multiple choice 1 the measurement focus used by governmental fund measures a capital 4312001

multiple choice 1 the measurement focus used by governmental fund measures a capital 4312001

Multiple Choice

1.The measurement focus used by governmental fund measures:

a.capital resources

b.spendable resources

c.spendable resources and capital resources

d.economic resources

2.A government would refer to its property tax calendar to determine whether property taxes receivable at any given time are

a.collectible in part or in full

b.delinquent or current

c.sufficient to finance planned expenditures

d.larger or smaller than those of the prior year

3.At the time a government levies the property tax, an allowance for uncollectible property taxes is established so that

a.probable delinquent taxpayers can be identified individually

b.property tax revenues can be reported at a net collectible amount

c.an expenditure for bad debts is recorded in the accounts

d.property tax revenues will exceed the total amount of the levy

4.A municipality uses the allowance method to record uncollectible property taxes. If it decides to write off an account as uncollectible, it should:

a.debit bad debts expenditures; credit allowance for uncollectible property taxes

b.debit allowance for uncollectible property taxes; credit property taxes receivable

c.debit allowance for uncollectible property taxes; credit property tax revenues

d.debit property tax revenues; credit property taxes receivable

5.If a taxpayer fails to pay his property taxes on time and the city decides to foreclose the property, what accounting entry should the city make?

a.write off the property tax receivable as uncollectible

b.reduce property tax revenues by the amount of the receivable

c.reclassify the property tax receivable account to a delinquent receivable account

d.reclassify the property tax receivable account to a tax lien receivable account

6.A city levies property taxes of $1,050,000, but believes that it will not be able to collect $50,000 of those taxes.  What entry should it make when the taxes are levied?

a.Property taxes receivable 1,050,000                                                                      Allowance for uncollectible taxes                            50,000

Revenues – property taxes1,000,000

b.Revenues – property taxes50,000

Allowance for uncollectible taxes50,000

c.Property taxes receivable1,000,000

Revenues – property taxes 1,000,000

d.Allowance for uncollectible taxes50,000

Revenues – property taxes 50,000                            e.              No entry is required because cash has not yet been received.

7.A property owner receives a property tax bill for $4,000 and appeals the assessment. Before he pays the bill, the city reduces his property tax to $3,000. If the city had previously established an allowance for property tax refunds, what entry should it make to record the reduction?

a.Revenues – property taxes3,000

Property taxes receivable3,000

b.Revenues – property taxes1,000

Property taxes receivable1,000

c.Allowance for property tax refunds1,000

Property taxes receivable1,000

d.Tax liens receivable1,000

Property taxes receivable1,000

8.A city uses the allowance method to provide for uncollectible property taxes. At the start of the year, the city established an allowance of $100,000 for uncollectible taxes. During the year, it wrote off $80,000 as uncollectible. At year-end, the city still has some uncollected taxes, but believes it will need an allowance of only $15,000 to cover any receivables that it may need to write off as uncollectible. What adjusting entry should it make?             

a.Revenues – property taxes 5,000                                                                      Allowance for uncollectible property taxes                            5,000

b.Revenues – property taxes15,000

Allowance for uncollectible property taxes15,000

c.Allowance for uncollectible property taxes15,000

Property taxes receivable 15,000

d.Allowance for uncollectible property taxes5,000

Revenues – property taxes 5,000

9.At the beginning of the year 2013, a town recorded General Fund property tax receivables of $600,000. By year-end (December 31), taxpayers had paid a total $575,000. Based on previous experience, the town expected to collect the $25,000 of delinquent taxes as follows: $10,000 in January and February of 2014 and $15,000 between March and August of 2014. How much should the town report as property tax revenue in its General Fund statements for the year 2013?

a.$585,000

b.$600,000

c.$590,000

d.$575,000

10.On January 1, 2013, a city recorded General Fund property tax revenues of $750,000, but made no provision for uncollectible receivables or tax refunds. During the year, it collected property taxes of $720,000, wrote off $4,000 as uncollectible, and made tax refunds of $3,000. At year-end, the city finance director concluded that $10,000 of the delinquent taxes would be collected in January and February of 2014, $12,000 would be collected later in 2014, and $1,000 would need to be written off as uncollectible. How much should the city report as property tax revenue in its General Fund financial statements for the year 2013?

a.$720,000

b.$730,000

c.$742,000

d.$713,000

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