• Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off
Reading...
Front

Card Range To Study

through

image

Play button

image

Play button

image

Progress

1/24

Click to flip

Use LEFT and RIGHT arrow keys to navigate between flashcards;

Use UP and DOWN arrow keys to flip the card;

H to show hint;

A reads text to speech;

24 Cards in this Set

  • Front
  • Back

A government opts to set aside $10 million of general fund resources to finance a new city hall. Construction is expected to begin in several years, when the city has been able to accumulate additional resources.


A. The government must account for the $10 million in a capital projects fund, and in its government-wide statements it must report the $10 million as "restricted."


B. The government may account for the $10 million in a capital projects fund, and in its government-wide statements it may report the $10 million as "restricted."


C. The government may not account for the $10 million in a capital projects fund, and in its government-wide statements it may not report the $10 million as "unrestricted."


D. The government may account for the $10 million in a capital projects fund, and in its government-wide statements it may not report the $10 million as "restricted."

D. The government may account for the $10 million in a capital projects fund, and in its government-wide statements it may not report the $10 million as "restricted."

A government should distinguish underwriting and other issue costs from bond premiums and discounts and in a governmental fund should


A. Report them as expenditures


B. Add them to the face value of the bond


C. Report them in a separate account and amortize them over the life of the bond


D. Deduct them from the bond premiums or add them to the bond discount

A. Report them as expenditures

When a government issues bonds at premiums or discounts and records the proceeds in a capital projects fund, it should


A. Transfer an amount equal to the premiums from the capital projects fund to a debt service fund, and an amount equal to the discounts from a debt service fund to the capital projects fund.


B. Transfer an amount equal to the premiums from the capital projects fund to a debt service fund, but make no transfer of an amount equal to the discounts from a debt service fund to the capital projects fund.


C. Make no transfers between the capital projects fund and a debt service fund


D. Transfer an amount equal to the discounts from a debt service fund to a capital projects fund, but make no transfer of an amount equal to the premiums from the capital projects fund to a debt service fund.

B. Transfer an amount equal to the premiums from the capital projects fund to a debt service fund, but make no transfer of an amount equal to the discounts from a debt service fund to the capital projects fund.

A city hold U.S. Treasury notes as an investment in a capital projects fund. During the year the market value of he notes increases by $50,000. Of this amount, $14,000 can be attributed to a decline in prevailing interest rates and $36,000 to interest that has been earned but not yet received. As of year-end, the city should recognize as revenue


A. $0


B. $14,000


C. $36,000


D. $50,000

D. $50,000

5. Which of the following accounts is least likely to be shown on the balance sheet of a debt service fund?


a. Bonds payable


b. Investments (at fair value)


c. Cash


d. Special assessments receivable

A. Bonds Payable

Special assessment debt should be reported on the balance sheet of a city if the debt is to be paid from assessments on property owners and


A. The city has guaranteed payment of the debt and probability of the city having to make good on the guarantee is >= 50%


B. The city has guaranteed payment of the debt but the probability of the city having to make good on the guarantee is remote.


C. The city has no legal responsibility for the debt, but in the past has made up for any property owner defaults.


D. All of the Above

D. All of the above

In its governmental fund statements a government should recognize revenue from special assessments


A. Entirely in the year in which the assessment is imposed


B. In the years in which the assessments are paid


C. In the years in which the assessments are due


D. In the years in which the assessments become available for expenditure

D. In the years in which the assessments become available for expenditure

In the year it imposes a special assessment, a government should recognize in its government-wide statements


A. The amount of the assessment, plus anticipated interest, as both revenue and an asset


B. The amount of the assessment as both revenue and an asset


C. Only the amount of the assessment due in the current year as revenue but the full amount of the assessment as an asset


D. Only the amount of the assessment due in the current year as both revenue and an asset

B. The amount of the assessment as both revenue and an asset

Under existing federal statutes, arbitrage as it applies to state and local governments


A. Is illegal


B. Is illegal unless the government can demonstrate a "just cause" for engaging in it


C. Is legal in some circumstances, but the government may be required to remit arbitrage earnings to the federal government


D. Is illegal unless there is no more than a 2 percent difference between interest earned and interest paid

C. Is legal in some circumstances, but the government may be required to remit arbitrage earnings to the federal government

Bond refundings are most likely to result in an economic gain when


A. The bonds are subject to arbitrage


B. There is an inverted yield curve


C. The bonds were initially issued at a premium


D. The bonds are subject to a call provision

D. The bonds are subject to a call provision

Which of the following items is least likely to appear on the balance sheet of a capital projects fund?


A. Cash


B. Investments


C. Construction in Progress


D. Reserve for Encumbrances

C. Construction in Progress

The fund balance of a debt service fund is most likely to be incorporated into the reporting entity's governement-wide statement of net position as


A. Net position, net investment in capital assets, (net of related debt)


B. Net position, restricted


C. Net position, unrestricted


D. Capital assets

B. Net position, restricted

The repayment of bond principal should be reported in the fund statements of a debt service fund as:


A. an expenditure


B. an other financing use


C. a reduction of bonds payable


D. a direct charge to fund balance

A. An expenditure

A state issues bonds at a premium, to finance road construction projects. The premium would effect:

D. "Net position, net investment in capital assets (net-related debt)" in the state's government-wide statement of net position

Encumbrances would not appear in which fund?


A. Capital Projects


B. Special Revenue


C. General


D. Enterprise

D. Enterprise

Which of the following transactions is an expenditure of a governmental unit's general fund?


A. Contribution of enterprise fund capital by the general fund


B. Operating subsidy transfer from the general fund to the enterprise fund


C. Routine employer contributions from the general fund to a pension trust fund


D. Transfer from the general fund to a capital projects fund

C. Routine employer contributions from the general fund to a pension trust fund

On March 1, Wag City issued $1,000,000, 10-year, 6% general obligation bonds at par with no bond issue costs. The bonds pay interest September 1 and March 1. What amount of interest expense and bond interest payable should Wag report in its government-wide financial statements (GWFS) at the close of the fiscal year on December 31?


A. Interest expense, $30,000; interest payable, $0.


B. Interest expense, $50,000; interest payable, $0.


C. Interest expense, $50,000; interest payable, $20,000.


D. Interest expense, $60,000; interest payable $10,000

C. Interest expense, $50,000; interest payable, $20,000.

Central County received proceeds from various towns and cities for capital projects financed by Central's long-term debt. A special tax was assessed by each local government, and a portion of the tax was restricted to repay the long-term debt of Central's capital projects. Central should account for the restricted portion of the special tax in which of the following funds?


A. Internal Service Fund


B. Enterprise Fund


C. Capital Projects Fund


D. Debt Service Fund

D. Debt Service Fund

An internal service provided and used by a state or local government:


A. is the internal counterpart to a nonexchange transaction


B. Results in expenditures or expenses to buyer funds and revenues to seller funds


C. Normally is displayed in the financial statements as a reimbursement


D. Requires recognition of an other financing source by the transferee fund an other financing use by the transferor fund

B. Results in expenditures or expenses to buyer funds and revenues to seller funds

Which capital assets must be depreciated in the government-wide financial statements?


A. All capitalized collections of works of art


B. All infrastructure assets


C. All noncapitalized collections of historical treasures


D. All capitalized collections that are exhaustible

D. All capitalized collections that are exhaustible

Which of the following capital assets are least likely to be considered infrastructure assets of a state or local government?


A. Buildings


B. Sewer Systems


C. Roads


D. Lighting Systems

A. Buildings

If a government reports eligible infrastructure assets using the modified approach,


A. Complete condition assessments must be performed annually


B. Expenditures for the assets are capitalized


C. No depreciation expense is required to be recognized


D. The assets are not being preserved at or above the established and disclosed condition level

C. No depreciation expense is required to be recognized.


Flac City recorded a 20-year building rental agreement as a capital lease. The building lease asset was reported as a noncurrent asset in Flac's government-wide financial statements. How should the lease liability be reported?


A. Capital lease obligation


B. Debt Service Fund


C. General Fund


D. A lease liability should not be reported

A. Capital Lease Obligation

When a snowplow purchased by a governmental unit is received, it should be recorded in the general fund as a(n)


A. Encumbrance


B. Expenditure


C. General Capital Asset


D. Appropriation

B. Expenditure