...Chapter 07 Accounting for the Business-type Activities of State and Local Governments True / False Questions 1. | For proprietary funds, governments generally present a statement of net position in a format that displays assets, plus deferred outflows of resources, less liabilities, less deferred inflows of resources, equals net position. True False | 2. | Internal service funds of one government may not provide goods or services, on a cost-reimbursement basis, to other governments. True False | 3. | Revenues of internal service funds should be recognized only when they are expected to be available in time to pay current liabilities of the fund. True False | 4. | Internal service funds should account for operating expenditures on the accrual basis. True False | 5. | Internal service funds account within the fund for any long-term liabilities to be serviced from revenue derived from fund operations. True False | 6. | Internal service funds should not account for depreciation of capital assets used in their operations, since this would, in effect, charge the government twice for the same assets. True False | 7. | Internal service funds are intended to operate on taxes or other financing sources authorized by the legally enacted revenue budget for each year; therefore, they are classified as governmental funds. True False | 8. | The net position of an internal service fund consists...
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...Jamaica Water Properties A Case Study The case is about an accounting fraud that involves the Jamaica Water Properties, Inc. The fraud was characterized by misapplication of purchase method of accounting for acquisitions, recording fictitious assets, improper accounting for NOLCO, non-recording of appropriate allowances for uncollectible receivables, and misapplication of the percentage-of-completion method of accounting for long-term contracts. Ernest Grendi made the fraud possible, company CFO as helped by three senior accountants. These were aimed to inflate the price of the company stocks because of overstated earnings that caused them to receive sizable bonuses. However, JWP internal auditors just tolerated all of these because of their fear of being fired. In addition, Ernst & Young, the company’s external auditor, knowing the fraudulent activities, have been issuing an unqualified opinion for six consecutive years. This has been seen as a product of the close relationship between Grendi and his co-conspirators with E&Y. 2011 JAMAICA WATER PROPERTIES: A Case Study Jamaica Water Properties A Case Study The case is about an accounting fraud that involves the Jamaica Water Properties, Inc. The fraud was characterized by misapplication of purchase method of accounting for acquisitions, recording fictitious assets, improper accounting for NOLCO, non-recording of appropriate allowances for uncollectible receivables, and misapplication of the percentage-of-completion...
Words: 21349 - Pages: 86
...Jamaica Water Properties A Case Study The case is about an accounting fraud that involves the Jamaica Water Properties, Inc. The fraud was characterized by misapplication of purchase method of accounting for acquisitions, recording fictitious assets, improper accounting for NOLCO, non-recording of appropriate allowances for uncollectible receivables, and misapplication of the percentage-of-completion method of accounting for long-term contracts. Ernest Grendi made the fraud possible, company CFO as helped by three senior accountants. These were aimed to inflate the price of the company stocks because of overstated earnings that caused them to receive sizable bonuses. However, JWP internal auditors just tolerated all of these because of their fear of being fired. In addition, Ernst & Young, the company’s external auditor, knowing the fraudulent activities, have been issuing an unqualified opinion for six consecutive years. This has been seen as a product of the close relationship between Grendi and his co-conspirators with E&Y. 2011 JAMAICA WATER PROPERTIES: A Case Study Jamaica Water Properties A Case Study The case is about an accounting fraud that involves the Jamaica Water Properties, Inc. The fraud was characterized by misapplication of purchase method of accounting for acquisitions, recording fictitious assets, improper accounting for NOLCO, non-recording of appropriate allowances for uncollectible receivables, and misapplication of the percentage-of-completion...
Words: 21349 - Pages: 86
