Question 1

Which of the following activities or transactions would normally not be accounted for in a capital projects fund?

Accepted Answer

A) Construction of a new city jail. 
B) Construction of airport runways financed by revenue bonds and to be repaid from the revenues of the city airport,an enterprise fund. 
C) Lease of a building to be used as a city office building. 
D) Construction of a new city park to be maintained primarily from General Fund revenues. 
A) Construction of a new city jail. 
B) Construction of airport runways financed by revenue bonds and to be repaid from the revenues of the city airport,an enterprise fund. 
C) Lease of a building to be used as a city office building. 
D) Construction of a new city park to be maintained primarily from General Fund revenues.

Question 2

If a city acquires a new office building under a capital lease agreement,
1)The cost of the building should be recorded in the ____________ general journal(s).
2)The "cost" of the building is computed as _______________.
3)A governmental fund should record the cost of the building as an Expenditure,offset by a credit to _______________.
4)The liability for the capital lease should be recorded in the __________ general journal(s).
5)The liability should be computed as _______________.

Accepted Answer

Capital leases.
1)Capital projects fund

Question 3

The following key terms from Chapter 5 relate to general capital assets and capital projects:
A)Bond anticipation notes
B)Infrastructure assets
C)Special assessments
D)General capital assets
E)Capital projects funds
F)Capital improvements funds
G)Capital leases
H)Operating leases
For each of the following definitions,indicate the key term from the list above that best matches the definition by placing the appropriate letter in the blank space next to the definition.

Accepted Answer

The answer of The following key terms from Chapter 5...

Question 4

In late June,the Everready Construction Co.submitted a $600,000 progress billing on a construction contract.On July 2,the bill was approved for payment,subject to a five percent retention,as provided by the contract.Construction expenditures should be debited when

Accepted Answer

A) The bill is approved for payment. 
B) The bill is received. 
C) The bill is paid (except for the five percent retention). 
D) The final five percent of the bill is paid. 
A) The bill is approved for payment. 
B) The bill is received. 
C) The bill is paid (except for the five percent retention). 
D) The final five percent of the bill is paid.

Question 5

Streets,curbs,and sidewalks constructed or acquired through use of capital projects fund resources should never be reported in the financial statements of a government because they are for the use of the public,not for use by the government.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) Expenditure. 
B) Capital asset. 
C) Appropriation. 
D) Expense. 
A) Expenditure. 
B) Capital asset. 
C) Appropriation. 
D) Expense.

Question 7

Proceeds of tax-supported debt issued for the construction or acquisition of capital assets are recognized by the capital projects fund as "other financing sources" and as a liability in the governmental activities journal.

Accepted Answer

A) True 
 B)False

Question 8

The budgetary account recommended for use by a capital projects funds is

Accepted Answer

A) Estimated revenues. 
B) Encumbrances. 
C) Appropriations. 
D) Estimated Other Financing Uses. 
A) Estimated revenues. 
B) Encumbrances. 
C) Appropriations. 
D) Estimated Other Financing Uses.

Question 9

"Infrastructure assets (e.g.,roads,bridges,curbs and gutters,streets,etc.)need not be capitalized since they are immovable and not likely to be stolen." Do you agree or disagree? Explain your answer.

Accepted Answer

Disagree.Under GASB standards,infrastruc

Question 10

Discuss the required disclosures for capital assets in a government's notes to the financial statements.

Accepted Answer

There are several required disclosures r

Question 11

In 2011,Weaver City signed a contract in the amount of $6,000,000 for the construction of a new city hall.Expenditures were $4,000,000 in 2011 and $2,050,000 in 2012,which included a change to the original construction design in the amount of $50,000.What amount should be added to net capital assets in the governmental activities accounts in 2012?

Accepted Answer

A) $6,000,000 
B) $6,050,000 
C) $2,050,000 
D) $2,000,000. 
A) $6,000,000 
B) $6,050,000 
C) $2,050,000 
D) $2,000,000.

Question 12

Which of the following would be considered a general capital asset?

Accepted Answer

A) A vehicle purchased from General Fund revenues. 
B) A vehicle purchased and maintained by an enterprise fund. 
C) A computer purchased from revenues of an internal service fund and used by the supplies department. 
D) Real estate purchased with the assets of a pension trust fund. 
A) A vehicle purchased from General Fund revenues. 
B) A vehicle purchased and maintained by an enterprise fund. 
C) A computer purchased from revenues of an internal service fund and used by the supplies department. 
D) Real estate purchased with the assets of a pension trust fund.

Question 13

The city of Milan was notified that it had been approved for a state government grant in the amount of $1,000,000 to help finance its new city jail.The money from the grant will be received later in the current fiscal year.The journal entry to record this transaction will include

Accepted Answer

A) A credit to Other Financing Sources upon notification. 
B) A credit to Revenues when all eligibility requirements are met. 
C) A credit to Revenues upon receipt of the money from the state. 
D) A credit to Other Financing Sources upon receipt of the money from the state. 
A) A credit to Other Financing Sources upon notification. 
B) A credit to Revenues when all eligibility requirements are met. 
C) A credit to Revenues upon receipt of the money from the state. 
D) A credit to Other Financing Sources upon receipt of the money from the state.

Question 14

Which of the following statements is correct concerning interest expenditures incurred during the period of construction of capital projects?

Accepted Answer

A) Interest expenditures may not be capitalized as part of the cost of general capital assets reported in governmental activities. 
B) Interest expenditures may be capitalized as part of the cost of general capital assets reported in the governmental activities accounts at the government-wide level. 
C) Interest expenditures must be capitalized as part of the cost of general capital assets reported in the capital projects fund. 
D) Interest expenditures may optionally be capitalized as part of the cost of general capital assets reported in the capital projects fund. 
A) Interest expenditures may not be capitalized as part of the cost of general capital assets reported in governmental activities. 
B) Interest expenditures may be capitalized as part of the cost of general capital assets reported in the governmental activities accounts at the government-wide level. 
C) Interest expenditures must be capitalized as part of the cost of general capital assets reported in the capital projects fund. 
D) Interest expenditures may optionally be capitalized as part of the cost of general capital assets reported in the capital projects fund.

Question 15

When a project has been completed,inspected,and accepted,retained percentages of contract billings may be paid.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) Internal service fund. 
B) Debt service. 
C) General. 
D) Special revenue. 
A) Internal service fund. 
B) Debt service. 
C) General. 
D) Special revenue.

Question 17

Interfund 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)

Accepted Answer

A) Fund balance addition. 
B) Revenue. 
C) Other financing source. 
D) Current liability. 
A) Fund balance addition. 
B) Revenue. 
C) Other financing source. 
D) Current liability.

Question 18

The following general capital assets were owned by the town of Otterville:   What amount should be recorded as capital assets in the town's governmental activities accounts if Otterville follows GASB standards?

Accepted Answer

A) $0. 
B) $3,250,000. 
C) $5,250,000. 
D) $6,250,000. 
A) $0. 
B) $3,250,000. 
C) $5,250,000. 
D) $6,250,000.

Question 19

In addition to required disclosures about general capital assets,a government is required to allocate the depreciation expense on all of its general capital assets to functional categories.

Accepted Answer

A) True 
 B)False

Question 20

The following are the city of Beaver Creek's capital assets:   What aggregate amount should Beaver Creek record in the governmental activities journal?

Accepted Answer

A) $7,000,000. 
B) $8,000,000. 
C) $8,700,000. 
D) $9,700,000. 
A) $7,000,000. 
B) $8,000,000. 
C) $8,700,000. 
D) $9,700,000.

Which of the following activities or transactions would normally not be accounted for in a capital projects fund?

In late June,the Everready Construction Co.submitted a $600,000 progress billing on a construction contract.On July 2,the bill was approved for payment,subject to a five percent retention,as provided by the contract.Construction expenditures should be debited when

Streets,curbs,and sidewalks constructed or acquired through use of capital projects fund resources should never be reported in the financial statements of a government because they are for the use of the public,not for use by the government.

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

Proceeds of tax-supported debt issued for the construction or acquisition of capital assets are recognized by the capital projects fund as "other financing sources" and as a liability in the governmental activities journal.

The budgetary account recommended for use by a capital projects funds is

"Infrastructure assets (e.g.,roads,bridges,curbs and gutters,streets,etc.)need not be capitalized since they are immovable and not likely to be stolen." Do you agree or disagree? Explain your answer.

Discuss the required disclosures for capital assets in a government's notes to the financial statements.

Which of the following would be considered a general capital asset?

The city of Milan was notified that it had been approved for a state government grant in the amount of $1,000,000 to help finance its new city jail.The money from the grant will be received later in the current fiscal year.The journal entry to record this transaction will include

Which of the following statements is correct concerning interest expenditures incurred during the period of construction of capital projects?

When a project has been completed,inspected,and accepted,retained percentages of contract billings may be paid.

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

Interfund 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)

The following general capital assets were owned by the town of Otterville: What amount should be recorded as capital assets in the town's governmental activities accounts if Otterville follows GASB standards?

In addition to required disclosures about general capital assets,a government is required to allocate the depreciation expense on all of its general capital assets to functional categories.

The following are the city of Beaver Creek's capital assets: What aggregate amount should Beaver Creek record in the governmental activities journal?

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 Activities Agency 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 Organizations Regulatory, taxation, and Performance Issues

Accounting for Colleges and Universities

Accounting for Health Care Organizations

Accounting and Reporting for the Federal Government

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Exam 5: Accounting for General Capital Assets and Capital Projects

Which of the following activities or transactions would normally not be accounted for in a capital projects fund?

In late June,the Everready Construction Co.submitted a $600,000 progress billing on a construction contract.On July 2,the bill was approved for payment,subject to a five percent retention,as provided by the contract.Construction expenditures should be debited when

Streets,curbs,and sidewalks constructed or acquired through use of capital projects fund resources should never be reported in the financial statements of a government because they are for the use of the public,not for use by the government.

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

Proceeds of tax-supported debt issued for the construction or acquisition of capital assets are recognized by the capital projects fund as "other financing sources" and as a liability in the governmental activities journal.

The budgetary account recommended for use by a capital projects funds is

"Infrastructure assets (e.g.,roads,bridges,curbs and gutters,streets,etc.)need not be capitalized since they are immovable and not likely to be stolen." Do you agree or disagree? Explain your answer.

Discuss the required disclosures for capital assets in a government's notes to the financial statements.

Which of the following would be considered a general capital asset?

The city of Milan was notified that it had been approved for a state government grant in the amount of $1,000,000 to help finance its new city jail.The money from the grant will be received later in the current fiscal year.The journal entry to record this transaction will include

Which of the following statements is correct concerning interest expenditures incurred during the period of construction of capital projects?

When a project has been completed,inspected,and accepted,retained percentages of contract billings may be paid.

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

Interfund 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)

The following general capital assets were owned by the town of Otterville: What amount should be recorded as capital assets in the town's governmental activities accounts if Otterville follows GASB standards?

In addition to required disclosures about general capital assets,a government is required to allocate the depreciation expense on all of its general capital assets to functional categories.

The following are the city of Beaver Creek's capital assets: What aggregate amount should Beaver Creek record in the governmental activities journal?

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 Activities Agency 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 Organizations Regulatory, taxation, and Performance Issues

Accounting for Colleges and Universities

Accounting for Health Care Organizations

Accounting and Reporting for the Federal Government

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