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51.A capital projects fund might be used to account for which of the following activities? A.Maintaining sidewalks. B.Building a parking garage. C.Providing water and sewer services. D.Servicing long-term debt. 52.Which of the following is true regarding capital projects funds? A.Encumbrances accounting is employed. B.Encumbrances accounting is not normally employed, but Appropriations.
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Short Answer Questions 66.The following are key terms in Chapter 7 that relate accounting for the business-type activities of state and local governments: A. Allowance for Funds Used during Construction B. Revenue bonds C. Utility plant acquisition adjustment D. Regulatory accounting principles E. Original cost F. Historical cost G. General obligation bonds.
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41.Which of the following debt service fund accounts would not be closed at the end of each fiscal year? A.Estimated Revenues. B.Fund Balance. C.Revenues. D.Expenditures—Bond Interest. 42.The Town of Windsor issued the following during the year: (1) $600,000 in bonds for the installation of street lights, to be assessed against.
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68.The debt limit for general obligation debt for Milos City is 1 percent of the assessed property valuation for the city. Using the following information, calculate the city’s debt limit and debt margin. Assessed property valuation $10,863,511,000 Approved but unissued tax-supported debt10,000,000 Revenue bonds issued32,000,000 General obligation serial bonds issued43,000,000 Capital leases outstanding5,230,000 6-1 .
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71.Explain the essential differences between regular serial bonds, deferred serial bonds, annuity serial bonds, and irregular serial bonds. How do regular serial bonds differ from term bonds? 72."The entire debt arising from the acquisition of general capital assets under a capital lease agreement should be reported as debt of the.
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21.GASB requires the statement of cash flows for proprietary funds to be prepared using the direct method of presentation. 22.Unlike the General Fund and other major governmental funds for which a budget is legally adopted, proprietary funds are not required by GASB standards to record budgets in their accounting systems,.
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Essay Questions 69.A government's MD&A states that government-wide net position decreased as a result of the issuance of a long-term liability during the current reporting period. Does this sound correct? How does the issuance of long-term debt typically affect net position in the year of issuance? 70.How are general long-term liabilities.
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Multiple Choice Questions 31.Which of the following may properly be reported as a component of net position in the proprietary fund statement of net position? A.Retained earnings. B.Designated equity. C.Restricted net position. D.Contributed capital. 32.Which of the following properly portrays the components of net position for proprietary funds? A.Net investment in.
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41.The following general capital assets were owned by the Town of Otterville: Town buildings$3,250,000 Intangible assets1,000,000 Streets, sidewalks, and water lines2,000,000 What amount should be recorded as capital assets in the town's governmental activities accounts? A.$0. B.$3,250,000. C.$5,250,000 D.$6,250,000 42.Equipment that had been acquired several years ago by a special revenue fund at a.
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21.Term bond issues mature in installments. 22.Under a bond refunding, the proceeds of a new bond issuance are either deposited in escrow to pay the debt service on the outstanding bonds when due or used to promptly retire previously issued bonds. 23.The issuance of general long-term bonds is reported in.
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21.State laws often require that assets no longer needed in a capital projects fund be transferred to the fund that will service the debt incurred for the project, a debt service fund. 22.Streets, curbs, and sidewalks constructed or acquired through use of capital projects fund resources should never be reported.
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Multiple Choice Questions 26.Each of the following are reported as fiduciary funds except: A.A permanent fund. B.An investment trust fund. C.An agency fund. D.A private-purpose trust fund. 27.Which of the following statements regarding the financial reporting of agency funds is not true? A.Agency activities are reported only in the fiduciary fund.
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11.In regard to pass-through grants, a recipient government has administrative involvement if it is responsible for filing paperwork under a grant agreement. 12.When an investment pool is created, the assets of each fund entering the pool should be transferred to the pool at their fair value at the date of.
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True / False Questions 1.In accounting practice, the legalistic distinctions between trust funds and agency funds are not of major significance. 2.Trust funds often exist over a longer period of time than agency funds, represent and develop vested interests of a beneficiary to a greater extent, and involve more complex administration.
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True / False Questions 1.The use of long-term debt is a traditional part of the fiscal policy of state and local governments. 2.Although some governments have issued taxable debt, the interest earned on most debt issued by state and local governments is exempt from federal taxation and, in some states, from.
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74.What are the alternative methods of dissolving an internal service fund? 75.During the fiscal year ended September 30, 2017, the following transactions (summarized) occurred in the Town of Berthoud Information Technology Internal Service Fund: 1. Employees were paid $290,000 wages in cash. 2. Utility bills received from the Town of Berthoud’s.
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Short Answer Questions 66.The following key terms from Chapter 6 relate to accounting for general long-term liabilities and debt service: A. Legal defeasance B. Regular serial bonds C. In-substance defeasance D. Irregular serial bonds E. Debt limit F. Annuity serial bonds G. Debt margin For each of the following definitions, indicate the.
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89.During fiscal year 2017, the Town of Tonawanda issued purchase orders to various vendors in the amounts shown for the following functions of the town: General Government$82,500 Public Safety148,700 Public Works130,400 Culture and Recreation97,300 Health and Welfare94,800 Miscellaneous14,200 Total$567,900 All goods ordered during the year were received at the following actual costs: General Government$83,720 Public Safety147,940 Public Works131,140 Culture and Recreation98,780 Health and.
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59.Explain the purpose of the account "undistributed change in fair value of investments" used in a cash and investment pool. 60.Describe the types of pension plans most often found in governmental entities and the differences between them. 61.Briefly describe how GASB Statements 67 and 68 compare to prior pension accounting.
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11.A motor pool is a common example of an internal service fund. 12.An employee pension fund is a common example of an internal service fund. 13.Proprietary funds follow the current financial resources measurement focus and use the accrual basis of accounting. 14.Public utilities owned and operated by governments are common examples.
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70."Enterprise funds should not be permitted to accumulate unrestricted net position, since to do so would indicate overpricing of its services." Do you agree? Why or why not? 71.In some local government financial reports you will find activities such as solid waste disposal and sewage disposal accounted for as a.
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87.The following is a pre-closing trial balance for Sun City's General Fund as of June 30, 2017: DebitsCredits Cash$116,500 Taxes Receivable—Current29,000 Allowance for Uncollectible Current Taxes$3,000 Accounts Payable7,800 Due to Other Funds5,500 Tax Anticipation Notes Payable50,000 Fund Balance—Unassigned70,200 Budgetary Fund Balance1,000 Estimated Revenues100,000 Revenues102,000 Appropriations99,000 Expenditures93,000 Totals$338,500$338,500 What is the fund balance as of June 30, 2017, after all closing entries have been made? Show.
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11.Financial statement note disclosures on long-term liabilities should include information on authorization of new debt issues, sale of previously authorized issues, and retirement and refunding of debt during the year. 12.Notes to the financial statements of a state or local government should include a schedule, or summary, of debt service.
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Essay Questions 57.If a city has a responsibility for endowed resources, how would city management decide whether to account for the resources in a permanent fund or a trust fund? How does financial reporting of the funds differ? 58.Why do agency funds have no fund equity? What classes of accounts are.
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True / False Questions 1.General capital assets should be distinguished from capital assets that are specifically associated with activities financed by proprietary and fiduciary funds, since capital assets acquired by proprietary and fiduciary funds are accounted for by those funds. 2.GASB standards require that all governmental expenditures for long-lived assets be.
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68.How does the statement of cash flows under GASB standards differ from the statement of cash flows under FASB standards? 69.Legislators often believe an internal service fund function will not be subjected to annual legislative budget review and the legislature will "lose control" of the fund. Do you agree with.
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75.As of December 31, 2016, Westport had $9,500,000 in 4.5 percent serial bonds outstanding. The serial bonds pay interest semiannually on July1 and December 31, with $500,000 in bonds being retired on each interest payment date. Resources for payment of principal and interest are transferred from the General Fund. Prepare.
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51.When utility customers are billed during the year, the enterprise fund journal entry will include: A.A debit to Sales of Water. B.A debit to Cash - Restricted. C.A debit to Customer Accounts Receivable. D.All of the above. 52.When a new utility customer submits a deposit, the enterprise fund journal entry.
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61.A government experienced significant loss of certain roadways and bridges as a result of major flooding. Which of the following estimation approaches would be most useful in estimating the amount of asset impairment that has occurred? A.Deflated depreciated replacement cost approach. B.Service units approach. C.Restorative cost approach. D.None of the.
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True / False Questions 1.For proprietary funds, governments generally present a statement of net position in a format that displays assets, plus deferred outflows of resources, less liabilities, less deferred inflows of resources, equals net position. 2.A statement of cash flows is prepared for enterprise funds but not for internal service.
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Short Answer Questions 56.The following are key terms in Chapter 8 that relate to accounting for pension plans. A. Agent multiple-employer pension plan B. Cost-sharing multiple-employer pension plan C. Covered payroll D. Defined benefit plan E. Defined contribution plan F. Net pension liability G. Service cost H. Total pension liability For each of.
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46.Which of the following is the appropriate basis of accounting for an agency fund? A.Cash basis. B.Modified cash basis. C.Accrual basis. D.Modified accrual basis. 47.A donor contributed $500,000 to the city stipulating that the money be invested and that the earnings thereon be used for maintenance of the a band.
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90.The following transactions occurred for the City of Fontaine’s General Fund. 1. The budget prepared for the fiscal year included Total estimated revenues of $2,774,000 and appropriations of $2,693,000. 2. Encumbrances issued against the appropriations during the year were $931,000. 3. The current year’s tax levy of $2,005,000 was recorded; uncollectibles.
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Multiple Choice Questions 31.Which of the following would be considered a general capital asset? A.A vehicle purchased from General Fund revenues. B.A vehicle purchased and maintained by an enterprise fund. C.A computer purchased from revenues of an internal service fund and used by the supplies department. D.Real estate purchased with the.
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Short Answer Questions 76.The following key terms from Chapter 5 relate to general capital assets and capital projects: A. Bond anticipation notes B. Infrastructure assets C. Service Concession Arrangements D. General capital assets E. Capital projects funds F. Asset impairment G. Capital leases H. Operating leases I. Depreciation For each of the following.
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72.Explain the difference between operating revenues/expenses and nonoperating revenues/expenses. Why does the GASB require that operating revenues/expenses be reported separately on proprietary statements of revenues, expenses, and changes in fund net position? 73.Explain how capitalization of interest costs differs for enterprise funds as opposed to governmental funds. 7-1 .
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41.Which of the following is not true regarding proprietary funds? A.The difference between assets plus deferred outflows of resources and liabilities plus deferred inflows of resources of proprietary funds is called "net assets." B.Proprietary funds record long-term debt directly in the fund accounts. C.Proprietary funds record capital assets directly in.
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Multiple Choice Questions 31.Which of the following is not properly recorded in the governmental activities accounts? A.Tax-supported general obligation bonds. B.Obligations under capital leases used to finance general capital assets. C.The long-term portion of judgments and claims. D.Revenue bonds issued by an enterprise fund. 32.Which of the following statements regarding debt service funds is true? A.Given.
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11.One of the required general capital asset disclosures is a schedule of the additions to, and deductions from, general capital assets during the course of a fiscal year. 12.General capital assets acquired with capital projects fund resources would be recorded in essentially the same manner as if they had been.
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83.Prepare journal entries for the following related transactions in the fund and activity journals affected: 1. A capital projects fund issued $5,000,000, 4 percent bonds for $5,050,000 to finance improvements of a park. Premiums received are to be used to service the debt issue. 2. The Parks and Recreation Special Revenue.
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