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venchlu
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Posted: 17 May 2010 at 12:51 \| IP Logged

The question is from 2010 AICPA released questions-

In Soan County's general fund statement of revenues, expenditures, and changes in fund balances, which of the following has an effect on the excess of revenues over expenditures?

a. Purchase of fixed assets.

b. Payment to a debt-service fund.

c. Special items.

d. Proceeds from the sale of capital assets.

Explanation

Choice "a" is correct.

Can someone tell me what about D? Thanks

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roselle
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Posted: 22 Jul 2010 at 23:09 \| IP Logged

I don't understand either. Could anybody help? Thanks.

CPASTONE
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Posted: 23 Jul 2010 at 04:09 \| IP Logged

Well lets try through elimination.

D is eliminated as it is never reported in Fund Financials.
C special item, I have never heard any thing like that going in Statement of Rev, Expenditure and Changes in fund balance
B.Payment to a service debt fund is "other financing sources and not an expenditure.

So this leave us with A, purchase of fixed assets which is nothing but expenditure on Statement of Rev, Expenditure and Changes in fund balance.

So A should be the answer. Anyone pls add.

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1tryCPA
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Posted: 23 Jul 2010 at 07:54 \| IP Logged

Proceeds from sale of capital assets are shown on this statement as other fin sources but after the line excess of revenues over expenses.

Special item - it's something like unfrequent but not unusual w/in management control: example they give in Wiley book - sale of park land - also shown after the line excess of revenues over expenses

payment to debt service fund - other financial uses

leaves us with purchase of fixed assets that are expenditures on general fund statements

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CPASTONE
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Posted: 23 Jul 2010 at 10:46 \| IP Logged

Yes. Nice explanation. My post just shows how poor I am doing in Government Accounting :(.

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