Question 1

What amount would be reported as debt service expenditures for 2017?

Accepted Answer

A)  $560,000. 
B)  $360,000. 
C)  $160,000. 
D)  $ 80,000.

Question 2

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

Accepted Answer

A)  An intergovernmental grant of $500,000 to a city to be used for low income housing. 
B)  A gift of $500,000 to a city, to be invested permanently, with the proceeds to be distributed as scholarships. 
C)  A gift of $500,000 to a city, to be invested permanently, with the proceeds to be used to maintain the city cemetery. 
D)  A gift of $500,000 to a city to be used for a new caretaker's residence at the local cemetery.

Question 3

The General Fund is always considered to be a major fund. When are other governmental funds considered major?

Accepted Answer

The answer of The General Fund is always considered to...

Question 4

Capital assets are not reported in governmental funds.

Accepted Answer

A) True 
 B)False

Question 5

The portion of a permanent fund which is spendable should be reported as Unassigned Fund Balance.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements regarding serial bonds is false?

Accepted Answer

A)  The principal on serial bonds is paid over the term of the bonds. 
B)  The assets of a debt service fund may include Cash with Fiscal Agent 
C)  If the first payment is delayed for more than a year with equal payments thereafter, the bonds are deferred serial bonds 
D)  The principal repayment on an annuity serial bonds decreases each year as the outstanding balance decreases

Question 7

With respect to Permanent Funds, which of the following is not true?

Accepted Answer

A)  The principal is classified as Nonspendable Fund balance 
B)  Permanent Funds are included in the government-wide statements. 
C)  Permanent Funds are fiduciary funds and not reported in the government-wide statements. 
D)  Permanent Funds use the current financial resources measurement focus.

Question 8

Cash provided by the General Fund for a capital project would be recorded in a capital projects fund as a an:

Accepted Answer

A)  Revenue. 
B)  Other Financing Use. 
C)  Direct addition to Fund Balance. 
D)  Other Financing Source - Transfer In.

Question 9

If taxes are levied specifically for payment of interest and principal on long-term debt, those taxes are:

Accepted Answer

A)  Included as a liability of the General Fund. 
B)  Recorded as operating transfers to the debt service fund. 
C)  Included as revenues of the debt service fund. 
D)  Both A and B are correct.

Question 10

A gift of $1,000,000 to a city, to be invested permanently, with the proceeds to be used to maintain the city war memorials should be accounted for in a special revenue fund.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A)  A gift of $65,000 to a school district, to be invested permanently, with the proceeds to be awarded as college scholarships to graduating seniors. 
B)  A gift of $65,000 to a school district, to be used for landscaping improvements. 
C)  A gift of $65,000 to a city to be invested permanently, with the proceeds to be used to buy books for the city library. 
D)  Both A and C

Question 12

Fund balances of debt service funds are classified among the categories of Restricted and Unrestricted.

Accepted Answer

A) True 
 B)False

Question 13

Net assets represented by supplies and prepaid expenses are classified in governmental funds as Nonspendable Fund balance.

Accepted Answer

A) True 
 B)False

Question 14

What is the difference between a current refunding and advance refunding?

Accepted Answer

The answer of What is the difference between a current...

Question 15

All of the governmental funds except permanent funds use the modified accrual basis of accounting.

Accepted Answer

A) True 
 B)False

Question 16

During the fiscal year ended December 31, 2017, the City of Johnstown issued 6% general obligation serial bonds in the amount of $2,000,000 at 102 $2,040,000) and used $1,980,000 of the proceeds to construct a fire station.  The $40,000 premium was transferred to a debt service fund.  The $20,000 left in the capital projects fund at the end of the project was later transferred to the debt service fund.  The bonds were dated April 1, 2017 and paid interest on October 1 and April 1.  The first of 10 equal annual principal payments was due on April 1, 2018. 
-What would be the amount of expenditures recorded by the debt service fund for the fiscal year ended December 31, 2017?

Accepted Answer

A)  $320,000. 
B)  $120,000. 
C)  $ 90,000. 
D)  $ 60,000.

Question 17

Capital project funds record the proceeds of debt issued as:

Accepted Answer

A)  Liabilities. 
B)  Other Financing Sources. 
C)  Revenues. 
D)  Expenses.

Question 18

An encumbrance in a capital project fund is created when the contract for the work is signed or issued.

Accepted Answer

A) True 
 B)False

Question 19

Capital Projects funds recognize expenses, but not encumbrances.

Accepted Answer

A) True 
 B)False

Question 20

Governmental funds, other than the General Fund, are considered major if:
I. Total Assets, Liabilities, Revenues, or Expenditures of that individual governmental fund are at least 10% of the corresponding total assets, liabilities, and so forth for all governmental funds.
II. Total Assets, Liabilities, Revenues, or Expenditures of the individual governmental fund are at least 5% of the corresponding total for all governmental and enterprise funds combined.

Accepted Answer

A)  I only. 
B)  II only. 
C)  Either I or II, but need not be both. 
D)  Both I and II.

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

What amount would be reported as debt service expenditures for 2017?

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

The General Fund is always considered to be a major fund. When are other governmental funds considered major?

Capital assets are not reported in governmental funds.

The portion of a permanent fund which is spendable should be reported as Unassigned Fund Balance.

Which of the following statements regarding serial bonds is false?

With respect to Permanent Funds, which of the following is not true?

Cash provided by the General Fund for a capital project would be recorded in a capital projects fund as a an:

If taxes are levied specifically for payment of interest and principal on long-term debt, those taxes are:

A gift of $1,000,000 to a city, to be invested permanently, with the proceeds to be used to maintain the city war memorials should be accounted for in a special revenue fund.

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

Fund balances of debt service funds are classified among the categories of Restricted and Unrestricted.

Net assets represented by supplies and prepaid expenses are classified in governmental funds as Nonspendable Fund balance.

What is the difference between a current refunding and advance refunding?

All of the governmental funds except permanent funds use the modified accrual basis of accounting.

Capital project funds record the proceeds of debt issued as:

An encumbrance in a capital project fund is created when the contract for the work is signed or issued.

Capital Projects funds recognize expenses, but not encumbrances.