[C] Capital contributions

[D] Ordinary revenues

Question4: Landfill closure and post-closure costs should be recognized as expenses;

[A] In the periods that the landfill is in operation

[B] In the period in which the landfill is opened

[C] In the periods incurred

[D] In the period that the landfill is closed

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Accounting Basics: Objective questions based on accounting
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