ACC 410 QUIZ 5 (2)

Download
1.

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

called

2.
3.
4.
5.
6.

7.

8.
9.
10.

11.
12.
13.

Debt that is issued by one entity but backed by the promise of another entity to make up any
debt service deficiency is
To seek protection under the Federal Bankruptcy Code, a governmental entity must
In governmental fund-type financial statements, the assets acquired under a capital lease
would be reported at
Which of the following is likely to be used by a bond-rating agency to rate the general
obligation bonds of a governmental entity?
The Southside City has $95 million of debt recorded in its Schedule of Changes in LongTerm 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
The City of Pocahontas issued $20 million in general obligation bonds at par. The City
loaned the proceeds to Domsee Fish Processors to expand the size of their facility, which would
allow Domsee to hire additional workers. The loan payments from Domsee to the City are
established to match the principal and interest payments on the bond issue. The bonds are
payable exclusively from the loan repayments by Domsee. The bonds are secured by the
additional plant facilities built by Domsee. Where should the City report the bonds on the
annual financial report?
Southwest City enters into a lease agreement that contains a nonappropriation clause. The
clause
In the government-wide financial statements, long-term liabilities of governmental entities are
generally reported at
A state created a Housing Authority to provide financing for low-income housing. The
Authority issues bonds and uses the proceeds for that purpose. Currently the Authority has
outstanding $200 million in bonds backed by the States promise to cover debt service
shortages should they arise. The State Constitution specifically limits the State to no more than
$2 million in general obligation debt. How can the state officials defend the $200 million in debt
outstanding?
A governmental entity that is unable to satisfy claims against it
Which of the following funds is most likely to receive the proceeds of revenue bonds?
In the government-wide financial statements, the assets acquired under a capital lease would
be reported at

14.

15.

16.
17.

18.

19.
20.
21.

22.
23.
24.
25.
26.
27.
28.

29.
30.

1.

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?
A City entered into a long-term capital lease for some office equipment. Assuming the city
maintains its books and records in a manner to facilitate preparation of fund financial
statements, what entry would be made in the General Fund to record this event?
The appropriate measurement focus for the business-type activities of the City of Rockford is
The City issued $2 million in general obligation bonds to acquire a fleet of vehicles for the
Central Motor Pool Internal Service Fund At the date of issue, the appropriate entry in the
proprietary fund is a $ 2 million debit to cash and a $2 million credit to
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 General Fund can recognize as expenditure
is
Cash flows from Operating Activities does NOT include which of the following as cash
inflows?
Any internal service fund balances that are not eliminated in the consolidation process
should generally be presented on the government-wide financial statements
Washington County has designated the general fund as the single fund to account for its selfinsurance activities. What is the maximum amount that can be charged to expenditure in the
general fund related to the self-insurance activities?
Which of the following is NOT a valid reason for governmental entities to engage in businesstype activities?
Cash flows from Operating Activities does NOT include which of the following as cash
outflows?
Over the long run, governmental internal service funds are intended to
On the fund financial statements, internal service activities should be presented
When a governmental enterprise fund has restricted assets on its balance sheet which of the
following is a true statement?
Which of the following is NOT a rationale/justification for reporting the business-type activities
of a government in a separate fund?\
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
In which of the following circumstances must an enterprise fund be used to account for the
activity?
Which of the following is NOT a budget typically prepared for an activity accounted for in a
proprietary fund?