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

At the inception of a capital lease agreement for a piece of equipment used in governmental operations,

An encumbrance in a capital project fund is created

A special assessment tax is

When taxes and/or special assessments are levied specifically for payment of interest and principal on long-term debt,those taxes are recognized:

A non-expendable trust which benefits a government or its citizenry and which stipulates that earnings only (not principal)may be used for its provided purpose should be reported in a:

When accounting for interest expenditures through debt service funds,interest is normally recorded as an expenditure when due and payable; it is not required to be accrued at year-end.

A non-expendable trust which benefits a government or its citizenry and which stipulates that earnings only (not principal)may be used for its prescribed purpose would be reported in a Special Revenue Fund.

Grant proceeds received from the state for a capital project would be recorded in a capital projects fund of a city government as a (an):

If the government is primarily or secondarily liable for the payment of debt principal and interest for a special assessment project,:

Where should a government report special assessment debt that the government is not liable for in any way?

The General Fund is always considered to be a major fund.When are other governmental funds considered major?

Bond refunding is repurchasing bonds from bondholders using residual money left over after a capital project has been completed.

If taxes are levied specifically for payment of interest and principal on long-term debt,those taxes are:

General Funds and special revenue funds typically record budgets.

Use the following to answer the next four questions: On April 1, 2014, the City of Southern Ponds issued $4,000,000 in 4% general obligation, tax supported bonds at 101 for the purpose of constructing a new police station. The premium was transferred to a debt service fund. A total of $3,990,000 was used to construct the police station, which was completed before December 31, 2014, the end of the fiscal year. The remaining funds were 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 20 equal annual principal payments of $200,000 is due April 1, 2015. -What amount would be reported as debt service expenditures for 2014?

If bonds issued to fund a capital project are sold at a premium,the additional money received is:

Capital projects funds use the financial resources measurement focus and accrual basis of accounting.

A special assessment tax is assessed against all tax payers regardless of who benefits.

If taxes and/or special assessments are levied by the General Fund,and then are subsequently transferred to the debt service fund,they are:

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. -How would the bond sale be recorded?