Question 1

Encumbrance accounting is typically used for Permanent Funds.

Accepted Answer

A) True 
 B)False

Question 2

If a sinking fund is required by creditors or law,the unexpended resources would be classified as Restricted Fund Balance.

Accepted Answer

A) True 
 B)False

Question 3

Use the following to answer the next six questions:
During the fiscal year ended December 31, 2014, the City of Johnstown issued 6% general obligation serial bonds in the amount of $3,000,000 at 102 ($3,060,000) and used $2,970,000 of the proceeds to construct a fire station. The $60,000 premium was transferred to a debt service fund. The $30,000 left in the capital projects fund at the end of the project was later transferred to the debt service fund. The bonds were dated April 1, 2014 and paid interest on October 1 and April 1. The first of 10 equal annual principal payments was due on April 1, 2015.
-The amount of capital outlay expenditures reported by the capital projects fund would be:

Accepted Answer

A)  $3,090,000. 
B)  $3,000,000. 
C)  $2,970,000. 
D)  $3,060,000. 
A)  $3,090,000. 
B)  $3,000,000. 
C)  $2,970,000. 
D)  $3,060,000.

Question 4

On 9/1/2014 Birmingham County sold bonds at par value in the amount of $12,000,000 to finance construction of a new library.On 10/10/2014 Hills County entered into a contract with a private contractor to build a new library building in the amount of $11,000,000.On 12/1/2014,when the contract was half finished,the contractor submitted a bill for $5,500,000.The bill was paid on 12/15/2014 less Hills' standard 5% retention to assure any construction deficiencies are corrected.Hills County operates on a Dec.31 fiscal year.
Required:
 Prepare the journal entries required in the Capital Projects Fund for the above transactions.

Accepted Answer

The answer of On 9/1/2014 Birmingham County sold bonds at...

Question 5

Use the following to answer the next five questions:
On October 1, 2013, the City of Mizner issued $3,500,000 in 4%, general obligation bonds at 101 for the purpose of constructing an addition to City Hall. The premium was transferred to a debt service fund. A total of $3,475,000 was used to construct the addition, which was completed prior to June 30, 2014. The remaining funds were transferred to the debt service fund. The bonds were dated October 1, 2013, and paid interest on April 1 and October 1. The first of 20 annual principal payments of $175,000 is due October 1, 2014. The fiscal year for Mizner is July 1- June 30.
-What would be the amount of debt service expenditures reported in the fiscal year ended June 30,2015?

Accepted Answer

A)  $140,000. 
B)  $175,000. 
C)  $315,000. 
D)  $345,625. 
A)  $140,000. 
B)  $175,000. 
C)  $315,000. 
D)  $345,625.

Question 6

Capital project funds

Accepted Answer

A)  Receive all of their money from tax revenues. 
B)  Exist only for the duration of the project for which they are created. 
C)  Record debt issuances as revenues. 
D)  all of the above. 
A)  Receive all of their money from tax revenues. 
B)  Exist only for the duration of the project for which they are created. 
C)  Record debt issuances as revenues. 
D)  all of the above.

Question 7

A Special Projects Fund is a fund type that is used to account for revenues and other financing sources that are intended to service debt.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is a major source of funding for capital projects funds?

Accepted Answer

A)  Gifts from individuals and corporations. 
B)  Proceeds from issuance of Long-term debt. 
C)  Grants. 
D)  All of the above. 
A)  Gifts from individuals and corporations. 
B)  Proceeds from issuance of Long-term debt. 
C)  Grants. 
D)  All of the above.

Question 9

Unexpended resources transferred to the debt service fund from the General Fund would typically be classified as Restricted Fund Balance.

Accepted Answer

A) True 
 B)False

Question 10

Debt service funds use the same measurement focus and basis of accounting as:

Accepted Answer

A)  Special revenue funds. 
B)  Internal service funds. 
C)  Both (a) and (b). 
D)  None of the above. 
A)  Special revenue funds. 
B)  Internal service funds. 
C)  Both (a) and (b). 
D)  None of the above.

Question 11

Positive fund balances of capital projects funds are classified as restricted,committed assigned or unassigned.

Accepted Answer

A) True 
 B)False

Question 12

Use the following to answer the next five questions:
On October 1, 2013, the City of Mizner issued $3,500,000 in 4%, general obligation bonds at 101 for the purpose of constructing an addition to City Hall. The premium was transferred to a debt service fund. A total of $3,475,000 was used to construct the addition, which was completed prior to June 30, 2014. The remaining funds were transferred to the debt service fund. The bonds were dated October 1, 2013, and paid interest on April 1 and October 1. The first of 20 annual principal payments of $175,000 is due October 1, 2014. The fiscal year for Mizner is July 1- June 30.
-In addition to a $3,500,000 liability in the government-wide Statement of Net Assets,how would the bond sale be reported?

Accepted Answer

A)  As a $3,535,000 other financing source in the capital projects fund, a $35,000 other financing use in the capital projects fund, a $35,000 other financing source in the debt service fund. 
B)  As a $3,500,000 other financing source in the capital projects fund, a $35,000 other financing source in the debt service fund, and as a $3,500,000 liability in the debt service fund. 
C)  As a $3,500,000 revenue in the capital projects fund, a $35,000 revenue in the debt service fund, and a $3,500,000 expenditure in the debt service fund. 
D)  As a $3,475,000 revenue in the capital projects fund and a $25,000 revenue in the debt service fund. 
A)  As a $3,535,000 other financing source in the capital projects fund, a $35,000 other financing use in the capital projects fund, a $35,000 other financing source in the debt service fund. 
B)  As a $3,500,000 other financing source in the capital projects fund, a $35,000 other financing source in the debt service fund, and as a $3,500,000 liability in the debt service fund. 
C)  As a $3,500,000 revenue in the capital projects fund, a $35,000 revenue in the debt service fund, and a $3,500,000 expenditure in the debt service fund. 
D)  As a $3,475,000 revenue in the capital projects fund and a $25,000 revenue in the debt service fund.

Question 13

Budgets are typically recorded for which of the following:

Accepted Answer

A)  Capital Projects Funds. 
B)  Special Revenue Funds. 
C)  Debt Service Funds. 
D)  None of the above 
A)  Capital Projects Funds. 
B)  Special Revenue Funds. 
C)  Debt Service Funds. 
D)  None of the above

Question 14

Encumbrance accounting is only typically used for

Accepted Answer

A)  Permanent Funds. 
B)  Debt Service Funds. 
C)  Capital Projects Funds. 
D)  None of the above. 
A)  Permanent Funds. 
B)  Debt Service Funds. 
C)  Capital Projects Funds. 
D)  None of the above.

Question 15

On January 1,2014,the Town of Walton issued $ 5,000,000 of 4% tax supported bonds.The bonds are dated January 1,2014 with interest payment dates of June 30 and December 31.The first of 10 annual principal payments is due on December 31,2014.The bonds were sold at a $48,000 premium that was transferred to the Debt Service Fund from the capital projects fund to be used to fund the first payment.Cash sufficient to cover interest and principal payments for the year less the premium is transferred from the General Fund on June 1st.
Required:
 Record any and all entries to be made by the Debt Service Fund for the bond issued for the year 2014 (including closing entries)

Accepted Answer

The answer of On January 1,2014,the Town of Walton issued...

Question 16

Which of the following is true regarding accounting for investments of permanent funds?

Accepted Answer

A)  Investments with determinable fair values must be reported at fair value. 
B)  Gains and losses on investments would not be reported in the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances but are reported in the government-wide Statement of Activities 
C)  Both of the above are true. 
D)  Neither of the above is true 
A)  Investments with determinable fair values must be reported at fair value. 
B)  Gains and losses on investments would not be reported in the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances but are reported in the government-wide Statement of Activities 
C)  Both of the above are true. 
D)  Neither of the above is true

Question 17

Which of the following is true with respect to special assessment levies?

Accepted Answer

A)  Taxpayers may opt out of a service-type special assessment if they agree to not use the service funded by the assessment 
B)  Service-type special assessments may not be accounted for in the General or special revenue fund. 
C)  Construction-type special assessments are accumulated until there is enough money to finance the construction project 
D)  If the government is not liable for the special assessment debt directly or through guarantee, the special assessment is accounted for in an agency fund 
A)  Taxpayers may opt out of a service-type special assessment if they agree to not use the service funded by the assessment 
B)  Service-type special assessments may not be accounted for in the General or special revenue fund. 
C)  Construction-type special assessments are accumulated until there is enough money to finance the construction project 
D)  If the government is not liable for the special assessment debt directly or through guarantee, the special assessment is accounted for in an agency fund

Question 18

Which of the following statements is false?

Accepted Answer

A)  Debt service funds are required to report accrued interest payable as current liabilities. 
B)  All of the governmental funds use the modified accrual basis of accounting 
C)  General fixed assets that are acquired with governmental fund resources are recorded as expenditures in the governmental funds but are displayed as capital assets in the governmental-wide financial statements 
D)  Permanent funds reflect resources that are legally restricted so that principal may not be expended and earnings are used to benefit the government or its citizenry 
A)  Debt service funds are required to report accrued interest payable as current liabilities. 
B)  All of the governmental funds use the modified accrual basis of accounting 
C)  General fixed assets that are acquired with governmental fund resources are recorded as expenditures in the governmental funds but are displayed as capital assets in the governmental-wide financial statements 
D)  Permanent funds reflect resources that are legally restricted so that principal may not be expended and earnings are used to benefit the government or its citizenry

Question 19

Capital project funds record the proceeds of debt issued as:

Accepted Answer

A)  Revenues. 
B)  Other Financing Sources. 
C)  Expenses. 
D)  Liabilities. 
A)  Revenues. 
B)  Other Financing Sources. 
C)  Expenses. 
D)  Liabilities.

Question 20

What is a bond refunding and why do governments refund bonds?

Accepted Answer

A Bond refunding is issuing new debt to

Encumbrance accounting is typically used for Permanent Funds.

If a sinking fund is required by creditors or law,the unexpended resources would be classified as Restricted Fund Balance.

Capital project funds

A Special Projects Fund is a fund type that is used to account for revenues and other financing sources that are intended to service debt.

Which of the following is a major source of funding for capital projects funds?

Unexpended resources transferred to the debt service fund from the General Fund would typically be classified as Restricted Fund Balance.

Debt service funds use the same measurement focus and basis of accounting as:

Positive fund balances of capital projects funds are classified as restricted,committed assigned or unassigned.

Budgets are typically recorded for which of the following:

Encumbrance accounting is only typically used for

Which of the following is true regarding accounting for investments of permanent funds?

Which of the following is true with respect to special assessment levies?

Which of the following statements is false?

Capital project funds record the proceeds of debt issued as:

What is a bond refunding and why do governments refund bonds?

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Organizations

Overview of Financial Reporting for State and Local Governments

Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority

Accounting for the General and Special Revenue Funds

Proprietary Funds

Fiduciary Trustfunds

Government-Wide Statements, Capital Assets, Long-Term Debt

Accounting for Special-Purpose Entities, Including Public Colleges and Universities

Accounting for Private Not-For-Profit Organizations

College and University Accounting Private Institutions

Accounting for Hospitals and Other Health Care Providers

Auditing, Tax-Exempt Organizations, and Evaluating Performance

Financial Reporting by the Federal Government

Filters

Exam 5: Accounting for Other Governmental Fund Types: Capital Projects, Debt Service, and Permanent

Encumbrance accounting is typically used for Permanent Funds.

If a sinking fund is required by creditors or law,the unexpended resources would be classified as Restricted Fund Balance.

Capital project funds

A Special Projects Fund is a fund type that is used to account for revenues and other financing sources that are intended to service debt.

Which of the following is a major source of funding for capital projects funds?

Unexpended resources transferred to the debt service fund from the General Fund would typically be classified as Restricted Fund Balance.

Debt service funds use the same measurement focus and basis of accounting as:

Positive fund balances of capital projects funds are classified as restricted,committed assigned or unassigned.

Budgets are typically recorded for which of the following:

Encumbrance accounting is only typically used for

Which of the following is true regarding accounting for investments of permanent funds?

Which of the following is true with respect to special assessment levies?

Which of the following statements is false?

Capital project funds record the proceeds of debt issued as:

What is a bond refunding and why do governments refund bonds?

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Organizations

Overview of Financial Reporting for State and Local Governments

Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority

Accounting for the General and Special Revenue Funds

Proprietary Funds

Fiduciary Trustfunds

Government-Wide Statements, Capital Assets, Long-Term Debt

Accounting for Special-Purpose Entities, Including Public Colleges and Universities

Accounting for Private Not-For-Profit Organizations

College and University Accounting Private Institutions

Accounting for Hospitals and Other Health Care Providers

Auditing, Tax-Exempt Organizations, and Evaluating Performance

Financial Reporting by the Federal Government

Filters