Question 1

GASB standards require that general capital assets be recorded in the government-wide statements at:

Accepted Answer

A)  Historical cost. 
B)  Fair value at the financial statement date. 
C)  Estimated cost at the financial statement date 
D)  None of the above. 
A)  Historical cost. 
B)  Fair value at the financial statement date. 
C)  Estimated cost at the financial statement date 
D)  None of the above.

Question 2

The following items were included in Castle City's General Fund expenditures for the year ended June Personal computer for the city treasurer $ 6,000
Furniture for the mayor's office $ 20,000
How much should be classified as capital assets in Castle City's government-wide statement of net position at June 30?

Accepted Answer

A)  $ 0. 
B)  $ 6,000. 
C)  $20,000. 
D)  $26,000. 
A)  $ 0. 
B)  $ 6,000. 
C)  $20,000. 
D)  $26,000.

Question 3

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:

Accepted Answer

A)  A capital lease. 
B)  An operating lease. 
C)  A service concession arrangement. 
D)  A sale-leaseback agreement. 
A)  A capital lease. 
B)  An operating lease. 
C)  A service concession arrangement. 
D)  A sale-leaseback agreement.

Question 4

Four new computers,for which the cost exceeded the city's capitalization threshold,were purchased for use in the city clerk's office using General Fund resources.Which of the following entries would be required to completely record this transaction?

Accepted Answer

A)  General Fund: Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
Vouchers Payable . . . . . . . . . . . . . . . . . . . . . . . . 8,000 
B)  Governmental Activities: Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
Vouchers Payable . . . . . . . . . . . . . . . . . . . . . . . . 8,000 
C)  General Fund: Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
Vouchers Payable . . . . . . . . . . . . . . . . . . . . . . . . 8,000
Governmental Activities:
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
Vouchers Payable . . . . . . . . . . . . . . . . . . . . . . . . 8,000 
D)  General Fund: Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
Vouchers Payable . . . . . . . . . . . . . . . . . . . . . . . . 8,000
Governmental Activities:
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
Vouchers Payable . . . . . . . . . . . . . . . . . . . . . . . . 8,000 
A)  General Fund: Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
Vouchers Payable . . . . . . . . . . . . . . . . . . . . . . . . 8,000 
B)  Governmental Activities: Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
Vouchers Payable . . . . . . . . . . . . . . . . . . . . . . . . 8,000 
C)  General Fund: Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
Vouchers Payable . . . . . . . . . . . . . . . . . . . . . . . . 8,000
Governmental Activities:
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
Vouchers Payable . . . . . . . . . . . . . . . . . . . . . . . . 8,000 
D)  General Fund: Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
Vouchers Payable . . . . . . . . . . . . . . . . . . . . . . . . 8,000
Governmental Activities:
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
Vouchers Payable . . . . . . . . . . . . . . . . . . . . . . . . 8,000

Question 5

Which expenditures of a capital projects fund should be capitalized to Construction Work in Progress? Is Construction Work in Progress included in the chart of accounts of a capital projects fund? If not,where would it be found?

Accepted Answer

All ordinary and necessary costs to cons

Question 6

The following balances are included in the subsidiary records of Carrollwood: Town hall building .................... $500,000
Town pool (supported by user fees)...... 100,000
Police cars .......................... 20,000
Equipment .......................... 7,500
Office supplies ....................... 1,000
What is the total amount of general capital assets held by the town?

Accepted Answer

A)  $527,500. 
B)  $528,500. 
C)  $627,500. 
D)  $628,500. 
A)  $527,500. 
B)  $528,500. 
C)  $627,500. 
D)  $628,500.

Question 7

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

Accepted Answer

A)  A debit to Equipment. 
B)  A debit to Capital Lease Expense. 
C)  A credit to Obligations under Capital Leases. 
D)  A credit to Other Financing Uses-Capital Leases. 
A)  A debit to Equipment. 
B)  A debit to Capital Lease Expense. 
C)  A credit to Obligations under Capital Leases. 
D)  A credit to Other Financing Uses-Capital Leases.

Question 8

A capital projects fund might be used to account for which of the following activities?

Accepted Answer

A)  Maintaining sidewalks. 
B)  Building a parking garage. 
C)  Providing water and sewer services. 
D)  Servicing long-term debt. 
A)  Maintaining sidewalks. 
B)  Building a parking garage. 
C)  Providing water and sewer services. 
D)  Servicing long-term debt.

Question 9

Historical cost includes acquisition cost less any ancillary costs necessary to put the asset into use.

Accepted Answer

A) True 
 B)False

Question 10

General capital assets purchased or constructed with governmental fund resources are recorded in the governmental activities general ledger at the government-wide level.

Accepted Answer

A) True 
 B)False

Question 11

In 2017,Sunrise City signed a contract in the amount of $8,000,000 for the construction of a new city hall.Expenditures were $4,000,000 in 2017 and $2,050,000 in 2018,which included a change to the original construction design in the amount of $50,000.What amount should be added to capital assets in the governmental activities accounts in 2018?

Accepted Answer

A)  $ 0 
B)  $ 50,000 
C)  $ 2,050,000 
D)  $ 2,000,000 
A)  $ 0 
B)  $ 50,000 
C)  $ 2,050,000 
D)  $ 2,000,000

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

General capital assets acquired under capital leases should not be recorded in the governmental activities accounts.

Accepted Answer

A) True 
 B)False

Question 14

The recorded premium on tax-supported bonds issued by a capital projects fund should be amortized at both the government-wide and fund levels.

Accepted Answer

A) True 
 B)False

Question 15

State laws often require that assets no longer needed in a capital projects fund be transferred to the fund that will service the debt incurred for the project,a debt service fund.

Accepted Answer

A) True 
 B)False

Question 16

When a government experiences delays associated with a bond issuance,it is common practice to obtain temporary financing by use of bond anticipation notes.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is not a required disclosure about each major class of capital assets?

Accepted Answer

A)  Beginning-of-year and end-of-year balances showing accumulated depreciation separate from historical cost. 
B)  Capital acquisitions and sales or other dispositions during the year showing the date and method of acquisition or disposition. 
C)  Depreciation expense for the current period with disclosure of the amounts charged to each function in the statement of activities. 
D)  Disclosures describing works of art or historical treasures that are not capitalized and explaining why they are not capitalized. 
A)  Beginning-of-year and end-of-year balances showing accumulated depreciation separate from historical cost. 
B)  Capital acquisitions and sales or other dispositions during the year showing the date and method of acquisition or disposition. 
C)  Depreciation expense for the current period with disclosure of the amounts charged to each function in the statement of activities. 
D)  Disclosures describing works of art or historical treasures that are not capitalized and explaining why they are not capitalized.

Question 18

GASB standards require that all governmental expenditures for long-lived assets be accounted for by a capital projects fund.

Accepted Answer

A) True 
 B)False

Question 19

Under a service concession arrangement,

Accepted Answer

A)  The transferring government continues to report the transferred asset as a capital asset and any related contractual obligations as liabilities. 
B)  The operating government will record the transferring government's payment or receivable, a liability for the present value of significant contractual obligations and a corresponding deferred inflow of resources for the difference between the two. 
C)  Any deferred inflow of resources is recognized as revenue at the time the arrangement takes place. 
D)  All of the above statements are true. 
A)  The transferring government continues to report the transferred asset as a capital asset and any related contractual obligations as liabilities. 
B)  The operating government will record the transferring government's payment or receivable, a liability for the present value of significant contractual obligations and a corresponding deferred inflow of resources for the difference between the two. 
C)  Any deferred inflow of resources is recognized as revenue at the time the arrangement takes place. 
D)  All of the above statements are true.

Question 20

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 General Fund at:

Accepted Answer

A)  $ 25,000. 
B)  $870,500. 
C)  $845,500. 
D)  $0. 
A)  $ 25,000. 
B)  $870,500. 
C)  $845,500. 
D)  $0.

GASB standards require that general capital assets be recorded in the government-wide statements at:

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:

Four new computers,for which the cost exceeded the city's capitalization threshold,were purchased for use in the city clerk's office using General Fund resources.Which of the following entries would be required to completely record this transaction?

Which expenditures of a capital projects fund should be capitalized to Construction Work in Progress? Is Construction Work in Progress included in the chart of accounts of a capital projects fund? If not,where would it be found?

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

A capital projects fund might be used to account for which of the following activities?

Historical cost includes acquisition cost less any ancillary costs necessary to put the asset into use.

General capital assets purchased or constructed with governmental fund resources are recorded in the governmental activities general ledger at the government-wide level.

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

General capital assets acquired under capital leases should not be recorded in the governmental activities accounts.

The recorded premium on tax-supported bonds issued by a capital projects fund should be amortized at both the government-wide and fund levels.

State laws often require that assets no longer needed in a capital projects fund be transferred to the fund that will service the debt incurred for the project,a debt service fund.

When a government experiences delays associated with a bond issuance,it is common practice to obtain temporary financing by use of bond anticipation notes.

Which of the following is not a required disclosure about each major class of capital assets?

GASB standards require that all governmental expenditures for long-lived assets be accounted for by a capital projects fund.

Under a service concession arrangement,

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 General Fund at:

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

Principles of Accounting and Financial Reporting for State and Local Governments

Governmental Operating Statement Accounts Budgetary Accounting

Accounting for Governmental Operating Activitiesillustrative Transactions and Financial Statements

Accounting for General Long-Term Liabilities and Debt Service

Accounting for the Business-Type Activities of State and Local Governments

Accounting for Fiduciary Activitiesagency and Trust Funds

Financial Reporting of State and Local Governments

Analysis of Governmental Financial Performance

Auditing of Governmental and Not-For-Profit Organizations

Budgeting and Performance Measurement

Accounting for Not-For-Profit Organizations

Not-For-Profit Organizationsregulatory, Taxation, and Performance Issues

Accounting for Colleges and Universities

Accounting for Health Care Organizations

Accounting and Reporting for the Federal Government Glossary

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Exam 5: Accounting for General Capital Assets and Capital Projects

GASB standards require that general capital assets be recorded in the government-wide statements at:

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:

Four new computers,for which the cost exceeded the city's capitalization threshold,were purchased for use in the city clerk's office using General Fund resources.Which of the following entries would be required to completely record this transaction?

Which expenditures of a capital projects fund should be capitalized to Construction Work in Progress? Is Construction Work in Progress included in the chart of accounts of a capital projects fund? If not,where would it be found?

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

A capital projects fund might be used to account for which of the following activities?

Historical cost includes acquisition cost less any ancillary costs necessary to put the asset into use.

General capital assets purchased or constructed with governmental fund resources are recorded in the governmental activities general ledger at the government-wide level.

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

General capital assets acquired under capital leases should not be recorded in the governmental activities accounts.

The recorded premium on tax-supported bonds issued by a capital projects fund should be amortized at both the government-wide and fund levels.

State laws often require that assets no longer needed in a capital projects fund be transferred to the fund that will service the debt incurred for the project,a debt service fund.

When a government experiences delays associated with a bond issuance,it is common practice to obtain temporary financing by use of bond anticipation notes.

Which of the following is not a required disclosure about each major class of capital assets?

GASB standards require that all governmental expenditures for long-lived assets be accounted for by a capital projects fund.

Under a service concession arrangement,

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 General Fund at:

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

Principles of Accounting and Financial Reporting for State and Local Governments

Governmental Operating Statement Accounts Budgetary Accounting

Accounting for Governmental Operating Activitiesillustrative Transactions and Financial Statements

Accounting for General Long-Term Liabilities and Debt Service

Accounting for the Business-Type Activities of State and Local Governments

Accounting for Fiduciary Activitiesagency and Trust Funds

Financial Reporting of State and Local Governments

Analysis of Governmental Financial Performance

Auditing of Governmental and Not-For-Profit Organizations

Budgeting and Performance Measurement

Accounting for Not-For-Profit Organizations

Not-For-Profit Organizationsregulatory, Taxation, and Performance Issues

Accounting for Colleges and Universities

Accounting for Health Care Organizations

Accounting and Reporting for the Federal Government Glossary

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