Question 1

The residual classification for funds other than the General Fund is Assigned.

Accepted Answer

A) True 
 B)False

Question 2

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 created when resources are provided by private donation. 
C)  Permanent Funds use the current financial resources measurement focus. 
D)  Earnings in excess of expenditures must be added to principal corpus. 
A)  The principal is classified as Nonspendable Fund balance. 
B)  Permanent Funds are created when resources are provided by private donation. 
C)  Permanent Funds use the current financial resources measurement focus. 
D)  Earnings in excess of expenditures must be added to principal corpus.

Question 3

Use the following to answer the next three questions:
A government entered into a capital lease agreement to acquire equipment for the general government on January 1, 2012. Five payments of $8,000 each are to be made, beginning on December 31, 2012. Discounting is at 6%, computed annually. The present value of the five payments is $33,699.
-On December 31,2012,the amount debited to Expenditures-Interest in the debt service fund would be:

Accepted Answer

A)  $8,000. 
B)  $2,400. 
C)  $2,022. 
D)  $8,000 
A)  $8,000. 
B)  $2,400. 
C)  $2,022. 
D)  $8,000

Question 4

Interest payments on bonds issued for capital projects are recorded in which account?

Accepted Answer

A)  The Capital Project Fund. 
B)  The Long Term Asset Group. 
C)  The General Fund. 
D)  The Debt Service Fund. 
A)  The Capital Project Fund. 
B)  The Long Term Asset Group. 
C)  The General Fund. 
D)  The Debt Service Fund.

Question 5

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 permanent fund.

Accepted Answer

A) True 
 B)False

Question 6

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 7

At the inception of a capital lease agreement,

Accepted Answer

A)  A liability is incurred and reported in the governmental fund account. 
B)  A liability is incurred and reported in the government-wide financial statements. 
C)  An expenditure is recorded in the governmental fund account. 
D)  Both B and C 
A)  A liability is incurred and reported in the governmental fund account. 
B)  A liability is incurred and reported in the government-wide financial statements. 
C)  An expenditure is recorded in the governmental fund account. 
D)  Both B and C

Question 8

Which of the following statements about Special Assessments is correct?

Accepted Answer

A)  They're accounted for only in the General Fund or a special revenue fund. 
B)  They can only raise taxes for funding the projects. 
C)  Construction type special assessment projects can only account for short term projects to be considered special assessment. 
D)  Accounting for construction type special assessments depends on the existence of any contingent liability on the part of the government. 
A)  They're accounted for only in the General Fund or a special revenue fund. 
B)  They can only raise taxes for funding the projects. 
C)  Construction type special assessment projects can only account for short term projects to be considered special assessment. 
D)  Accounting for construction type special assessments depends on the existence of any contingent liability on the part of the government.

Question 9

The City of St.Michael received a gift of $2,000,000 from a local resident on April 1,2012 and signed an agreement that the funds would be invested permanently and that the income would be used to maintain the city cemetery.The following transactions took place during the year ended December 31,2012.
(a)The gift was recorded on April 1.
(b)On April 1,2012,XYZ Company bonds were purchased in the amount of $2,000,000,at par.The bonds carry an annual interest rate of 5 percent,payable semiannually on October 1 and April 1.
(c)On October 1,the semiannual interest was received.
(d)From October 1 through December 1,payments were made totaling $39,400 to a lawn service.
(e)On December 31,an accrual was made for interest.
(f)Also,on December 31,a reading of the financial press indicated that XYZ bonds had a fair value of $1,985,000,exclusive of accrued interest.
(g)The books were closed.
Required:
A.Record the transactions on the books of the Cemetery Perpetual Care Fund.
B.Prepare a separate Statement of Revenues,Expenditures,and Changes in Fund Balances for the Cemetery Perpetual Care Fund for the Year Ended December 31,2012.
C.Prepare the Balance Sheet for the Cemetery Perpetual Care Fund for the year ended December 31,2012

Accepted Answer

The answer of The City of St.Michael received a gift...

Question 10

Budgets are typically recorded for Special Revenue Funds.

Accepted Answer

A) True 
 B)False

Question 11

Fund basis financial statements in which capital projects funds are reported are the Governmental Funds Balance Sheet and the Governmental Funds Statement of Revenues,Expenditures,and Changes in Fund Balances.

Accepted Answer

A) True 
 B)False

Question 12

Encumbrance accounting is typically used for Permanent Funds.

Accepted Answer

A) True 
 B)False

Question 13

When a government receives a gift that must be invested permanently and the investment proceeds are used to benefit the government or its citizens,it would be appropriate to account for that gift in a private purpose trust fund.

Accepted Answer

A) True 
 B)False

Question 14

Investments of permanent funds should be reported at fair value,if determinable,and unrealized gains reported along with realized gains as "Investment Income-Net Increase in Fair Value of Investments."

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is not a source of funding for capital projects?

Accepted Answer

A)  Issuance of long term debt 
B)  Proceeds of dedicated taxes 
C)  Gifts from individuals or organizations 
D)  All of the above are sources of funding for capital projects. 
A)  Issuance of long term debt 
B)  Proceeds of dedicated taxes 
C)  Gifts from individuals or organizations 
D)  All of the above are sources of funding for capital projects.

Question 16

With respect to bond refunding,which of the following is false?

Accepted Answer

A)  Advanced refunding exists when the proceeds of a bond issue are placed in an escrow account pending the maturity date of the existing debt. 
B)  Advanced refunding will result in both the original and new debt to be reported in the fund statements. 
C)  Current refunding exists when new debt is issued to call the existing debt. 
D)  Bond refunding is often done to obtain better interest rates. 
A)  Advanced refunding exists when the proceeds of a bond issue are placed in an escrow account pending the maturity date of the existing debt. 
B)  Advanced refunding will result in both the original and new debt to be reported in the fund statements. 
C)  Current refunding exists when new debt is issued to call the existing debt. 
D)  Bond refunding is often done to obtain better interest rates.

Question 17

A special assessment tax is a tax levy that is assessed against only those taxpayers who are deemed to benefit from the service or project paid for by the proceeds of the special assessment levy.

Accepted Answer

A) True 
 B)False

Question 18

Budgets are typically not recorded for capital projects,debt service,and permanent funds.

Accepted Answer

A) True 
 B)False

Question 19

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.
-The amount of capital outlay expenditures reported by the capital projects fund would be:

Accepted Answer

A)  $3,060,000. 
B)  $3,030,000. 
C)  $3,000,000. 
D)  $2,970,000. 
A)  $3,060,000. 
B)  $3,030,000. 
C)  $3,000,000. 
D)  $2,970,000.

Question 20

Budgets are typically not recorded for Debt Service Funds.

Accepted Answer

A) True 
 B)False

The residual classification for funds other than the General Fund is Assigned.

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

Interest payments on bonds issued for capital projects are recorded in which account?

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 permanent fund.

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

At the inception of a capital lease agreement,

Which of the following statements about Special Assessments is correct?

Budgets are typically recorded for Special Revenue Funds.

Fund basis financial statements in which capital projects funds are reported are the Governmental Funds Balance Sheet and the Governmental Funds Statement of Revenues,Expenditures,and Changes in Fund Balances.

Encumbrance accounting is typically used for Permanent Funds.

When a government receives a gift that must be invested permanently and the investment proceeds are used to benefit the government or its citizens,it would be appropriate to account for that gift in a private purpose trust fund.

Investments of permanent funds should be reported at fair value,if determinable,and unrealized gains reported along with realized gains as "Investment Income-Net Increase in Fair Value of Investments."

Which of the following is not a source of funding for capital projects?

With respect to bond refunding,which of the following is false?

A special assessment tax is a tax levy that is assessed against only those taxpayers who are deemed to benefit from the service or project paid for by the proceeds of the special assessment levy.

Budgets are typically not recorded for capital projects,debt service,and permanent funds.

Budgets are typically not recorded for Debt Service Funds.

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Organizations

Overview of Financial Reporting for State and Local Governments

Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority

Accounting for the General and Special Revenue Funds

Proprietary Funds

Fiduciary Trustfunds

Government-Wide Statements, capital Assets, long-Term Debt

Advanced Topics for State and Local Governments

Accounting for Private Not-For-Profit Organizations

College and University Accounting

Accounting for Hospitals and Other Health Care Providers

Auditing, tax-Exempt Organizations, and Evaluating Performance

Financial Reporting by the Federal Government

Filters

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

The residual classification for funds other than the General Fund is Assigned.

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

Interest payments on bonds issued for capital projects are recorded in which account?

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 permanent fund.

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

At the inception of a capital lease agreement,

Which of the following statements about Special Assessments is correct?

Budgets are typically recorded for Special Revenue Funds.

Fund basis financial statements in which capital projects funds are reported are the Governmental Funds Balance Sheet and the Governmental Funds Statement of Revenues,Expenditures,and Changes in Fund Balances.

Encumbrance accounting is typically used for Permanent Funds.

When a government receives a gift that must be invested permanently and the investment proceeds are used to benefit the government or its citizens,it would be appropriate to account for that gift in a private purpose trust fund.

Investments of permanent funds should be reported at fair value,if determinable,and unrealized gains reported along with realized gains as "Investment Income-Net Increase in Fair Value of Investments."

Which of the following is not a source of funding for capital projects?

With respect to bond refunding,which of the following is false?

A special assessment tax is a tax levy that is assessed against only those taxpayers who are deemed to benefit from the service or project paid for by the proceeds of the special assessment levy.

Budgets are typically not recorded for capital projects,debt service,and permanent funds.

Budgets are typically not recorded for Debt Service Funds.

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Organizations

Overview of Financial Reporting for State and Local Governments

Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority

Accounting for the General and Special Revenue Funds

Proprietary Funds

Fiduciary Trustfunds

Government-Wide Statements, capital Assets, long-Term Debt

Advanced Topics for State and Local Governments

Accounting for Private Not-For-Profit Organizations

College and University Accounting

Accounting for Hospitals and Other Health Care Providers

Auditing, tax-Exempt Organizations, and Evaluating Performance

Financial Reporting by the Federal Government

Filters