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25 Cards in this Set
- Front
- Back
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The capital projects fund of a government is accounted for using which of the following bases of accounting? a) Budgetary basis. b) Cash basis. c) Modified accrual basis. d) Accrual basis. |
C |
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In which fund type would a government’s capital projects fun d be found? a) Governmental fund type. b) Proprietary fund type. c) Fiduciary fund type. d) Governmental activities. |
A |
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The debt service fund of a government is accounted for usi ng which of the following bases of accounting? a) Budgetary basis. b) Cash basis. c) Modified accrual basis. d) Accrual basis. |
C |
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In which fund type would a government’s debt service fund be found? a) Governmental fund type. b) Proprietary fund type. c) Fiduciary fund type. d) Governmental activities. |
A |
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With regard to the resources dedicated to the acquisition of capital assets that will be used in general government activities, which of the following is true? a) Governments must maintain capital projects funds for resource s that are legally restricted to the acquisition of capital assets. b) Governments may maintain capital projects funds for resource s that are legally restricted to the acquisition of capital assets. c) Governments may account for any resources dedicated (whether legally or not) to the acquisition of capital assets in any of the governmental funds. d) Governments must account for all resources set aside for c apital asset acquisition in a capital projects fund. |
A |
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With regard to the resources dedicated to the acquisition of capital assets that will be used in general government activities, which of the following is true? a) Governments must maintain capital projects funds for resource s that are legally restricted to the acquisition of capital assets. b) Governments may maintain capital projects funds for resource s that are legally restricted to the acquisition of capital assets. c) Governments may account for any resources dedicated (whether legally or not) to the acquisition of capital assets in any of the governmental funds. d) Governments must account for all resources set aside for c apital asset acquisition in a capital projects fund. |
C |
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Sugar City issued $2 million of bonds to fund the const ruction of a new city office building. The bonds have a stated rate of interest of 5 percent a nd were sold at 101. Which of the following entries should be made in the capital projects fun d to record this event? a) Debit Cash $2.02 million; Credit Bonds payable $2 million and P remium on bonds payable $0.02 million. b) Debit Cash $2.02 million; Credit Bonds payable $2 million and O ther financing sources $0.02 million. c) Debit Cash $2.02 million; Credit Other financing sources $2.02 million. d) Debit Cash $2.02 million; Credit Other financing sources $2 m illion and Revenue $0.02 million. |
C |
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Voters in Lincoln School District approved the construction of a new high school and approved an $8 million bond issue with a stated rate of interest of 6 percent to fund the construction. Bids were received and the low bid was $8 million. When the bonds were issued, they sold for face value less bond underwriting fees of $0.5 million. The school bo ard voted to fund the balance of the construction by a transfer from the general fund. The entry in the capital projects fund to record the receipt of the bond proceeds should be a) Debit Cash $7.5 million; Credit Bonds payable $7.5. b) Debit Cash $7.5 million; Credit Other financing sources $7.5. c) Debit Cash $7.5 million and Expenditures $0.5 million; Credit Bonds payable $8 million. d) Debit Cash $7.5 million and Expenditures $0.5 million; Credit Other financing sources $8 million. |
D |
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Voters in Lincoln School District approved the construction of a new high school and approved an $8 million bond issue with a stated rate of interest of 6 percent to fund the construction. Bids were received and the low bid was $8 million. When the bonds were issued, they sold for face value less bond underwriting fees of $0.5 million. The school bo ard voted to fund the balance of the construction by a transfer from the general fund. The entry in the capital projects fund to record the additional funding for the construction should be a) Debit Due from general fund $0.5 million; Credit Other financ ing sources— nonreciprocal transfer-in $0.5 million. b) Debit Due from general fund $0.5 million; Credit Revenue $0.5 mi llion. c) Debit Cash $0.5 million; Credit Due to general fund $0.5 mi llion. d) Debit Other financing sources $0.5 million; Credit Due to gener al fund $0.5 million. |
A |
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Voters in Phillips City approved the construction of a new c ity hall building and approved a $5 million bond issue with a stated rate of interest of 6 percent to fund the construction. When the bonds were issued, they sold for 101. What are appropriate e ntries related to the premium? In the capital projects fund a) Debit Cash $50,000; Credit Revenues $50,000; no other entries req uired. b) Debit Cash $50,000; Credit Other financing sources—nonreciprocal transfer-in $50,000; no other entries required. c) Debit Cash $50,000; Credit Revenues; ALSO Debit Other financing uses—nonreciprocal transfer-out $50,000; Cr edit Cash $50,000. d) Debit Cash $50,000; Credit Other financing sources—Bond premium $50,000; ALSO Debit Other financing uses—nonreciprocal transfer-out $50,000; Cr edit Cash $50,000. |
D |
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Voters in Phillips City approved the construction of a new c ity hall building and approved a $5 million bond issue with a stated rate of interest of 6 percent to fund the construction. When the bonds were issued, they sold for 101. What are appropriate e ntries related to the premium? In the debt service fund a) Debit Cash $50,000; Credit Revenues $50,000; no other entries req uired. b) Debit Cash $50,000; Credit Other financing sources—nonreciprocal transfer-in $50,000; no other entries required. c) Debit Other financing sources—nonreciprocal transfer-out $50,000; credit Cash $50,000. d) No entry in the debt service fund. |
B |
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The voters in Ohio City approved the construction of a new ci ty hall building and approved a $10 million bond issue with a stated rate of interest of 6 percent to fund the construction. When the bonds were issued, they sold for 99. Assuming that the city has agreed to transfer money from its general fund to make up the difference, what are appropriate en tries related to the discount? In the capital projects fund a) Debit Due from general fund $100,000; Credit Revenues $100,000. b) Debit Due from general fund $100,000; Credit Other financing sources —nonreciprocal transfer-in $100,000; no other entries required. c) Debit Other financing uses—nonreciprocal transfer-out $100,000; Cre dit Cash $100,000. d) No entry in the capital projects fund. |
B |
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The voters in Ohio City approved the construction of a new ci ty hall building and approved a $10 million bond issue with a stated rate of interest of 6 percent to fund the construction. When the bonds were issued, they sold for 99. Assuming that the city has agreed to transfer money from its general fund to make up the difference, what are appropriate en tries related to the discount? In the debt service fund a) Debit Cash $100.000; Credit Revenues $100,000; no other entries req uired. b) Debit Cash $100,000; Credit Other financing sources—nonreciprocal transfer-in $100,000; No other entries required. c) Debit Other financing sources—nonreciprocal transfer-out $100,000; credit Cash $100,000. d) No entry in the debt service fund. |
D |
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Sister City was notified by the state that it has been awarded a $5 million grant to aid in the construction of a senior citizens center. At the time of the notification what is the appropriate entry in the capital projects fund? Assume that the city h as met all eligibility requirements and maintains its books and records in a manner to facil itate the preparation of fund financial statements. a) No entry at the time of the notification. b) Debit Grants receivable $5 million; Credit Revenue $5 mill ion. c) Debit Grants receivable $5 million; Credit Deferred infl ow of resources $5 million. d) Debit Grants receivable $5 million; credit Other financing sources—nonreciprocal transfer-in $5 million. |
B |
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Previously Rose City issued bonds with a face value of $10 million to construct a new city maintenance facility. Assume that the city maintain s its books and records in a manner that facilitates the preparation of fund financial statements. What is the appropriate entry when the city receives a progress billing from the contractor? a) Debit Building; Credit Cash. b) Debit Building; Credit Accounts payable. c) Debit Expenditures; Credit Accounts payable. d) No entry is required. |
C |
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Previously Atomic City had issued bonds with a face value o f $10 million to construct a new city hall. Because the money will not be needed for several months, the city invested the bond proceeds in U.S. Government securities. Assume that t he city maintains its books and records in a manner that facilitates the preparation of fund financial statements. What is the appropriate entry when the city receives interest on the i nvestments? a) Debit Cash; Credit Revenue. b) Debit Cash; Credit Other financing sources. c) Debit Cash; Credit Deferred inflow of resources. d) No entry required. |
A |
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Avon City issued bonds for the purpose of financing a major c apital improvement. Which fund is the most appropriate fund in which to record the rece ipt of the bond proceeds? a) General fund. b) Special revenue fund. c) Capital projects fund. d) Debt service fund. |
C |
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Use of a debt service fund is required. a) When financial resources are being accumulated for the pur pose of paying for capital asset acquisition. b) When financial resources are being accumulated for the pur pose of paying principal and interest when it matures. c) For all bonded debt service payments. d) For all debt service payments. |
B |
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Six years ago Hill City issued $10 million of 6 percent term bonds, due 30 years from the date of issue. Interest on the bonds is payable semi-annual ly on January 1 and July 1. Hill City has a September 30 fiscal year-end. The amount of interest payable that should be included on the balance sheet for the debt service fund of Hil l City at September 30 is a) $ -0-. b) $150,000. c) $300,000. d) $600,000. |
A |
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Several years ago, the City of Russell issued $7 million of 6 percent serial bonds at 101. Principal payments of $350,000 are due each June 30 for 20 years. In terest on the bonds is payable each December 31 and June 30. As of June 30, 2015, the ci ty has not paid the June 30 principal and interest payment. The amount of interest payable (assuming an outstanding bala nce of $4,000,000 of bonds) that should be included on the balance sheet for the debt s ervice fund of the City of Russell at June 30, 2015 is a) $ -0-. b) $168,000. c) $210,000. d) $420,000. |
C |
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Several years ago, the City of Russell issued $7 million of 6 percent serial bonds at 101. Principal payments of $350,000 are due each June 30 for 20 years. In terest on the bonds is payable each December 31 and June 30. As of June 30, 2015, the ci ty has not paid the June 30 principal and interest payment. The amount of bonds payable that should be included on the balance sheet for the debt service fund of the City of Russell at June 30, 2015 is a) $0. b) $350,000. c) $700,000. d) $3,150,000. |
B |
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Sue City has outstanding $5 million in general obligation term bonds used to finance the construction of the new City Library. Sue City has a June 30 fiscal year-end. Interest at 6 percent is payable each January 1 and July 1. The principal of the bonds is due 10 years in the future. The city budgeted the July 1, 2015 interest payment in the budget for the fiscal year ended June 30, 2015. On June 30, cash was transferred from the general fund to the debt service fund to make the required payment. The maximum a mount of interest payable that may be included on the balance sheet of the debt service fund of Sue City at June 30 is a) $ -0- b) $150,000. c) $300,000. d) $3,000,000. |
B |
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Lewis County uses a fiscal agent to distribute payments o f interest to bondholders. Interest payments are due on July 1 of each year. The fiscal agen t requires the county to transfer by June 20 the cash necessary to make the July 1 payments. How should Lewis County account for the amount tra nsferred on June 20 if the county maintains its books and records in a manner that facilit ates the preparation of fund financial statements? a) Debit Cash with fiscal agent and expenditures; Credit C ash and interest payable. b) Debit Cash with fiscal agent and interest expense; Cr edit Cash and interest payable. c) Debit Expenditures; Credit Cash. d) Debit Cash with fiscal agent; Credit Cash. |
B |
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Lewis County uses a fiscal agent to distribute payments o f interest to bondholders. Interest payments are due on July 1 of each year. The fiscal agen t requires the county to transfer by June 20 the cash necessary to make the July 1 payments. What entry should be made on July 1 related to the inte rest payment? a) Debit Interest payable; Credit Cash. b) Debit Interest payable; Credit Cash with fiscal agent. c) Debit Expenditure; Credit Cash with fiscal agent. d) No entry required. |
B |
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Cascade County issued $1 million of 6 percent term b onds at 101. These bonds will be used to finance the construction of highways. The entry in the debt service fund to record the receipt of cash should be a) Debit Cash $10,000; Credit Revenue, $10,000. b) Debit Cash $10,000; Credit Other financing sources—nonreciprocal transfer-in, $10,000. c) Debit Cash $1,010,000; Credit Bonds payable $1,000,000 and premium on bond s $10,000. d) Debit Cash $1,010,000; Credit Other financing sources—nonreciproca l transfer-in $1,010,000. |
A |
