1. A government places an order for a particular item of equipment and encumbers $5,500. The item arrives accompanied by an invoice for $5,200. The entries that the government should make should include (but no necessarily be limited to):
a. A debit to expenditures for $5,200, a debit to fund balance for $300, and a credit to reserve for encumbrances for $5500
b. A debit to expenditures for $5200, a credit to encumbrances for $5200, and a credit to accounts payable for $5200
c. A debit to expenditures for $5200, a credit to encumbrances for $5500, and a credit to accounts payable for $5200
d. A debit to expenditures for $5200, a credit to reserve for encumbrances for $5200, and a credit to accounts payable for $5200

2. Per GASB Statement No. 34, governments must..
a. Prepare a general fund budget on a cash basis
b. Prepare a general fund budget on a modified accrual basis
c. Prepare a schedule that reconciles any differences between amounts reported on a GAAP basis and a budgetary basis
d. Prepare a schedule that reconciles any differences between the original budget and the amended budget


3. The amount that a government has available to spend for a particular purpose in a particular year would be indicated by
a. Encumbrances minus the sum of appropriations, expenditures and net adjustments
b. Reserve for encumbrances plus appropriations minus the sum of expenditures and net adjustments
c. Appropriations plus encumbrances minus the sum of expenditures and net adjustments
d. Appropriations minus the sum of expenditures, encumbrances and net adjustments


4. Upon ordering supplies a government should...
a. Debit encumbrances and credit reserve for encumbrances
b. Debit reserve for encumbrances and credit encumbrances
c. Debit expenditures and credit encumbrances
d. Debit expenditures and credit vouchers payable

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