GOV Ch 5-8
The following items were included in Castle City's General Fund expenditures for the year ended June. Personal computer for the city treasurer $ 6,000 Furniture for the mayor's office $ 20,000 How much should be classified as capital assets in Castle City's General Fund balance sheet at June 30? $ 0. $ 6,000. $20,000. $26,000.
$ 0.
The following cash transactions were among those reported by Genesee County's Wastewater Enterprise Fund for the year: Proceeds from sale of revenue bonds for construction $5,000,000 Interest income 300,000 Capital contributed by developers 1,000,000 In the Wastewater Enterprise Fund's statement of cash flows for the year ended December 31, what amount should be reported as cash flows from investing activities? $ 300,000. $1,300,000. $5,300,000. $6,300,000.
$ 300,000.
Which of the following should be accounted for in an internal service fund? Light poles to be paid for in installments by affected property owners $ 350,000 Van used to transport supplies to all city departments on a cost reimbursement basis 65,000 Equipment used for supplying electric power to residents 1,250,000 $ 65,000. $ 415,000. $1,250,000. $1,315,000.
$ 65,000.
In late April, the Acme Construction Co. submitted a $1,200,000 progress billing on a construction contract. On May 2, the bill was approved for payment, subject to a ten percent retention, as provided by the contract. The amount that should be debited to Construction Expenditures is: $ 0. $ 12,000. $1,080,000. $1,200,000.
$1,200,000.
Which of the following should be accounted for in an enterprise fund? Light poles to be paid for in installments by affected property owners $ 350,000 Van used to transport supplies to all city departments on a cost reimbursement basis 65,000 Equipment used for supplying electric power to residents 1,250,000 $ 65,000. $ 415,000. $1,250,000. $1,315,000.
$1,250,000.
On March 2, 2016, 20-year, 6 percent, general obligation serial bonds were issued at the face amount of $3,000,000. Interest of 6 percent per annum is due semiannually on March 1 and September 1. The first payment of $150,000 for redemption of principal is due on March 1, 2017. Fiscal year-end occurs on December 31. What is the interest expense for the fiscal year ending December 31, 2016? $90,000. $135,000. $150,000. None of the above.
$150,000.
The following items were included in Castle City's General Fund expenditures for the year ended June Personal computer for the city treasurer $ 6,000 Furniture for the mayor's office $ 20,000 How much should be classified as capital assets in Castle City's government-wide statement of net position at June 30? $ 0. $ 6,000. $20,000. $26,000.
$26,000.
The following balances are included in the subsidiary records of Carrollwood: Town hall building $ 500,000 Town pool (supported by user fees) 100,000 Police cars 20,000 Equipment 7,500 Office supplies 1,000 What is the total amount of general capital assets held by the town? $527,500. $528,500. $627,500. $628,500.
$527,500.
The following cash transactions were among those reported by Genesee County's Wastewater Enterprise Fund for the year: Proceeds from sale of revenue bonds for construction $5,000,000 Interest income 300,000 Capital contributed by developers 1,000,000 In the Wastewater Enterprise Fund's statement of cash flows for the year ended December 31, what amount should be reported as cash flows from capital and related financing activities? $5,000,000. $5,300,000. $6,000,000. $6,300,000.
$6,000,000.
The following general capital assets were owned by the Town of Otterville: Town buildings $ 3,250,000 Intangible assets 1,000,000 Streets, sidewalks, and water lines 2,000,000 What amount should be recorded as capital assets in the town's governmental activities accounts? $0. $3,250,000. $5,250,000 $6,250,000
$6,250,000
On March 2, 2016, 20-year, 6 percent, general obligation serial bonds were issued at the face amount of $3,000,000. Interest of 6 percent per annum is due semiannually on March 1 and September 1. The first payment of $150,000 for redemption of principal is due on March 1, 2017. Fiscal year-end occurs on December 31. What is the interest expenditure for the fiscal year ending December 31, 2016? $90,000. $135,000. $150,000. None of the above.
$90,000.
The City of Oak Park constructed a new storage facility using the city's own public works employees. Construction costs were incurred in the amount of $900,000, plus $25,000 in interest on short-term notes used to finance construction. What amount should be capitalized in the government-wide statements? $900,000. $925,000. $875,000. $0.
$900,000.
When a new utility customer submits a deposit, the enterprise fund journal entry will include: A credit to Customer Deposits. A debit to Customer Deposits. A debit to Sales of Water. A credit to Sales of Water.
A credit to Customer Deposits.
The General Fund of the City of Castle Rock transfers $115,000 to the debt service fund for a $100,000 principal and $15,000 interest payment. The recording of this transaction would include: A debit to Interest Expenditures in the General Fund. A debit to Interest Expenditures in the governmental activities accounts. A credit to Other Financing Sources — Interfund Transfers In in the debt service fund only. A credit to Other Financing Sources — Interfund Transfers In in both the debt service fund and governmental activities accounts.
A credit to Other Financing Sources — Interfund Transfers In in the debt service fund only.
At the inception of a capital lease for equipment the journal entry required in the capital projects fund will include which of the following? A debit to Equipment. A debit to Capital Lease Expense. A credit to Obligations under Capital Leases. A credit to Other Financing Uses-Capital Leases.
A credit to Other Financing Uses-Capital Leases.
When utility customers are billed during the year, the enterprise fund journal entry will include: A debit to Sales of Water. A debit to Cash - Restricted. A debit to Customer Accounts Receivable. All of the above.
A debit to Customer Accounts Receivable.
When a supplies internal service fund records a billing to the General Fund, the journal entry in the internal service fund will include: A debit to Due from General Fund. A debit to Due to General Fund. A debit to Billings to Department. A debit to Inventory of Supplies.
A debit to Due from General Fund.
The General Fund of the City of Castle Rock transfers $115,000 to the debt service fund for a $100,000 bond principal and $15,000 interest payment. Subsequent payment of the principal and interest would include: A debit to Expenditures — Bond Interest in the debt service fund. A debit to Other Financing Uses — Principal and Interest Payments in the debt service fund. A debit to Interest Expenditures in the General Fund. A debit to Interest Expenditures in the governmental activities accounts.
A debit to Expenditures — Bond Interest in the debt service fund.
On the due date for bond interest, the debt service fund journal entry (or entries) will include: A debit to Bonds Payable. A debit to Interfund Transfers Out. A debit to Expenditures-Bond Interest. A debit to Interest Expense.
A debit to Expenditures-Bond Interest.
When a supplies internal service fund records a billing to the General Fund, the journal entry in the General Fund will include: A debit to Cost of Supplies Issued. A credit to Interfund Loans Payable. A debit to Expenditures. A credit to Billings to Department.
A debit to Expenditures.
If a city has an unpaid capital lease obligation at the beginning of its fiscal year, the journal entry in the debt service fund to record the lease payment during that fiscal year will include: A debit to Capital Lease Obligations Payable. A credit to Expenditures—Principal of Capital Lease Obligation. A debit to Expenditures—Principal of Capital Lease Obligation. A debit to Interest Expense on Capital Leases.
A debit to Expenditures—Principal of Capital Lease Obligation.
Which of the following statements regarding debt service funds is true? Given the size and relevance of general long-term liabilities, debt service funds are always reported as major funds. GASB standards require a separate debt service fund to be established for each issuance of tax-supported or special assessment debt. A debt service fund is used only for debt service activities related to general long-term liabilities. Annual budgets must be prepared for debt service funds and reported in the statement of revenues, expenditures, and changes in fund balances-budget and actual.
A debt service fund is used only for debt service activities related to general long-term liabilities.
Which of the following would be considered a general capital asset? A vehicle purchased from General Fund revenues. A vehicle purchased and maintained by an enterprise fund. A computer purchased from revenues of an internal service fund and used by the supplies department. Real estate purchased with the assets of a pension trust fund.
A vehicle purchased from General Fund revenues.
Which of the following is not a true statement about the Allowance for Funds Used During Construction (AFUDC)? AFUDC may have either a debt component or an equity component. The amount credited to AFUDC may exceed the amount of interest paid during the period on bonds issued for construction. AFUDC may be credited for an imputed amount of interest on the utility's own funds used for construction. AFUDC may include the total amount of borrowing during construction.
AFUDC may include the total amount of borrowing during construction.
Which of the following illustrates the appropriate basis of accounting for enterprise and internal service funds? 1. Enterprise Funds 2. Internal Service Funds Modified Accrual - Modified Accrual Modified Accrual - Accrual Accrual - Modified Accrual Accrual - Accrual
Accrual - Accrual
Which of the following would be reflected in the operating statement of a proprietary fund? Accrual of interest expense. Repayment of the principal of debt. Issuance of debt. Purchase of a capital asset.v
Accrual of interest expense.
Pollution remediation obligations should be recognized if which of the following obligating events has occurred? A violation of a pollution prevention permit has occurred. The government is named or will be named as the responsible or potentially responsible party to a remediation. The government is compelled to take remediation action due to imminent endangerment to the public health. All of the above items are obligating events that would require recognition of a pollution remediation obligation.
All of the above items are obligating events that would require recognition of a pollution remediation obligation.
Governments can opt not to capitalize collections or individual works of art or historical treasures if the collection is: Held for public exhibition, education, or research in furtherance of public service rather than for financial gain. Protected, kept unencumbered, cared for, and preserved. Subject to an organizational policy that requires the proceeds from sales of collection items to be used to acquire other items for collections. All of the above.
All of the above.
Which of the following statements is not true for debt service funds? Special assessment debt for which the government has some obligation is paid through the debt service fund. Interest payable may be reported as a liability of the debt service fund. Bond principal is shown as a liability of the debt service fund only when that principal is due and payable. All tax-supported bond principal is shown as a liability of the debt service fund.
All tax-supported bond principal is shown as a liability of the debt service fund.
The liability for general obligation bonds issued for the benefit of a governmentally owned electric utility and serviced by its earnings should be recorded in: An enterprise fund. An enterprise fund and disclosed in the notes to the financial statements. An enterprise fund and the business-like activities accounts. The governmental activities accounts.
An enterprise fund.
An internal service fund normally uses which of the following budgetary accounts? Estimated Revenues. Appropriations. Encumbrances. An internal service fund normally does not use budgetary accounts.
An internal service fund normally does not use budgetary accounts.
Which of the following financial statements are required for a Debt Service Fund? Statement of net position only. Statement of revenues, expenditures, and changes in fund balances only. Balance sheet and statement of revenues, expenditures, and changes in fund balance. Balance sheet, statement of revenues, expenditures, and changes in fund balance, and statement of cash flows.
Balance sheet and statement of revenues, expenditures, and changes in fund balance.
The City of Crescent Hill operates a central motor pool as an internal service fund for the benefit of the city's other funds and departments. In the current year, this fund billed the Parks Department $30,000 for vehicle rentals. What account should the internal service fund use to record these billings? Interfund Transfers In. Interfund Exchanges. Billings to Departments. Cost of Providing Rentals to Other Funds and Units.
Billings to Departments.
How should a capital lease for a general capital asset be recorded in the governmental activities accounts at the inception of the lease? Debit to a capital asset account. Debit to a capital expense/expenditure account. Credit to Capital Lease Obligations Payable. Both A and C are correct.
Both A and C are correct.
A capital projects fund might be used to account for which of the following activities? Maintaining sidewalks. Building a parking garage. Providing water and sewer services. Servicing long-term debt.
Building a parking garage.
Which of the following is not a required disclosure about each major class of capital assets? Beginning-of-year and end-of-year balances showing accumulated depreciation separate from historical cost. Capital acquisitions and sales or other dispositions during the year showing the date and method of acquisition or disposition. Depreciation expense for the current period with disclosure of the amounts charged to each function in the statement of activities. Disclosures describing works of art or historical treasures that are not capitalized and explaining why they are not capitalized.
Capital acquisitions and sales or other dispositions during the year showing the date and method of acquisition or disposition.
When a snowplow purchased by a government is received, it should be recorded in the governmental activities general journal as a(an): Expenditure. Capital asset. Appropriation. Expense.
Capital asset.
In which of the following would it not be appropriate to record depreciation of capital assets? Capital projects fund. Internal service fund. Business-type activities. Governmental activities.
Capital projects fund.
Typically, proceeds from general obligation bonds will be recorded in the: Debt service fund. General obligation bond fund. Permanent fund. Capital projects fund.
Capital projects fund.
Which of the following is not true for capital projects funds? Capital projects funds use a Construction Work in Progress account to record costs until the project is completed. Encumbrance accounting is generally used. Capital projects funds use the modified accrual basis of accounting. Capital projects funds have a project-life focus.
Capital projects funds use a Construction Work in Progress account to record costs until the project is completed.
Which of the following activities or transactions would normally not be accounted for in a capital projects fund? Construction of a new city jail. Construction of airport runways financed by revenue bonds and to be repaid from the revenues of the city airport, an enterprise fund. Lease of a building to be used as a city office building. Construction of a new city park to be maintained primarily from General Fund revenues.
Construction of airport runways financed by revenue bonds and to be repaid from the revenues of the city airport, an enterprise fund.
When part of a progress payment for construction is withheld until final settlement of the contract, what account is credited? Encumbrances. Appropriations. Contracts Payable-Retained Percentage. Construction Expenditures.
Contracts Payable-Retained Percentage.
Goods and services provided by internal service funds to other departments of the government are typically priced to: Cover variable costs only. Cover full costs (both fixed and variable). Cover full costs, plus an additional charge to capital maintenance and anticipated expansion needs. Cover full costs, plus an additional charge to ensure a reasonable profit.
Cover full costs, plus an additional charge to capital maintenance and anticipated expansion needs.
How should a capital lease for a general capital asset be recorded in the General Fund accounts at the inception of the lease? Debit to a capital asset account. Debit to a capital expenditure account. Credit to Capital Lease Obligations Payable. Both A and C are correct.
Debit to a capital expenditure account
Which of the following statements is always true concerning the reporting of debt service funds? Debt service funds are reported in a separate column in the governmental fund financial statements. Debt service funds are reported in a separate column in the government-wide financial statements. Debt service funds are reported in the Other Governmental Funds column in the governmental fund financial statements. Debt service funds are reported in the Governmental Activities column in the government-wide financial statements.
Debt service funds are reported in the Governmental Activities column in the government-wide financial statements.
Premiums received on tax-supported bonds are generally transferred to what fund? Internal service fund. Debt service. General. Special revenue.
Debt service.
Which of the following is true regarding capital projects funds? Encumbrances accounting is employed. Encumbrances accounting is not normally employed, but Appropriations are recorded. No budgetary accounts are ever used. All budgetary accounts are employed and budget to actual statements are prepared.
Encumbrances accounting is employed.
Which of the following items is not required to be included in the segment information that must be reported for a municipality's enterprise funds? Enterprise fund capital assets. Enterprise fund operating income or loss. Enterprise fund tax revenues. Intergovernmental operating subsidies to an enterprise fund.
Enterprise fund tax revenues.
Customers' meter deposits, which cannot be spent for normal operating purposes, would be classified as restricted cash in the balance sheet of which fund type? Internal service fund. Private-purpose trust fund. Enterprise fund. Special revenue fund.
Enterprise fund.
The Central City Golf Course, an enterprise fund, purchased a new stove for use in the course's snack shop. The debit for the entry to record the purchase should be to: Expenditures. Purchases. Equipment. General capital assets.
Equipment.
Which of the following assets would not be found in the balance sheet of a debt service fund? Cash with fiscal agent. Investments. Equipment. Interest Receivable.
Equipment.
On the due date for bond interest, the debt service fund journal entry (or entries) will include a debit to: Expenditures-Bond Interest. Interfund Transfers In. Appropriations. Interest Expense.
Expenditures-Bond Interest.
The City of Crescent Hill operates a central motor pool as an internal service fund for the benefit of the city's other funds and departments. In the current year, this fund billed the Parks Department $30,000 for vehicle rentals. If the Parks Department is a governmental fund, which account should the Parks Department use to record these billings? Interfund Transfers In. Interfund Exchanges. Expenditures. Cost of Rentals from Other Funds and Units.
Expenditures.
Which of the following statements regarding capital assets is not true? Proprietary funds routinely account for capital assets used in their operations within the fund financial statements. Fiduciary funds do not account for property, plant, and equipment within the fund financial statements. Because governmental funds account only for current financial resources, these funds do not record capital assets acquired by the funds. General capital assets purchased or constructed with governmental fund resources are recorded in the governmental activities general ledger at the government-wide level.
Fiduciary funds do not account for property, plant, and equipment within the fund financial statements.
Which of the following debt service fund accounts would not be closed at the end of each fiscal year? Estimated Revenues. Fund Balance. Revenues. Expenditures—Bond Interest.
Fund Balance.
Which of the following accounts would appropriately be included on an enterprise fund balance sheet? Fund Balance: No; Net Position—Unrestricted: Yes. Fund Balance: Yes; Net Position—Unrestricted: No. Fund Balance: No; Net Position—Unrestricted: No. Fund Balance: Yes; Net Position—Unrestricted: Yes.
Fund Balance: No; Net Position—Unrestricted: Yes.
A general capital asset constructed several years ago by a capital projects fund was sold by the General Fund. Entries are necessary in the: General Fund only. General Fund and the capital projects fund. General Fund and governmental activities. Governmental activities only.
General Fund and governmental activities.
Four new computers, for which the cost exceeded the city's capitalization threshold, were purchased for use in the city clerk's office using General Fund resources. Which of the following entries would be required to completely record this transaction? General Journal Debit Credit General Fund: Expenditures 8,000 Vouchers Payable 8,000 ________________________________________________________ General Journal Debit Credit Governmental Activities: Expenses 8,000 Vouchers Payable 8,000 ________________________________________________________ General Journal Debit Credit General Fund: Expenditures 8,000 Vouchers Payable 8,000 Governmental Activities: Expenses 8,000 Vouchers Payable 8,000 ________________________________________________________ General Journal Debit Credit General Fund: Expenditures 8,000 Vouchers Payable 8,000 Governmental Activities: Equipment 8,000 Vouchers Payable 8,000
General Journal Debit Credit General Fund: Expenditures 8,000 Vouchers Payable 8,000 Governmental Activities: Equipment 8,000 Vouchers Payable 8,000
The liability for general obligation bonds should be recorded in the: General Fund. Capital projects fund. Governmental activities journal. Debt service fund.
Governmental activities journal.
A debt service fund is a: Nonexpendable fund. Governmental fund. Fiduciary fund. Proprietary fund.
Governmental fund.
The sale of revenue bonds by a water utility fund would be recorded: In the governmental activities column as a liability. In an enterprise fund as "Proceeds of Bonds." In an enterprise fund as a liability. In an enterprise fund as a revenue.
In an enterprise fund as a liability.
Which of the following statements is correct concerning interest expenditures incurred during the period of construction of capital projects? Interest expenditures may not be capitalized as part of the cost of general capital assets reported in governmental activities. Interest expenditures may be capitalized as part of the cost of general capital assets reported in the governmental activities accounts at the government-wide level. Interest expenditures must be capitalized as part of the cost of general capital assets reported in the capital projects fund. The capitalization of interest expenditures as part of the cost of general capital assets reported in the capital projects fund is optional.
Interest expenditures may not be capitalized as part of the cost of general capital assets reported in governmental activities.
When a new internal service fund is established with a transfer of funds (not to be repaid), which account would be credited in the internal service fund? Cash. Interfund Transfer In. Interfund Transfer Out. Estimated Revenues.
Interfund Transfer In.
In which of the following funds is it appropriate to record depreciation of capital assets? Internal service fund. Permanent fund. General fund. Capital projects fund.
Internal service fund.
Which of the following funds of a government uses the same basis of accounting as a proprietary fund? Permanent fund. Investment trust fund. Special revenue fund. Capital projects fund.
Investment trust fund.
When bonds are sold at a premium for a capital project, the premium amount generally: Increases the cash available to the capital projects fund. Is transferred to the debt service fund. Is applied against the principal balance by the fiduciary agent. Is recorded in a fiduciary fund since it does not belong to the capital projects fund.
Is transferred to the debt service fund.
Which of the following activities or services would most likely not be accounted for by an internal service fund? Electronic data processing. Central purchasing, warehousing, and issuing of supplies. Municipal swimming pool. Risk management.
Municipal swimming pool.
Which of the following properly portrays the components of net position for proprietary funds? Net investment in capital assets, Restricted, Unrestricted. Net investment in capital assets, Reserved, Unreserved. Contributed capital, Net investment in capital assets, Reserved, Unreserved. Designated, Undesignated, Restricted, Unrestricted.
Net investment in capital assets, Restricted, Unrestricted.
Which of the following basic financial statements contains a column for the total of all debt service funds? Statement of cash flows. Statement of revenues, expenditures, and changes in governmental fund balances. Statement of revenues, expenses, and changes in proprietary net position. No basic financial statement contains a column for the total of all debt service funds.
No basic financial statement contains a column for the total of all debt service funds.
Which of the following statements is correct regarding depreciation? Depreciation expense should be recorded in the appropriate governmental funds, and recorded in the governmental activities accounts. Depreciation expense must be recorded in the governmental fund, but no depreciation expense is recorded in the governmental activities accounts. No depreciation can be recorded in any governmental fund, but depreciation expense must be recorded in the governmental activities accounts. No depreciation can be recorded in any governmental fund, nor is it permissible to record depreciation expense in the governmental activities accounts.
No depreciation can be recorded in any governmental fund, but depreciation expense must be recorded in the governmental activities accounts.
Transfers from the General Fund to the capital projects fund to provide partial financing of a capital project would be reported by the capital projects fund as a(an): Fund balance addition. Revenue. Other financing source. Current liability.
Other financing source.
Debt service funds are used to account for which of the following? Payment of only interest on general long-term debt. Payment of only principal on general long-term debt. Payment of principal and interest on general long-term debt. Payment of principal and interest on all debt of the government.
Payment of principal and interest on general long-term debt.
The comprehensive annual financial report (CAFR) of a government should contain a statement of revenues, expenses, and changes in fund net position for: Both proprietary and governmental funds. Proprietary but not governmental funds. Governmental but not proprietary funds. Proprietary and fiduciary funds.
Proprietary but not governmental funds.
When the debt service fund makes a payment of principal and interest on an outstanding long-term debt, the governmental activities accounts: Reflect the principal payment only. Reflect the interest payment only. Have no record of the transaction. Reflect both principal and interest payments.
Reflect both principal and interest payments.
Which of the following may properly be reported as a component of net position in the proprietary fund statement of net position? Retained earnings. Designated equity. Restricted net position. Contributed capital.
Restricted net position.
Under GASB standards, an internal service fund should prepare all of the following financial statements except a: Statement of revenues, expenditures, and changes in fund balance. Statement of revenues, expenses, and changes in net position. Statement of net position. Statement of cash flows.
Statement of revenues, expenditures, and changes in fund balance.
Which of the following debt service funds would normally have the largest balance in its Fund Balance account? Serial bond debt service fund. Deferred serial bond debt service fund. Irregular serial bond debt service fund. Term bond debt service fund.
Term bond debt service fund.
Which of the following organizations or units would least likely be accounted for by an enterprise fund? A golf course. An airport. The computer department. A sports stadium.
The computer department.
Which of the following is a difference between enterprise funds and internal service funds? The use of cost accounting by enterprise funds but not internal service funds. The customers who primarily benefit from the fund's service. The number of fund financial statements required. The measurement focus on economic resources for enterprise funds and current financial resources for internal service funds.
The customers who primarily benefit from the fund's service.
Which of the following is not true regarding proprietary funds? The difference between assets plus deferred outflows of resources and liabilities plus deferred inflows of resources of proprietary funds is called "net assets." Proprietary funds record long-term debt directly in the fund accounts. Proprietary funds record capital assets directly in the fund accounts. Proprietary funds present a statement of cash flows.
The difference between assets plus deferred outflows of resources and liabilities plus deferred inflows of resources of proprietary funds is called "net assets."
Under utility regulatory accounting principles (RAP), the account "Utility Plant Acquisition Adjustment" reflects: The difference between the amount paid for utility plant and the amount originally paid by the utility that first placed the plant into public service, less accumulated depreciation. The difference between the fair market value of the utility plant and the amount paid for it, less accumulated depreciation. The difference between the amount paid for the utility plant less its current replacement cost. The difference between the amount paid for the utility plant less the fair market value of its tangible plant assets.
The difference between the amount paid for utility plant and the amount originally paid by the utility that first placed the plant into public service, less accumulated depreciation.
Which of the following is not a requirement that must be met to elect the "modified approach" to reporting certain eligible infrastructure assets? The government gets the permission of the Government Accounting Standards Board. The government documents that the eligible infrastructure assets are being preserved approximately at (or above) the condition level established and disclosed. The government manages the assets using an asset management system that includes condition assessments of the assets and summary of results using a measurement scale. The government manages the assets using an asset management system that includes estimates each year of the annual amount needed to maintain and preserve the eligible assets at the condition level established and disclosed by the government.
The government gets the permission of the Government Accounting Standards Board.
Which of the following is a true statement regarding in-substance defeasance of bonds? The government must place cash or other assets in an irrevocable trust sufficient to pay all future interest and principal payments for the debt being defeased. The government must agree to maintain sufficient cash and investment balances in its debt service fund to cover all interest and principal payments for the debt being defeased. The government must pledge to transfer amounts to an escrow agent prior to the due date for each interest and principal payment for the debt being defeased. The government must agree to maintain sufficient unrestricted cash and investments in its governmental funds to cover all interest and principal payments for the debt being defeased.
The government must place cash or other assets in an irrevocable trust sufficient to pay all future interest and principal payments for the debt being defeased.
The liability for special assessment bonds that carry a secondary pledge of a city's general credit should be reported in the balance sheet(s) of: A debt service fund. An agency fund. The governmental activities accounts. An agency fund and disclosed in the notes to the financial statements.
The governmental activities accounts.
Capital assets used by governmental funds should be reported in: The appropriate governmental funds. The property, plant, and equipment fund. Departmental memorandum records. The governmental activities column of the government-wide statements.
The governmental activities column of the government-wide statements.
Internal service funds should be used only if: The reporting government funds the activity with general obligation debt. The reporting government provides services primarily to external participants. The reporting government provides services primarily to other departments of the same government. The reporting government provides services below full cost.
The reporting government provides services primarily to other departments of the same government.
How should financial information for internal service funds be reported in the government-wide financial statements? As part of governmental activities. As part of business-type activities. Amounts allocated proportionately between governmental and business-type activities. Usually as part of governmental activities, unless the internal service fund predominantly serves one or more enterprise funds.
Usually as part of governmental activities, unless the internal service fund predominantly serves one or more enterprise funds.
Which of the following account balances would only be reported if a city-owned utility followed regulatory accounting principles? Depreciation expense. Pumping expense. Restricted Assets-Cash. Utility Plant Acquisition Adjustments.
Utility Plant Acquisition Adjustments
Special assessments levied for debt service of bonds issued for a special assessment capital project will be accounted for by a debt service fund under which of the following situations? Government is secondarily Government is not secondarily obligated for the debt obligated for the debt 1. Government is secondarily obligated for the debt 2. Government is not secondarily obligated for the debt 1. 2. Yes Yes Yes No No Yes No No
Yes No
