29 Jun Question 21. Five trucks were leased by Pleasantvi
Question
21. Five trucks were leased by Pleasantville under terms qualifying as a capital lease. These trucks are to be used by the fire department. Where would the capital lease transaction be recorded? (Points : 2)
Internal service fund.
Special revenue fund.
Plant and equipment fund.
Governmental activities.
22. On June 1, 2012, Brooktown levied special assessments in the amount of $500,000, payable in 10 equal annual installments beginning on June 30, 2012. The assessment installments are intended to pay principal and interest on special assessment bonds for which the town has pledged its full faith and credit should assessments be insufficient. Assuming no allowance for uncollectible receivables, the journal entry in the debt service fund on June 1, 2012 would include: (Points : 2)
A debit to Assessments Receivable-Current for $500,000.
A debit to Assessments Receivable-Current for $50,000.
A credit to Revenues for $500,000.
No journal entry is made in the debt service fund because special assessments are used.
23. In 2011, Weaver City signed a contract in the amount of $6,000,000 for the construction of a new city hall. Expenditures were $4,000,000 in 2011 and $2,050,000 in 2012, which included a change to the original construction design in the amount of $50,000. What amount should be added to net capital assets in the governmental activities accounts in 2012? (Points : 2)
$6,000,000
$6,050,000
$2,050,000
$2,000,000.
24. The accrual basis of accounting applicable to proprietary fund types requires that exchange revenues be recognized when (Points : 2)
Earned.
Collected in cash.
Authorized by the budget ordinance.
Measurable and available.
25. The expenditure classification “City Attorney” is an example of which of the following types of classification? (Points : 2)
Function.
Organization unit.
Character.
Program.
26. On what should the government-wide financial statements report? (Points : 2)
Net assets and results of financial operations of the government as a whole.
Fiscal accountability.
The cost of government services.
Budgetary compliance.
27. Which of the following is true for debt service funds? (Points : 2)
A legally required budget should be recorded in the accounts.
A combining balance sheet may not be prepared for a comprehensive annual financial report (CAFR) when more than one debt service fund exists.
Encumbrance accounting is often used.
GAAP requires that a separate debt service fund be established for each bond issue.
28. Which of the following budgetary accounts is typically used by a debt service fund? (Points : 2)
Encumbrances.
Appropriations.
Estimated Uncollectible Accounts.
Reserve for Encumbrances.
29. Which of the following is not a budgetary account? (Points : 2)
Encumbrances.
Reserve for Encumbrances.
Estimated Revenues.
Appropriations.
30. When bonds are sold at a premium for a capital project, the premium amount generally (Points : 2)
Increases the cash available to the capital projects fund.
Is transferred to the debt service fund.
Is transferred to the General Fund.
Is ignored by both the capital projects fund and any other fund.
31. With regard to depreciation of general capital assets, which of the following statements is correct? (Points : 2)
Depreciation expense should be recorded in the appropriate governmental funds, and recorded in the governmental activities accounts.
Depreciation expense must be recorded in the governmental fund, but no depreciation expense is recorded in the governmental activities accounts.
No depreciation can be recorded in any governmental fund, but depreciation expense must be recorded in the governmental activities accounts.
No depreciation can be recorded in any governmental fund, nor is it permissible to record depreciation expense in the governmental activities accounts.
32. The account “Interfund Transfers In” would be classified in a General Fund statement of revenues, expenditures, and changes in fund balance as a(an) (Points : 2)
Revenue.
Other financing use.
Other financing source.
Current liability
33. Which of the following steps in the acquisition of goods and services by an activity accounted for by the General Fund generally occurs first? (Points : 2)
Disbursement.
Appropriation.
Encumbrance.
Expenditure.
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