Exam 5: Accounting for General Capital Assets and Capital Projects

Proceeds of debt issued for the construction or acquisition of capital assets are recognized by the capital projects fund as "other financing sources" and as a liability in the governmental activities journal.

Under a service concession arrangement, a government transfers the rights and obligations of an asset to another legally separate government or private sector entity.

A general capital asset constructed several years ago by a capital projects fund was sold by the General Fund. Entries are necessary in the:

How should a lease for a general capital asset be recorded in the General Fund accounts at the inception of the lease?

Historical cost includes acquisition cost less any ancillary costs necessary to put the asset into use.

When part of a progress payment for construction is withheld until final settlement of the contract, what account is credited?

Under the modified approach, what happens if infrastructure assets are not maintained at or above the established condition level?

General capital assets should be distinguished from capital assets that are specifically associated with activities financed by proprietary and fiduciary funds, since capital assets acquired by proprietary and fiduciary funds are accounted for by those funds.

General capital assets purchased or constructed with governmental fund resources are recorded in the governmental activities general ledger at the government-wide level.

One of the required general capital asset disclosures is a schedule of the additions to, and deductions from, general capital assets during the course of a fiscal year.

During the year, a wealthy local merchant donated a building to the city of Rosewood. The original cost of the building was $300,000. Accumulated depreciation at the date of the gift amounted to $250,000. The appraised fair market value of the donation at the date of the gift was $600,000. At what amount should Rosewood record this donated property in the General Fund?

What is the difference between using the modified approach to accounting for infrastructure assets and depreciating infrastructure assets?

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. Construction expenditures should be debited when:

The City of Castle Rock issued bonds at par for the construction of a new city office building. Receipt of the bond proceeds would result in journal entries in which funds?

Which of the following is True regarding capital projects funds?

General capital assets financed wholly or partially through collections of special assessments are recorded in the same manner as any other general capital assets in the governmental activities category at the government-wide level.

Acquisition of a general capital asset represents an expenditure in a governmental fund, but requires capitalization of an asset at the government-wide level.

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):

Which of the following is not a required disclosure about each major class of capital assets?

Equipment that had been acquired several years ago by a special revenue fund at a cost of $40,000 was sold for $15,000 cash. Accumulated depreciation of $30,000 existed at the time of the sale. The journal entry to be made in the governmental activities journal will include all of the following except: