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

Use the following to answer the next six questions: During the fiscal year ended December 31, 2012, the City of Johnstown issued 6% general obligation serial bonds in the amount of $3,000,000 at 101 ($3,030,000) and used $2,970,000 of the proceeds to construct a fire station. The $30,000 premium was transferred to a debt service fund. The $30,000 left in the capital projects fund at the end of the project was transferred to the debt service fund. The bonds were dated April 1, 2012 and paid interest on October 1 and April 1. The first of 10 equal annual principal payments was due on April 1, 2013. -How would the government account for the transfer of the unused bond proceeds?

Debt service funds should use the same measurement focus and basis of accounting as:

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

General Funds and special revenue funds typically record budgets.

When accounting for interest expenditures through debt service funds,interest is normally recorded as an expenditure when due and payable; it is not accrued at year-end.

A non-expendable trust which benefits a government or its citizenry and which stipulates that earnings only (not principal)may be used for its prescribed purpose would be reported in a Special Revenue Fund.

What would be the amount of expenditures recorded by the debt service fund for the fiscal year ended December 31,2012?

Unmatured principal installments and accrued interest which is due shortly after year end are required to be reported as liabilities in the debt service fund at year end.

Premiums generated from the issuance of bonds for a capital projects fund are generally transferred to the General Fund.

An encumbrance in a capital project fund is created

Which of the following is not correct regarding Government Trust Accounting?

Siler City receives a trust donation for the purpose of maintaining flower beds in city parks,but the donor does not specify that the principal must be maintained.This type of trust would be most appropriately accounted for in a:

Fixed assets are not capitalized in governmental funds.

What amount would be reported as debt service expenditures for 2012?

In a Statement of Revenues,Expenditures,and Changes in Fund Balances,Other Financing Sources are reported within Total Revenues.

Fund balances of debt service funds are classified among the categories identified in GASB Statement 54 as Restricted and Unrestricted.

Only the General Fund has a positive Unassigned Fund Balance.

Which of the following funds has an indefinite life?

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

Which of the following serial bonds has the first installment delayed for a period of more than 1 year after the date of the issue?