11.In Proprietary Fund accounting, which of the following statements are true?

a.materials and supplies are recognized as expenditures when purchased

b.materials and supplies are recognized as expenses when consumed

c.capital assets are considered as expenditures when they are acquired

d.capital assets are not recorded in proprietary funds

12.You are computing an hourly billing rate for the Print Shop Internal Service Fund. Which of the following items should become part of the rate?

a.salaries paid to maintenance staff

b.materials consumed during the year


d.all of the above

13.An Internal Service Fund (ISF) sends bills for motor vehicle services to various departments that receive appropriations from the General Fund. When it sends the bills out, which account should the ISF credit?

a.due from general fund

b.other financing sources – motor vehicle services

c.revenues – motor vehicle services

d.expenditures – motor vehicle costs

14.Which of the following statements is true about the source of Enterprise Fund revenues?

a.enterprise fund revenues may include revenues from sales to governmental agencies

b.enterprise fund revenues always come from sales to individuals and organizations other than governmental organizations

c.enterprise funds never receive governmental subsidies

d.enterprise funds record proceeds from revenue bonds as revenues

15.Which basis of accounting is used by Enterprise Funds?

a.full accrual

b.modified accrual


d.modified cash

16.Under which of the following circumstances must an Enterprise Fund be used?

a.when its activities are partially financed with advances from the general fund

b.when its activities are financed with debt that is secured solely by the full faith and credit of the related primary government

c.when its activities are financed with debt that is secured solely by a pledge of the net revenues from the charges made by the activity

d.when its activities are financed in such a way that all costs except capital costs are covered.

17.Which of the following accounts properly would not appear in a proprietary-type statement of net position (balance sheet)?

a.accumulated depreciation

b.retained earnings

c.net position, unrestricted


18.Which of the following accounts properly would not appear in the operating statement of a proprietary-type fund?

a.transfer in from the general fund

b.depreciation expense

c.expenditures–capital outlay

d.revenues–charges for services

19.Which of the following would least likely be accounted for in an Enterprise Fund?

a.a local government’s mass transit operation

b.a public swimming pool for which the government charges admission fees

c.a municipal golf course

d.a fire department

20.Which of the following accounts would be least likely to appear in an Enterprise Fund statement of net position (balance sheet)?

a.cash and cash equivalents

b.general obligation bonds payable

c.net investment in capital assets

d.equipment acquired under capital leases

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