Question 1

What 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 2

A special assessment tax is

Accepted Answer

A)  Assessed against all tax payers regardless of who benefits 
B)  Assessed randomly to taxpayers 
C)  Never assessed to anyone 
D)  Assessed only against certain taxpayers who are deemed to benefit from the service or project being paid for by the proceeds of the special assessment levy 
A)  Assessed against all tax payers regardless of who benefits 
B)  Assessed randomly to taxpayers 
C)  Never assessed to anyone 
D)  Assessed only against certain taxpayers who are deemed to benefit from the service or project being paid for by the proceeds of the special assessment levy

Question 3

General fixed assets that are acquired with governmental fund resources are recorded in the:

Accepted Answer

A)  General Fund 
B)  Capital Projects Fund 
C)  General Fund or Capital Projects Fund 
D)  None of the above 
A)  General Fund 
B)  Capital Projects Fund 
C)  General Fund or Capital Projects Fund 
D)  None of the above

Question 4

What amount would be reflected in the government-wide financial statements as a liability for capital leases as of December 31, 2009?

Accepted Answer

A)  $ - 0 - 
B)  $17,326 
C)  $25,000 
D)  $26,264 
A)  $ - 0 - 
B)  $17,326 
C)  $25,000 
D)  $26,264

Question 5

Which of the following is/are true regarding Capital Projects Funds?

Accepted Answer

A)  The major source of funding for capital projects funds is the issuance of long-term debt 
B)  Capital project funds only exist for the duration of the project for which it is created 
C)  Capital Project funds use the Modified Accrual Basis of Accounting 
D)  All of the above are true 
A)  The major source of funding for capital projects funds is the issuance of long-term debt 
B)  Capital project funds only exist for the duration of the project for which it is created 
C)  Capital Project funds use the Modified Accrual Basis of Accounting 
D)  All of the above are true

Question 6

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 7

At the inception of a capital lease agreement,

Accepted Answer

A)  A liability is incurred and reported in the governmental fund account 
B)  A liability is incurred and reported in the government-wide financial statements 
C)  An expenditure is recorded in the governmental fund account 
D)  Both B and C 
A)  A liability is incurred and reported in the governmental fund account 
B)  A liability is incurred and reported in the government-wide financial statements 
C)  An expenditure is recorded in the governmental fund account 
D)  Both B and C

Question 8

Investments of permanent funds should be accounted at fair value, if determinable and unrealized gains reported along with realized gains as "Investment Income-Net Increase in Fair Value of Investments."

Accepted Answer

A) True 
 B)False

Question 9

General funds and special revenue funds typically record budgets.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following would be accounted for as a permanent fund?

Accepted Answer

A)  A gift of $100,000 to a city to be used to make up a shortfall in next year's budget 
B)  A gift of $100,000 to a city to be invested permanently, with the proceeds to be used to buy books for the city library 
C)  A gift of $100,000 to a school district, to be invested permanently, with the proceeds to be awarded as college scholarships to graduating seniors 
D)  A gift of $100,000 to a school district, to be used for landscaping improvements 
A)  A gift of $100,000 to a city to be used to make up a shortfall in next year's budget 
B)  A gift of $100,000 to a city to be invested permanently, with the proceeds to be used to buy books for the city library 
C)  A gift of $100,000 to a school district, to be invested permanently, with the proceeds to be awarded as college scholarships to graduating seniors 
D)  A gift of $100,000 to a school district, to be used for landscaping improvements

Question 11

The following are sources of revenue for the debt service fund except:

Accepted Answer

A)  Tax levies specifically designed for debt service 
B)  General taxes levied by the general fund and transferred to the debt service fund 
C)  Special assessments levied against property 
D)  All of the above are sources of revenue for the debt service fund 
A)  Tax levies specifically designed for debt service 
B)  General taxes levied by the general fund and transferred to the debt service fund 
C)  Special assessments levied against property 
D)  All of the above are sources of revenue for the debt service fund

Question 12

In 2009, the Town of Walton issued $ 2,000,000 of 8% tax supported bonds. The bonds are dated January 1, 2009 with interest payment dates of June 30 and December 31. The first of 10 annual principal payments is due on December 31, 2009. The bonds were sold at a $16,000 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 2009 (including closing entries)

Accepted Answer

None

Question 13

Which of the following is not true regarding permanent funds?

Accepted Answer

A)  Permanent funds are considered governmental funds 
B)  Permanent funds are appropriate when a gift must be invested and the proceeds used to benefit individuals or organizations 
C)  Permanent funds use the current financial resources measurement focus and modified accrual basis of accounting 
D)  Major permanent funds would be reported in the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances 
A)  Permanent funds are considered governmental funds 
B)  Permanent funds are appropriate when a gift must be invested and the proceeds used to benefit individuals or organizations 
C)  Permanent funds use the current financial resources measurement focus and modified accrual basis of accounting 
D)  Major permanent funds would be reported in the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

A debt service fund:

Accepted Answer

A)  Is primarily created to raise funding for a capital project 
B)  Is a proprietary fund 
C)  Is used to account for revenues and other financing sources that are intended for payments on long-term debt 
D)  Is a type of fiduciary fund 
A)  Is primarily created to raise funding for a capital project 
B)  Is a proprietary fund 
C)  Is used to account for revenues and other financing sources that are intended for payments on long-term debt 
D)  Is a type of fiduciary fund

Question 16

If a trust is to be used the benefit individuals, private organizations or other governments, the following fund(s) should be used:

Accepted Answer

A)  Special revenue fund 
B)  Permanent fund 
C)  Private purpose fund 
D)  Either A or B 
A)  Special revenue fund 
B)  Permanent fund 
C)  Private purpose fund 
D)  Either A or B

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

In addition to reporting a $4,000,000 liability and a $40,000 bond premium in the government-wide Statement of Net Assets, how would the bond sale be reported?

Accepted Answer

A)  As a $4,000,000 liability in the government-wide Statement of Net Assets and as a $4,000,000 other financing source in the debt service fund 
B)  As a $4,040,000 liability in the government-wide Statement of Net Assets, as a liability of $ 4,040,000 in the capital projects fund and as an other financing source of $4,040,000 in the capital projects fund 
C)  A $4,040,000 other financing source in the capital projects fund, a $ 40,000 other financing use in the capital projects fund and a $40,000 other financing source in the debt service fund 
D)  The $4,000,000 liability in the government-wide Statement of Net Assets and the $40,000 would also be recorded as a bond premium in the Statement of Net Assets 
A)  As a $4,000,000 liability in the government-wide Statement of Net Assets and as a $4,000,000 other financing source in the debt service fund 
B)  As a $4,040,000 liability in the government-wide Statement of Net Assets, as a liability of $ 4,040,000 in the capital projects fund and as an other financing source of $4,040,000 in the capital projects fund 
C)  A $4,040,000 other financing source in the capital projects fund, a $ 40,000 other financing use in the capital projects fund and a $40,000 other financing source in the debt service fund 
D)  The $4,000,000 liability in the government-wide Statement of Net Assets and the $40,000 would also be recorded as a bond premium in the Statement of Net Assets

Question 19

What is the correct debit or credit for the following scenario: A contract was issued for the major part of work to be done by a private contractor for the amount of $1,200,000?

Accepted Answer

A)  Debit: Reserve for encumbrances 
B)  Debit: Construction expenditures 
C)  Credit: Cash 
D)  Debit: Encumbrances 
A)  Debit: Reserve for encumbrances 
B)  Debit: Construction expenditures 
C)  Credit: Cash 
D)  Debit: Encumbrances

Question 20

Financial statements in which capital projects funds are reported are the Governmental Funds Balance Sheet and the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances.

Accepted Answer

A) True 
 B)False

What is a major source of funding for capital projects funds?

A special assessment tax is

General fixed assets that are acquired with governmental fund resources are recorded in the:

What amount would be reflected in the government-wide financial statements as a liability for capital leases as of December 31, 2009?

Which of the following is/are true regarding Capital Projects Funds?

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.

At the inception of a capital lease agreement,

Investments of permanent funds should be accounted at fair value, if determinable and unrealized gains reported along with realized gains as "Investment Income-Net Increase in Fair Value of Investments."

General funds and special revenue funds typically record budgets.

Which of the following would be accounted for as a permanent fund?

The following are sources of revenue for the debt service fund except:

Which of the following is not true regarding permanent funds?

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

A debt service fund:

If a trust is to be used the benefit individuals, private organizations or other governments, the following fund(s) should be used:

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

In addition to reporting a $4,000,000 liability and a $40,000 bond premium in the government-wide Statement of Net Assets, how would the bond sale be reported?

What is the correct debit or credit for the following scenario: A contract was issued for the major part of work to be done by a private contractor for the amount of $1,200,000?

Financial statements in which capital projects funds are reported are the Governmental Funds Balance Sheet and the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances.

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 Trust Funds

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

Filters

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

What is a major source of funding for capital projects funds?

A special assessment tax is

General fixed assets that are acquired with governmental fund resources are recorded in the:

What amount would be reflected in the government-wide financial statements as a liability for capital leases as of December 31, 2009?

Which of the following is/are true regarding Capital Projects Funds?

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.

At the inception of a capital lease agreement,

Investments of permanent funds should be accounted at fair value, if determinable and unrealized gains reported along with realized gains as "Investment Income-Net Increase in Fair Value of Investments."

General funds and special revenue funds typically record budgets.

Which of the following would be accounted for as a permanent fund?

The following are sources of revenue for the debt service fund except:

Which of the following is not true regarding permanent funds?

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

A debt service fund:

If a trust is to be used the benefit individuals, private organizations or other governments, the following fund(s) should be used:

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

In addition to reporting a $4,000,000 liability and a $40,000 bond premium in the government-wide Statement of Net Assets, how would the bond sale be reported?

What is the correct debit or credit for the following scenario: A contract was issued for the major part of work to be done by a private contractor for the amount of $1,200,000?

Financial statements in which capital projects funds are reported are the Governmental Funds Balance Sheet and the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances.

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 Trust Funds

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

Filters