EX 2-1

1. j $8,000
2. g $2,200
3. a $0
4. h $4,000
5. a $0
6. b $140
7. a $0
8. i $6,300
9. a $0
10. f $1,400

EX 4-1

1. d
2. a
3. b
4. c
5. c
6. d
7. b
8. b
9. a
10. a

EX 4-7

1. State’s entry for 2011

Taxes receivable $550 Sales tax revenues $550
To record sales taxes for 2011 (the entire amount, inasmuch as the taxes were remitted within 15 days of the close of the year and thus were “available”). The taxes collected in February were applicable to 2012 and thus are given no recognition on the 2011 statements.

2. City’s entry for 2011

Taxes receivable $ 55 Sales tax revenues $ 55
To record sales taxes for 2011. The city would recognize the entire amount of its share of taxes inasmuch as the taxes would be received in time to satisfy the “available” criterion.

Chapter 5 – Questions for Review and Discussion

1. Expenditures are decreases in net financial resources whereas expenses are reductions in overall net assets. Expenditures are governmental fund equivalents of expenses. In effect, expenditures are expenses that are determined on the modified rather than the full accrual basis of accounting.

2. Expenditures should be recognized on an accrual basis unless they qualify as one of the exceptions specifically set forth by the GASB. Utility costs are not such an exception and should thereby be recognized as an expenditure in the period in which the utility services are used.

Chapter 6 – Questions for Review and Discussion

1. Budgets, and hence budget comparisons, are not as essential for capital projects and debt service funds because they are often on a project, rather than an annual, basis and spending is typically authorized on that basis.

6. In their government-wide statements, governments would consolidate their capital projects and debt service funds with