Author Question: The city of Trixie reports in its General Fund a 505,000 special item (a gain) and a 1,750,000 ... (Read 55 times)

captainjonesify · **on:** Jul 5, 2018

The city of Trixie reports in its General Fund a 505,000 special item (a gain) and a 1,750,000 extraordinary loss in the same year. Which of the following statements would be false?

a. Fund balance would decrease 1,245,000.
b. The extraordinary loss and the special item should be reported separately on the face of the Statement of Revenues, Expenditures, and Changes in Fund Balance.
c. Fund balance would increase by only 505,000.
d. Fund balance is not affected by special items or extraordinary gains or losses.
e. Items a and b are both false.
f. Items c and d are both false.

Question 2

Ramon Ramos has withdrawn 750 from Ramos Repair Company's cash account to deposit in his personalaccount. How does this transaction affect Ramos Repair Company's accounting equation?
a. Increase Assets (Accounts Receivable) and decrease Assets (Cash)
b. Decrease Assets (Cash) and decrease Owner's Equity (Owner's Withdrawal)
c. Decrease Assets (Cash) and decrease Liabilities (Accounts Payable)
d. Increase Assets (Cash) and decrease Owner's Equity (Owner's Withdrawal)