Question 1

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 2

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.

Accepted Answer

A) True 
 B)False

Question 3

The city of McNeely sold bonds in the amount of $10,000,000 to finance the construction of a public health center.The bonds are serial bonds and were sold at par on July 1,2014 the first day of a fiscal year.Shortly thereafter a construction contract in the amount of $9,000,000 was signed and the contractor commenced work.By year-end the contractor had been paid in full for all billings to date amounting to $4,000,000.Prepare,in general journal form,all journal entries that should have been made during the fiscal year ended June 30,2015 to record the preceding information in the capital projects fund.(No closing entry is required).

Accepted Answer

The answer of The city of McNeely sold bonds in...

Question 4

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

The answer of If a city acquires a new office...

Question 5

For which of the following assets can the "modified approach" be elected in lieu of depreciation?

Accepted Answer

A)  Buildings and equipment. 
B)  All general capital assets. 
C)  All capital assets. 
D)  Eligible infrastructure assets.

Question 6

When materials that were ordered for a capital projects fund for use on a construction project are received but the invoice has not yet been paid,what account is debited?

Accepted Answer

A)  Encumbrances. 
B)  Appropriations. 
C)  Vouchers payable. 
D)  Construction Expenditures.

Question 7

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.

Question 8

A government enters into a capital lease for the purchase of a new fire truck.The present value of the future lease payments is $745,500 and there is a down payment at the inception of the lease of $25,000.The fire truck should be recorded in the General Fund at

Accepted Answer

A)  $25,000. 
B)  $770,500. 
C)  $745,500. 
D)  $0.

Exam 5: Accounting for General Capital Assets and Capital Projects