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

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Question 1

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How should the acquisition of general fixed assets acquired by capital leases be accounted for?

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General fixed assets acquired by capital...

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Question 2

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Which of the following statements is false?

A) Resources representing supplies and prepaid items are classified in governmental funds as Nonspendable Fund balance.
B) Capital Projects, debt service and permanent funds do not typically record budgets.
C) Debt service and permanent funds do not record encumbrances.
D) Principal of permanent funds is classified as Committed Fund Balance

E) B) and D)
F) A) and C)

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Question 3

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Use the following to answer the next six questions: During the fiscal year ended December 31, 2014, the City of Johnstown issued 6% general obligation serial bonds in the amount of $3,000,000 at 102 ($3,060,000) and used $2,970,000 of the proceeds to construct a fire station. The $60,000 premium was transferred to a debt service fund. The $30,000 left in the capital projects fund at the end of the project was later transferred to the debt service fund. The bonds were dated April 1, 2014 and paid interest on October 1 and April 1. The first of 10 equal annual principal payments was due on April 1, 2015. -How would the government account for the transfer of the unused bond proceeds?

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

Only the General Fund has a positive Unassigned Fund Balance

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

The principal of permanent funds is classified as Nonspendable Fund Balance.

The current and long-term portions of General Long-term Debt are normally reported in a debt service fund.

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.

Major sources of funding for Capital Project Funds include the issuance of long term debt and grants from other governmental units.

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

Which of the following is true regarding capital projects funds?

What is the correct debit or credit for the following scenario: A contract was issued for the major part of work to be done by a private contractor in the amount of $1,200,000 for a new County court house?

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?

When governments construct projects that are financed with special assessment debt,to be paid back by affected property owners,those projects could be accounted for in capital projects funds.

Capital outlay expenditures of capital projects funds will typically result in additions to the general fixed assets reported in the government-wide Statement of Net Assets.

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

Which of the following lease criteria would not qualify a lease as a capital lease?

Capital project funds exist for the duration of the project for which it is created and are then closed.

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