Ch 6

On March 2, 2017, a 20-year, 6%, general obligation serial bonds were issued by Mossy County at the face amount of $3,000,000. Interst of 6% per year is due semiannually on March 1 and September 1. The first principal payment of $150,000 is due March 1, 2018. The county's fiscal year end is December 31. What amounts are reported as interest expense in the government-wide financial statements and interest expenditure in the debt service fund for 2017? (A)

A) $150,000 expense & $90,000 expenditure B) $90,000 expense & $150,000 expenditure C) $150,000 expense & $150,000 expenditure D) $150,000 expense & $180,000 expenditure

Proceeds from bond issued to construct a new city hall would most likely be recorded in the journal of the: (A)

A) Capital projects fund B) Debt service fund C) General fund D) Enterprise fund

Which one of the following statements regarding debt margin is correct? (C)

A) Debt margin is the total amount of indebtedness of specified types of debt that is allowed by law to be outstanding at any one time B) Debt margin is calculated without regard to debt that is authorized but not yet issued C) Debt margin is the difference between the legal debt limit and the amount of net indebtedness subject to limitation D) All of the above statements regarding debt margin are correct

The liability for special assessment bonds for which the city is not obligated in any manner should be recorded in a: (D)

A) Debt service fund general journal B) Agency fund general journal C) Governmental activities general journal D) None of the fund or governmental activities general journals, but should be disclosed in the notes to the financial statements

The liability for long-term debt issued to finance a capital project will appear in which financial statement? (A)

A) Government-wide statement of net position B) Capital projects fund balance sheet C) Debt service fund balance sheet D) General fund balance sheet

Budgeting entries for a debt service fund would: (D)

A) Not include an entry for estimated revenues since taxes are always recorded directly into the General Fund B) Include an estimated adjustment to bonds payable equal to the amount of the principal payments that will become legally due during the fiscal year C) Include estimated other financing uses equal to the amount of interest payments that will become legally due during the fiscal year D) Include appropriations for principal payments that will become legally due during the fiscal year

Debt service funds may be sued to account for all of the following except: (C)

A) Repayment of debt principal B) Lease payments under capital leases C) Amortization of premiums on bonds payable D) The proceeds of refunding bond issues

Which of the following would not be considered a general long-term liability? (B)

A) The Estimated liability to clean up the hazardous waste storage sites of the city's Public Works Department B) Capitalized equipment leases of the water utility fund C) Compensated absences for the city's Police Department D) 5-year notes payable used to acquire computer equipment for the city's administrative offices

As a result of planning and setting aside funds to repay debt, substantial sums may be accumulated in accounts at financial insitutuions and in long-term investments. This subjects the government to which of the following types of risk? (D)

A) interest rate risk, custodial credit risk, concentration risk, and reinvestment risk B) Credit risk, concentration risk, interest rate risk, and market risk C) Concentration risk, custodial credit risk, interest rate risk, and liquidity risk D) Custodial credit risk, concentration risk, interest rate risk, and credit risk

Which of the following items would be reported in the Governmental Activities column of the government-wide financial statements?

Premium on Bonds Payable and Noncurrent portion of General Long-term Liabilities Payable