4 out of 4 points

The capital project fund of a governmental entity is accounted for using which of the
following bases of accounting?
Answer

Selected Answer:
Modified accrual basis.
Correct Answer:
Modified accrual basis.

Question 2
4 out of 4 points

Voters in Lincoln School District approved the construction of a new high school and
approved a $10 million bond issue with a stated rate of interest of 6% to fund the
construction. Bids were received and the low bid was $10 million. When the bonds
were issued, they sold for face value less bond underwriting fees of $.5 million. The
School Board voted to fund the balance of the construction by a transfer from the general
fund. The entry in the capital project fund to record the receipt of the bond proceeds
would be
Answer

Selected
Answer:

Debit Cash $9.5 million and Expenditures $.5 million; Credit Other
Financing Sources $10.
Correct
Answer:

Debit Cash $9.5 million and Expenditures $.5 million; Credit Other
Financing Sources $10.

Question 3
4 out of 4 points

A City issued bonds for the purpose of financing a major capital improvement. Which
fund is the most appropriate fund in which to record the receipt of the bond proceeds?
Answer

Selected Answer:
Capital Project Fund.
Correct Answer:
Capital Project Fund.

Question 4
4 out of 4 points

Sue City has outstanding $5 million in general term bonds used to finance the
construction of the new City Library. Sue City has a June 30 fiscal year-end. Interest at
6% 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, 1999 interest payment in the budget for the
fiscal year ended June 30, 1999. On June 30, cash was transferred from the General
Fund to the Debt Service Fund to make the required payment. The maximum amount of
interest payable that may be included on the balance sheet of the debt service fund of Sue
City at June 30 would be
Answer

Selected Answer:
$150,000.
Correct Answer:
$150,000.

Question 5
4 out of 4 points

Voters in Lincoln School District approved the construction of a new high school and
approved a $10 million bond issue with a stated rate of interest of 6% to fund the
construction. Bids were received and the low bid was $10 million. When the bonds
were issued, they sold for face value less bond underwriting fees of $.5 million. The
School Board voted to fund the balance of the construction by a transfer from the general
fund. The entry in the capital project fund to record the additional funding for the
construction would be
Answer

Selected
Answer:

Debit Due from General Fund $.5 million; Credit Other financing
Sources $.5 million.
Correct
Answer:

Debit Due from General Fund $.5 million; Credit Other financing
Sources $.5 million.

Question 6
4 out of 4 points

If a government elects the modified approach with regard to capitalization of

infrastructure
Answer
Selected
Answer:

Costs to preserve infrastructure assets are expensed as incurred and
disclosure of assessed condition is required.
Correct
Answer:

Costs to preserve infrastructure assets are expensed as incurred and
disclosure of assessed condition is required.

Question 7
4 out of 4 points

GASB standards require that depreciation be reported on all capital assets except
Answer

Selected Answer:
Infrastructure assets accounted for on the modified approach.
Correct Answer:
Infrastructure assets accounted for on the modified approach.

Question 8
4 out of 4 points

If a government capitalizes works of art and similar assets, which of the following
statements is true relative to depreciation on the works of art and similar assets?
Answer

Selected Answer:
All exhaustible assets must be depreciated.
Correct Answer:
All exhaustible assets must be depreciated.

Question 9
4 out of 4 points

Which of the following is NOT an example of a derivative?
Answer

Selected Answer:
Repurchase agreements.

Correct Answer:
Repurchase agreements.
Question 10
4 out of 4 points

General fixed assets are excluded from governmental funds because
Answer

Selected
Answer:

The measurement focus of governmental funds is on current financial
resources.
Correct
Answer:

The measurement focus of governmental funds is on current financial
resources.

Question 11
4 out of 4 points

New City entered into a lease agreement for several new dump trucks to be used in
general government activities. Assuming the City maintains its books and records in a
manner that facilitates the preparation of the fund financial statements, acquisition of
these dump trucks would require entries in which of the following funds and/or
schedules?
Answer

Selected
Answer:

General Fund, Schedule of General Fixed Assets AND Schedule of
General Long-Term Debt Obligations.
Correct
Answer:

General Fund, Schedule of General Fixed Assets AND Schedule of
General Long-Term Debt Obligations.

Question 12
4 out of 4 points

Industrial development bonds are issued in the name of a government with the proceeds
used to attract private businesses to a community. Which of the following is a true
statement about industrial development bonds?
Answer

Selected
Answer:

The proceeds are used by the private corporations and principal and
interest payments are made by the private corporation. The government
does not back the bonds in the event of default by the private corporation.
Correct
Answer:

The proceeds are used by the private corporations and principal and
interest payments are made by the private corporation. The government
does not back the bonds in the event of default by the private corporation.

Question 13
4 out of 4 points

An obligation issued in the name of a government on behalf of a nongovernmental entity
is called
Answer

Selected Answer:
Conduit debt.
Correct Answer:
Conduit debt.

Question 14
4 out of 4 points

Pulling County has a December 31 fiscal year-end. In November, the County borrowed
$8 million from a local bank, due in six months at 6% interest, to finance general
government operations. The county pledges property tax revenues to secure the loan. At
year-end, how should the bank note be displayed in the fund financial statements?
Answer

Selected
Answer:

General Fund--$8 million in Notes Payable; Nothing in a Schedule of
Changes in Long-Term Obligations.
Correct
Answer:

General Fund--$8 million in Notes Payable; Nothing in a Schedule of
Changes in Long-Term Obligations.

Question 15
4 out of 4 points

The Southside City has $95 million of debt recorded in its Schedule of Changes in Long-
Term Obligations, made up of $60 million of general obligation debt, $2 million of
compensated absences payable, $8 million claims and judgments, and $25 million of
obligations under capital leases. The State limits the amount of general obligation debt
that can be issued by a City to 20% of the assessed value of taxable property. The
assessed value of property in Southside City is $500 million. The amount of legal debt
margin for Southside City is
Answer

Selected Answer:
$ 40 million.
Correct Answer:
$ 40 million.

Question 16
4 out of 4 points

The appropriate basis of accounting for the proprietary funds of a governmental entity is
Answer

Selected Answer:
Full accrual.
Correct Answer:
Full accrual.

Question 17
4 out of 4 points

Which of the following are required basic statements of a proprietary fund?
Answer

Selected
Answer:

Statement of Net Assets, Statement of Revenues, Expenses, and
Changes in Fund Net Assets, and Statement of Cash Flows.
Correct
Answer:

Statement of Net Assets, Statement of Revenues, Expenses, and
Changes in Fund Net Assets, and Statement of Cash Flows.

Question 18
4 out of 4 points

Marsh Lake County operates a solid waste landfill that is accounted for in a
governmental fund. The County calculated this years portion of the total closure and
post closure costs associated with the landfill to be $600,000. The entry to record this
cost should be
Answer

Selected
Answer:

No entry in the fund; include $600,000 on the Schedule of Changes in
Long-Term Obligations.
Correct
Answer:

No entry in the fund; include $600,000 on the Schedule of Changes in
Long-Term Obligations.

Question 19
4 out of 4 points

The appropriate measurement focus for the business-type activities of the City of
Rockford is
Answer

Selected Answer:
Economic resources.
Correct Answer:
Economic resources.

Question 20
4 out of 4 points

During the year the Citys Self-Insurance Internal Service Fund billed the General Fund
$300,000 for premiums, of which $30,000 was for catastrophic losses and the balance
was the premium computed on an actuarially-determined basis. During the year the City
incurred $250,000 in claims losses. The total amount transferred to the Self-Insurance
Fund by the General Fund was $310,000. The amount the City Self-Insurance Fund can
recognize as revenue is
Answer

Selected Answer:
$300,000.
Correct Answer:
$300,000.

Question 21
4 out of 4 points

Which of the following activities of a governmental entity should be accounted for in a
fiduciary fund?
Answer

Selected
Answer:

Funds received from an individual who specified that the principal must
be kept intact but the income can be used to support families of police
officers killed in the line of duty.
Correct
Answer:

Funds received from an individual who specified that the principal must
be kept intact but the income can be used to support families of police
officers killed in the line of duty.

Question 22
4 out of 4 points

Which of the following is NOT a fiduciary fund?
Answer

Selected Answer:
Permanent funds.
Correct Answer:
Permanent funds.

Question 23
4 out of 4 points

Citizens within a defined geographic area of Hill City created a special assessment
district to facilitate the construction of sidewalks. Hill City was responsible for
overseeing the entire construction project. Hill City issued bonds in its own name to pay
the contractor for the construction. However, Hill City was not responsible in any
manner for the bonds. The bonds were secured by the special assessments which would
be levied against the property within the special assessment district. Collections of
special assessments would be recorded in which of the following funds of Hill City?
Answer

Selected Answer:
Agency Fund.
Correct Answer:
Agency Fund.

Question 24
4 out of 4 points

A governmental entity receives a gift of cash and investments with a fair value of
$200,000. The donor specified that the earnings from the gift must be used to beautify
city-owned parks and the principal must be re-invested. The $200,000 gift should be
accounted for in which of the following funds?
Answer

Selected Answer:
Permanent fund.
Correct Answer:
Permanent fund.

Question 25
4 out of 4 points

Permanent funds are classified as
Answer

Selected Answer:
Governmental funds.
Correct Answer:
Governmental funds.

Friday, June 20, 2014 1:54:40 PM EDT