Study your flashcards anywhere!

Download the official Cram app for free >

  • 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

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key

image

Play button

image

Play button

image

Progress

1/25

Click to flip

25 Cards in this Set

  • Front
  • Back

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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