Question 1

Private-purpose Trust Funds benefit individuals,private organizations,or other governments.

Accepted Answer

A) True 
 B)False

Question 2

Capital Projects funds recognize expenses,but not encumbrances.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

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

Question 4

Use the following to answer the next six questions:
During the fiscal year ended December 31, 2015, the City of Johnstown issued 6% general obligation serial bonds in the amount of $2,000,000 at 102 ($2,040,000) and used $1,980,000 of the proceeds to construct a fire station. The $40,000 premium was transferred to a debt service fund. The $20,000 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, 2015 and paid interest on October 1 and April 1. The first of 10 equal annual principal payments was due on April 1, 2016.
-How would the government account for the transfer of the unused bond proceeds?

Accepted Answer

A)  As a revenue in the debt service fund and as an expenditure in the capital projects fund. 
B)  As an other financing source in the capital projects fund and as an other financing use in the debt service fund. 
C)  As an other financing source in the debt service fund and as an other financing use in the capital projects fund. 
D)  As a special item in both the debt service and capital project funds. 
A)  As a revenue in the debt service fund and as an expenditure in the capital projects fund. 
B)  As an other financing source in the capital projects fund and as an other financing use in the debt service fund. 
C)  As an other financing source in the debt service fund and as an other financing use in the capital projects fund. 
D)  As a special item in both the debt service and capital project funds.

Question 5

The portion of a permanent fund which is spendable should be reported as Unassigned Fund Balance.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A)  Recorded as revenues of the debt service fund. 
B)  Included as transfers out in the General Fund but are not as revenue in that fund. 
C)  Included in the revenues of the General Fund and are also reported by the General Fund as transfers out to the debt service fund. 
D)  Recorded as an expense and voucher payable by the General Fund and are recorded as a revenue and receivable by the debt service fund. 
A)  Recorded as revenues of the debt service fund. 
B)  Included as transfers out in the General Fund but are not as revenue in that fund. 
C)  Included in the revenues of the General Fund and are also reported by the General Fund as transfers out to the debt service fund. 
D)  Recorded as an expense and voucher payable by the General Fund and are recorded as a revenue and receivable by the debt service fund.

Question 7

If a government issues new debt,and places the proceeds in an escrow account pending the maturity date of existing debt,the existing debt is said to be defeased.

Accepted Answer

A) True 
 B)False

Question 8

The principal of permanent funds must be classified as Restricted Fund Balance.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A Bond refunding is issuing new debt to

Question 10

When accounting for interest expenditures through debt service funds,interest is required to be accrued at year-end.

Accepted Answer

A) True 
 B)False

Question 11

Use the following to answer the next four questions:
On April 1, 2015, the City of Southern Ponds issued $3,500,000 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 $3,490,000 was used to construct the police station, which was completed before December 31, 2015, the end of the fiscal year. The remaining funds were transferred to the debt service fund. The bonds were dated April 1, 2015, and paid interest on October 1 and April 1. The first of 20 equal annual principal payments of $175,000 is due April 1, 2016.
-In addition to reporting a $3,500,000 liability and a $35,000 bond premium in the government-wide Statement of Net Position,how would the bond sale be reported?

Accepted Answer

A)  As a $3,500,000 liability in the government-wide Statement of Net Position and as a $3,500,000 other financing source in the debt service fund. 
B)  As a $3,535,000 liability in the government-wide Statement of Net Position, as a liability of $ 3,535,000 in the capital projects fund, and as an other financing source of $3,535,000 in the capital projects fund. 
C)  A $3,535,000 other financing source in the capital projects fund, a $35,000 other financing use in the capital projects fund, and a $35,000 other financing source in the debt service fund. 
D)  The $3,500,000 liability in the government-wide Statement of Net Position and the $35,000 would also be recorded as a bond premium in the Statement of Net Position. 
A)  As a $3,500,000 liability in the government-wide Statement of Net Position and as a $3,500,000 other financing source in the debt service fund. 
B)  As a $3,535,000 liability in the government-wide Statement of Net Position, as a liability of $ 3,535,000 in the capital projects fund, and as an other financing source of $3,535,000 in the capital projects fund. 
C)  A $3,535,000 other financing source in the capital projects fund, a $35,000 other financing use in the capital projects fund, and a $35,000 other financing source in the debt service fund. 
D)  The $3,500,000 liability in the government-wide Statement of Net Position and the $35,000 would also be recorded as a bond premium in the Statement of Net Position.

Question 12

An annuity serial bond is one where the amount of the principal increases each year by the same amount that the interest payments decrease.

Accepted Answer

A) True 
 B)False

Question 13

Premiums generated from the issuance of bonds for a capital projects fund are generally:

Accepted Answer

A)  Transferred to the General Fund. 
B)  Retained in the capital projects fund. 
C)  Transferred to the debt service fund. 
D)  None of the above. 
A)  Transferred to the General Fund. 
B)  Retained in the capital projects fund. 
C)  Transferred to the debt service fund. 
D)  None of the above.

Question 14

Which of the following statements is true?

Accepted Answer

A)  Fund balances of debt service funds are classified as Restricted and Unrestricted. 
B)  The fund balance of permanent funds should be classified as Nonspendable, Spendable and Committed. 
C)  The principal of permanent funds are classified as Nonspendable Fund Balance. 
D)  Any governmental fund may have an Unassigned Fund Balance 
A)  Fund balances of debt service funds are classified as Restricted and Unrestricted. 
B)  The fund balance of permanent funds should be classified as Nonspendable, Spendable and Committed. 
C)  The principal of permanent funds are classified as Nonspendable Fund Balance. 
D)  Any governmental fund may have an Unassigned Fund Balance

Question 15

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.

Accepted Answer

A) True 
 B)False

Question 16

A Debt Service 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 17

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 18

Fixed assets of completed projects are recorded in the accounts of capital projects funds.

Accepted Answer

A) True 
 B)False

Question 19

General Funds and special revenue funds typically record budgets.

Accepted Answer

A) True 
 B)False

Question 20

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:

Accepted Answer

A)  Permanent Fund. 
B)  Special Revenue Fund. 
C)  Private-purpose Trust Fund. 
D)  None of the Above. 
A)  Permanent Fund. 
B)  Special Revenue Fund. 
C)  Private-purpose Trust Fund. 
D)  None of the Above.

Private-purpose Trust Funds benefit individuals,private organizations,or other governments.

Capital Projects funds recognize expenses,but not encumbrances.

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

The portion of a permanent fund which is spendable should be reported as Unassigned Fund Balance.

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

If a government issues new debt,and places the proceeds in an escrow account pending the maturity date of existing debt,the existing debt is said to be defeased.

The principal of permanent funds must be classified as Restricted Fund Balance.

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

When accounting for interest expenditures through debt service funds,interest is required to be accrued at year-end.

An annuity serial bond is one where the amount of the principal increases each year by the same amount that the interest payments decrease.

Premiums generated from the issuance of bonds for a capital projects fund are generally:

Which of the following statements is true?

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.

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

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

Fixed assets of completed projects are recorded in the accounts of capital projects funds.

General Funds and special revenue funds typically record budgets.

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:

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 Funds, Inter-fund Transactions

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

Private-purpose Trust Funds benefit individuals,private organizations,or other governments.

Capital Projects funds recognize expenses,but not encumbrances.

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

The portion of a permanent fund which is spendable should be reported as Unassigned Fund Balance.

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

If a government issues new debt,and places the proceeds in an escrow account pending the maturity date of existing debt,the existing debt is said to be defeased.

The principal of permanent funds must be classified as Restricted Fund Balance.

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

When accounting for interest expenditures through debt service funds,interest is required to be accrued at year-end.

An annuity serial bond is one where the amount of the principal increases each year by the same amount that the interest payments decrease.

Premiums generated from the issuance of bonds for a capital projects fund are generally:

Which of the following statements is true?

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.

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

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

Fixed assets of completed projects are recorded in the accounts of capital projects funds.

General Funds and special revenue funds typically record budgets.

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:

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 Funds, Inter-fund Transactions

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