Neco Model Questions Vol1 2024 Financial Accounting Question 5

Practice objective / multiple choice question 5 from the 2024 Neco Model Questions Vol1 Financial Accounting examination.

Neco Model Questions Vol1 2024 Financial Accounting Objective / Multiple Choice Hard Difficulty
Question 5 NECO_MODEL_QUESTIONS_VOL1 • 2024 • FINANCIAL_ACCOUNTING • objective

A local government records its finances on a modified accrual basis. For the year the revenues were: taxes \(2,000,000\), grants \(500,000\) and fees \(300,000\). Expenditures were: salaries \(1,200,000\), infrastructure projects \(800,000\) (capital expenditure) and debt service \(200,000\). Capital expenditures are recorded as assets and not expensed. (a) Calculate the cash surplus for the year. (b) If 30 % of the surplus is transferred to the Capital Projects Fund, how much is transferred to the Fund Balance - Unassigned?

Answer Options

A. Cash surplus = 600,000; Transfer to Fund Balance - Unassigned = 420,000
B. Cash surplus = 1,400,000; Transfer to Fund Balance - Unassigned = 420,000
C. Cash surplus = 1,400,000; Transfer to Fund Balance - Unassigned = 840,000
Correct Answer D. Cash surplus = 1,400,000; Transfer to Fund Balance - Unassigned = 980,000
Correct Answer
D
Correct Option:
Cash surplus = 1,400,000; Transfer to Fund Balance - Unassigned = 980,000

About This Question

This is Neco Model Questions Vol1 2024 Financial Accounting Question 5. It is one of the objective questions from the 2024 Neco Model Questions Vol1 Financial Accounting examination.

Difficulty level: Hard .

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