ACC 410 Quiz 4
This quiz consist of 30 multiple choice questions. The first 15 questions cover the material in Chapter 6. The second 15 questions cover the material in Chapter 7.
Six years ago Hill City issued $10 million of 6% term bonds, due 30 years from the date of issue. Interest on the bonds is payable semi-annually on January 1 and July 1. Hill City has a September 30 fiscal year end. The amount of interest payable that would be included on the balance sheet for the debt service fund of
Sister City was notified by the State that they had been awarded a $6 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 project fund (assuming that the City maintains its books and records in a manner to facilitate the preparation of the fund financial statements)?
Adams County has outstanding $10 million in bonds issued by the County to construct a sewer system in a specific area of the county. The taxpayers in that area voted for the construction and the bonds and agreed to tax themselves to pay the principal and interest on the bonds. The County contracted for the construction and issued the bonds but the City assumed no legal or moral obligation for the bonds. If the special tax payments are not sufficient to make the required principal and interest payments, the County will not make up the difference. The $10 million of bonds should appear in which fund financial statements or schedule?
In which fund type would a governmental entity’s debt service fund be found?
The debt service fund of a governmental entity is accounted for using which of the following bases of accounting?
In which fund type would a governmental entity’s capital project fund be found?
Harbor City issued 6% tax-exempt bonds and used the proceeds to acquire federal government securities yielding 7%. After paying the interest on the tax-exempt bonds, the City cleared 1%. This is an example of
Sugar City issued $2 million of bonds to fund the construction of a new city office building. The bonds have a stated rate of interest of 5% and were sold at 101. Which of the following entries should be made in the Capital Project Fund to record this event?
Calhoun County makes annual transfers from the general fund to the debt service fund to pay principal and interest on long-term debt. When the County makes the transfer the entry in the debt service fund should be
A governmental entity has elected to issue new debt and use the proceeds to redeem existing debt because there is an economic gain in doing so. There is, however, an ‘accounting loss’ associated with these events. An accounting loss is defined as
Use of a Debt Service Fund is required
Calhoun County makes annual transfers from the general fund to the debt service fund to pay principal and interest on long-term debt. In the debt service fund, what is the appropriate entry when the principal payment is made?
The City of Williamsburg decided to defease old 6% bonds carried in its Electric Enterprise Fund with new 4.5% bonds. As a result of the defeasance, the City incurred an accounting loss. This loss should be recognized
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
Salt City issued $5 billion of bonds at face value to fund the reconstruction of the major interstate highways in and around their city. The bond underwriters withheld $2 million for underwriting fees and remitted the balance to the City. Assuming the City maintains its books and records in a manner that facilitates the preparation of fund financial statement, how would the underwriting fee be accounted for in the capital project fund?
A broker-dealer or other financial institution transfers cash to a government in exchange for securities and the government agrees to repay the cash plus interest and return the securities. From the government's point of view, this transaction is a
The City of Shiloh sold a used police car. The police car, which had a historical cost of $17,000 and a fair value of $12,000, was sold for $5,000. Assuming that the City maintains its books and records in a manner to facilitate the preparation of the fund financial statements, what is the appropriate entry in the General Fund to record this sale?
The objectives of financial reporting for fixed assets should be to provide information
Donated assets are reported at
GASB standards require that depreciation be reported on all capital assets except
Which of the following is NOT an infrastructure asset?
A governmental entity may record long-term assets in which of the following funds or account groups?
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?
Which of the following is NOT an example of a derivative?
Which of the following costs will be included in the cost of land on the government-wide financial statements?
Governments must classify bank balance in one of three categories. Which of the following is NOT one of those categories?
For a government that elects to capitalize its works of art and similar assets, the appropriate entry when receiving a contribution of a work of art at the government-wide level is
Investments, other than bank balances, must be classified into one of three categories. Which of the following is NOT one of those categories?
General fixed assets are excluded from governmental funds because
The risk that the other party to an investment will not fulfill its obligation is