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

Encumbrance accounting is only typically used for

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

With respect to Debt Service Funds, which of the following is true?

Budgets are typically not recorded for Special Revenue Funds.

Which of the following is a source of funding for capital projects funds?

Positive fund balances of capital projects funds are classified as nonspendable, restricted, committed, or assigned.

What amount would be reported as debt service expenditures for 2018?

The City of Dundee received a gift of $705,000 from a local resident on April 1, 2017 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, 2017. a) The gift was recorded on April 1. b) On April 1, 2017, XYZ Company bonds were purchased in the amount of $700,000, 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 $16,600 to a lawn service company. 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 $ 703,500, 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, 2017.

Which of the following is not true regarding permanent funds?

The fund balance of permanent funds should be classified as Nonspendable, Spendable and Committed.

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

Capital project funds

Because capital project, debt service and permanent funds use modified accrual accounting, these funds would typically record budgets.

Which of the following is true regarding capital projects funds?

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, 2018?

Grant proceeds received from the state for a capital project would be recorded in a capital projects fund of a city government as a an:

What is the difference between Permanent Funds and Private Purpose Trust Funds?

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:

Which of the following is a common source of funding for capital projects?

Permanent funds reflect resources that are restricted so that principal may not be expended and earnings are used to benefit the government or its citizenry.