Exam 5: Accounting for General Capital Assets and Capital Projects

If all asset,liability,and fund equity accounts of a capital projects fund were closed during a certain fiscal year,it is unnecessary to prepare any financial statements for that fund for that year.

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.

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:

The disposal of a general capital asset,resulting in no revenue or expenditure to the government,is recorded only in the governmental activities accounts.

Capital projects funds generally do not use the Encumbrances control account.

In which of the following would it not be appropriate to record depreciation of capital assets?

A government enters into a capital lease for the purchase of a new snow plow.The present value of the future lease payments is $845,500 and there is a down payment at the inception of the lease of $25,000.The snow plow should be recorded in the government-wide statement of net position at:

Governments can opt not to capitalize collections or individual works of art or historical treasures if the collection is:

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.

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):

Premiums received on tax-supported bonds are generally transferred to what fund?

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,of which $40,000 was the value of the land on which the building was situated.At what amount should Rosewood record this donated property in the General Fund?

Capital projects funds differ from the General Fund and special revenue funds in that the latter categories have a year-to-year life,whereas capital projects funds have a project-life focus.

GASB allows governments with a population below 100,000 to choose the modified approach,whereby they are not required to record depreciation on general capital assets.

When a snowplow purchased by a government is received,it should be recorded in the governmental activities general journal as a(an):

Which of the following statements is correct regarding depreciation?

If bonds are sold at a premium to finance a capital project,what important question arises concerning the premium? Discuss the proper accounting for a bond premium in the capital projects fund,the debt service fund,and the government-wide statements assuming that the premium must be reserved for debt service.

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,of which $40,000 was the value of the land on which the building was situated.At what amount should this contribution be recorded in the governmental activities accounts at the government-wide level?

To offset engineering and design costs incurred prior to the issuance of a long-term bond issue,a capital projects fund borrowed the sum of $75,000 on a short-term basis from First National Bank.This transaction should be recorded in:

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