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CPA FAR Government Accounting and Reporting
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Governmental Accounting and Reporting is a core component of the CPA Financial Accounting and Reporting (FAR) exam, typically accounting for 5–15% of the total score. This section focuses on the unique standards set by the Governmental Accounting Standards Board (GASB) for state and local governments.  1. Key Concepts & Measurement Focus Unlike for-profit accounting, governmental accounting uses two distinct "lenses" for reporting:  Fund Accounting: Resources are segregated into self-balancing sets of accounts (funds) based on their specific purpose or legal restrictions. Modified Accrual... Show more
CPA FAR Government Accounting and Reporting
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17 Questions

1. Which of the following correctly describes an internal service fund?
2. When Gidhaur’s budget is adopted and recorded, the budgetary control account would include:
3. The City of Pappu levied property taxes of $6,000,000 for the current year and estimated that $250,000 would be uncollectible. The journal entry for the property tax levy in the general fund would include:
4. Which of the following regarding funds and fund accounting is correct?
I. Fund accounting supports financial control by helping prevent overspending.
II. A fund is a sum of money set aside to accomplish a specific goal.
5. All funds of a state or local government unit must be categorized as one of three separate classifications. Which of the following is NOT one of those classifications
6. The city of Morgan spent $50,000 on a new fire truck in Year 13. They also paid the 10 firemen their salaries of $60,000 each for Year 13. In addition they paid $12,000 to paint and maintain the firehouse during that year. Assume the fire department is accounted for as part of a governmental-type fund for the city of Morgan. How much represents expenditures for the Year 13 in the fund-based financial statements?
7. How much revenue should Reading Township account for in proprietary-type funds in Year 13?,$47
8. The Township of Babloo should report the construction in progress for a senior center as an asset in the:
I. government-wide statement of net assets
II. capital projects fund
9. Which of the following describes the basis of accounting used and measurement focus for all governmental-type funds?
10. The city of Wildwood is looking to rebuild Convention Hall. In Year 13, the state of New Jersey sent an unrestricted grant to the city for $2,000,000 that the city council plans to use in the construction. The remainder of the proceeds came from a 6% bond issuance in the amount of 10,000,000 issued at par on January 1 of Year 13. The bonds pay interest annually on June 30 and December 31. If the City of Wildwood accounts for the construction of City Hall in the capital projects fund, the City of Wildwood should credit other financing sources in Year 13 in the amount of:
11. With regard to the dual objectives of governmental reporting, the idea that government agreement should be accountable to its public by demonstrating that resources allocated for a specific purpose are used for that purpose is described as:
I. operational accountability
II. fiscal accountability
12. The City of Spanktown accounts for its public utility in an enterprise fund. On June 15, Year 13, the general fund for the City of Spanktown sent a check to the enterprise fund in the amount of $50,000. The general fund will debit “other financing uses” in Year 13 if the $50,000 sent to the enterprise fund was to:
I. pay the electric bill for City Hall
II. cover a cash shortfall in the enterprise fund resulting from storm-related damage
13. The journal entry to record the encumbrance on February 3 would include a:
14. For a governmental entity, which of the following is an example of a derived revenue?
I. Sales tax
II. Income tax
III. Property tax
15. The Township of Woodbridge prepares which of the following as part of its government-wide financial statements?
I. Statement of activities
II. Statement of net assets
III. Statement of cash flows
16. The Township of Dabloo is preparing general purpose financial statements for Year 13. The question has arisen as to whether the school system should be viewed as a primary government so that separate financial statements are appropriate. Which of the following would need to be shown for the school system to qualify as a separate primary government?
17. The journal entry to record the receipt of the backup generator on March 10 would include a:,debit to budgetary control for $40

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