Exam 5: Accounting for General Capital Assets and Capital Projects

The city of Columbus 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?

"Capital projects funds are established by a government to account for all plant or equipment acquired by construction." Do you agree? Why or why not?

When a government transfers the rights and obligations of an asset to another legally separate governmental or private sector entity,the transaction is referred to as

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

At the government-wide level,net position related to capital assets should be reported as

Which of the following is a true statement about governments that issue tax-supported debt to finance capital projects?

The following general capital assets were owned by the town of Otterville: What amount should be recorded as capital assets in the town's governmental activities accounts if Otterville follows GASB standards?

Equipment acquired several years ago by a capital projects fund and recorded in the governmental activities general journal was sold.The cash received was considered to be unrestricted revenue.Entries are necessary in the

Even though the life of a capital projects fund is the life of the project,not year-to-year,operating statement accounts should be closed at year-end to facilitate preparation of year-end financial statements.

A city recorded an asset impairment to a Public Works facility.Which of the following is correct concerning the recording of the amount of the asset impairment?

"Infrastructure assets (e.g.,roads,bridges,curbs and gutters,streets,etc.)need not be capitalized since they are immovable and not likely to be stolen." Do you agree or disagree? Explain your answer.

Which of the following funds of a government uses the modified accrual basis of accounting?

Discuss the required disclosures for capital assets in a government's notes to the financial statements.

If a bond sale occurs between interest dates,accrued interest sold should be credited to Proceeds of Bonds.

At the time a bond issue is legally authorized it is usual practice to make either no entry or a memorandum entry in the capital projects fund general journal.

Depreciation of general capital assets for the period should be reported in the operating statement for governmental activities at the government-wide level.

Which of the following is one of the requirements that must be met to elect the "modified approach" to reporting certain eligible infrastructure assets?

The city of Palisades purchased a squad car for the police department.If the operations of the police department are financed by general revenues,which of the following is correct concerning where the purchase of the car would be recorded?

At the start of a capital lease the journal entry required in the capital projects fund will include which of the following?

One of the common objections to computing depreciation of general capital assets has been that the assets are used for activities that are not expected to generate revenues sufficient to replace the assets; therefore,depreciation expense is not relevant to decisions about the acquisition or use of general capital assets.Evaluate this argument.