Exam 8: Government-Wide Statements, Capital Assets, Long-Term Debt

In its government-wide Statement of Net Assets, a government reported assets of $150 million, including $50 million in capital assets (net of depreciation) and liabilities of $80 million, including long-term debt of $60 million, $40 million of which was issued to acquire capital assets. In addition, $25 million was restricted for debt service and other purposes. The government's unrestricted net assets would be reported as:

What would be the appropriate journal entry to adjust to the accrual basis of accounting for depreciation in prior years?

An example of a program revenue in the government-wide Statement of Activities would be motor fuel taxes dedicated to street repairs.

When converting from fund financial statements to government-wide statements, it is necessary to eliminate those fund transfers that are between the categories of governmental activities and business-type activities.

Internal service funds are most commonly reported in which section of the Government-wide financial statements?

A government had the following transfers reported in its governmental funds Statement of Revenues, Expenditures and Changes in Fund Balances: (1) a transfer from the General Fund to a debt service fund in the amount of $l,000,000; (2) a transfer from the General Fund to an enterprise fund in the amount of $1,200,000; and (3) a transfer from the General Fund to an internal service fund in the amount of $400,000. The amount that would be shown as a transfer out in the governmental activities column in the Statement of Activities would be:

Which of the following items are added to government-wide financial statements through worksheet journal entries?

A company has bonds outstanding at the beginning of the current year. The debit in the worksheet entry to bring these on to the books would be to:

If an Internal Service Fund has positive operating income, the worksheet entry to add the Internal Service Fund to governmental activities would include a:

Governments may choose either to depreciate infrastructure assets or use the modified approach.

A government reported the following transfers in its governmental funds Statement of Revenues, Expenditures and Changes in Fund Balances: (1) a transfer from the General Fund to a special revenue fund in the amount of $400,000; (2) a transfer from the General Fund to an internal service fund in the amount of $300,000; (3) a transfer from the General Fund to a permanent fund in the amount of $200,000. The amount that would be shown as a transfer out in the governmental activities column in the Statement of Activities would be:

Worksheet entries are used to convert modified accrual statements to accrual.

Which of the following is true regarding the government-wide statements?

The Village of Westpark determined that, as of July 1, 2008, infrastructure assets estimated at $200 million were in place, with an estimated useful life of 25 years. During the year ended June 30, 2009, expenditures were $3 million for the routine maintenance of infrastructure, $5 million to extend the life of existing infrastructure and $7 million for infrastructure additions and improvements. Required: a) If the modified approach is used, what would be the amount charged to expense during the fiscal year ended June 30, 2009. What amount would be capitalized? b) What amount would have been charged to expense if the modified approach were not used? What amount would be capitalized?

What conditions must be satisfied in order to use the modified approach for recording infrastructure?

Where in the basic financial statements, in most cases, would one find internal service activities reported?

Government-wide financial statements are prepared using the accrual method of accounting

Internal Service funds use the accrual basis of accounting.

Debt limit is the percentage of governmental activities legally allowed to be financed by debt.

An asset may be considered impaired if either the decline in the service utility is unexpected or the amount of the decline in service utility is large.