About government and non profit accounting subject.
Q1. State whether these statements are true or false. Discuss why the false statements are false.
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An entity is likely to be a governmental entity if a controlling majority of its governing body is appointed by governmental officials.
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The objective of a government is to provide services to its constituents.
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AICPA pronouncements have approximately the same level of authority as articles appearing in the Journal of Accountancy.
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The objective of a not-for-profit organization is to provide services to its constituents.
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By definition, all funds have cash, financial resources, and capital resources.
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The objective of a business organization is to enhance the wealth of its owners.
Q2. A department of a local government began operations at the beginning of the current fiscal year with $250,000 cash. During the fiscal year, the department made cash disbursements for the following:
# Salaries and other personnel costs, $100,000
# Office rent and utilities, $24,000
# Retirement of debt principal, $10,000; payment of interest, $2,200
# Purchased equipment at the beginning of the fiscal year for $30,000; the equipment is expected to last 6 years and have a salvage value of $6,000
# Photocopier rental, $10,500
Based on the preceding transactions, compute total annual expenditures for this department assuming it performs governmental-type activities and is accounted for in the General Fund.
Then compute total annual expenses for this department assuming it performs activities within an Enterprise Fund.
Q3. The council of the Town of Tulia approved the 2013 budget as follows:
Budgeted 2013 revenues from:
Property taxes $5,000,000
Sales taxes $1,000,000
Appropriations for 2013:
Salaries $4,600,000
Materials $1,200,000
Equipment $100,000
During 2013, the town’s mayor presented the council with a budget revision to increase the amount of appropriation for salaries by $10,000. The council approved this budget revision.
Required:
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Prepare the general journal entry necessary to initially record the budget.
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Prepare the general journal entry necessary to record the budget revision.
Q4. Following is a trial balance for Nadia Day Care, as of July 31, 2013, the end of its first month of business. Based on the trial balance, prepare an income statement for the month ended July 31, 2013, and a balance sheet as of July 31, 2013.
Debits Credits
Cash $27,400
Accounts receivable 500
Prepaid rent 2,500
Equipment 6,000
Accumulated depreciation, equipment $100
Accounts payable 300
Salaries payable 240
Interest payable 133
Notes payable 20,000
Capital 10,000
Revenues 11,500
Operating expense 1,000
Salary expense 1,840
Utility expense 300
Interest expense 133
Rent expense 2,500
Depreciation expense 100
Totals $42,273 $42,273
DETAILED ASSIGNMENT
