Question 1

When a capital project has been constructed entirely with bond proceeds and funds are left over at the end of the project,which of the following would normally take place?

Accepted Answer

When there are excess funds left over after the completion of a capital project that has been constructed entirely with bond proceeds, the excess funds would be transferred to a debt service fund. The capital projects fund would debit Other Financing Uses-Transfers Out, and the debt service fund would credit Other Financing Sources-Transfers In. This transfer ensures that the excess funds can be used to pay off the bond principal or interest in the future, and is in accordance with accounting principles.

Question 2

Which of the following would be accounted for as a permanent fund?

Accepted Answer

The answer of Which of the following would be accounted...

Question 3

Grant proceeds received from the state for a capital project would be recorded in a capital projects fund of a city government as a (an):

Accepted Answer

Grants, entitlements, or shared revenues received by a capital projects fund from another governmental unit are considered to be revenues of the capital projects fund.

Question 4

When a governmental unit is primarily or secondarily liable for the debt,debt proceeds for special assessments levied for the construction phase of a capital improvement project should be reported in which of the following fund types?

Accepted Answer

Debt proceeds for special assessments levied for the construction phase of a capital improvement project should be reported in the Capital Projects Fund type because it is related to the construction of a capital project. The General Fund is used for financing general government operations, Agency Funds are used for holding monies collected by the government in a custodial capacity, and Debt Service Funds are used to account for the service and repayment of debt.

Question 5

Debt service funds should use the same measurement focus and basis of accounting as:

Accepted Answer

Debt service funds are classified as special revenue funds and should use the same measurement focus and basis of accounting as special revenue funds. Internal service funds are used to account for services provided by one department to other departments within the same government entity, so they do not apply to debt service funds.

Question 6

Cash provided by the General Fund for a capital project would be recorded in a capital projects fund as a (an):

Accepted Answer

Cash provided by the General Fund for a capital project represents an inflow of resources to the capital projects fund, but it is not considered revenue since it is not earned by the fund. Instead, it should be recorded as an Other Financing Source, which indicates that it comes from a source other than the operations of the fund itself. Choices A and C are incorrect because revenue would be recognized if the capital projects fund earned income from activities such as selling bonds or collecting fees, but this is not the case with the General Fund providing cash. Choice D is incorrect because Other Financing Use would be used if the capital projects fund transferred money out to another fund or entity.

Question 7

What would be the amount of expenditures recorded by the debt service fund for the fiscal year ended December 31,2013?

Accepted Answer

The answer of What would be the amount of expenditures...

Question 8

Use the following to answer the next six questions:
During the fiscal year ended December 31, 2012, the City of Johnstown issued 6% general obligation serial bonds in the amount of $3,000,000 at 101 ($3,030,000) and used $2,970,000 of the proceeds to construct a fire station. The $30,000 premium was transferred to a debt service fund. The $30,000 left in the capital projects fund at the end of the project was transferred to the debt service fund. The bonds were dated April 1, 2012 and paid interest on October 1 and April 1. The first of 10 equal annual principal payments was due on April 1, 2013.
-How would the $30,000 premium be accounted for?

Accepted Answer

The premium on the bonds is an other financing source in the debt service fund.

Question 9

Which of the following is true regarding the governmental fund financial statements?

Accepted Answer

Both statement A and B are true. The Governmental Fund Financial Statements follow the criteria mentioned in statement A to determine major funds, and nonmajor funds are reported in aggregate in a discrete column as mentioned in statement B.

Question 10

Which of the following is true regarding capital projects funds?

Accepted Answer

Capital projects funds are governmental funds. Governmental funds use the modified accrual basis of accounting and the current financial resources measurement focus. Capital project funds record encumbrances and do not record fixed assets or depreciation.

Question 11

When a payment is due to a contractor from capital projects fund resources,the debit would be to:

Accepted Answer

The answer of When a payment is due to a...

Question 12

Which of the following should be accounted for in a permanent fund?

Accepted Answer

Permanent funds are established to hold funds permanently and the earnings/proceeds from the investment of the funds are used to support specific programs or purposes. Option A aligns with this purpose as the gift is to be invested permanently and the earnings from the investment should be used to maintain the city war memorials. The other options do not meet the criteria for a permanent fund as the gifts have specific purposes and timelines for expenditure.

Question 13

Use the following to answer the next six questions:
During the fiscal year ended December 31, 2012, the City of Johnstown issued 6% general obligation serial bonds in the amount of $3,000,000 at 101 ($3,030,000) and used $2,970,000 of the proceeds to construct a fire station. The $30,000 premium was transferred to a debt service fund. The $30,000 left in the capital projects fund at the end of the project was transferred to the debt service fund. The bonds were dated April 1, 2012 and paid interest on October 1 and April 1. The first of 10 equal annual principal payments was due on April 1, 2013.
-The amount of capital outlay expenditures reported by the capital projects fund would be:

Accepted Answer

The capital outlay expenditures reported by the capital projects fund would be the amount used to construct the fire station, which is $2,970,000.

Question 14

Use the following to answer the next six questions:
During the fiscal year ended December 31, 2012, the City of Johnstown issued 6% general obligation serial bonds in the amount of $3,000,000 at 101 ($3,030,000) and used $2,970,000 of the proceeds to construct a fire station. The $30,000 premium was transferred to a debt service fund. The $30,000 left in the capital projects fund at the end of the project was transferred to the debt service fund. The bonds were dated April 1, 2012 and paid interest on October 1 and April 1. The first of 10 equal annual principal payments was due on April 1, 2013.
-How would the $3,000,000 bond sale be recorded?

Accepted Answer

The bond sale would be recorded as an "other financing source" in the capital projects fund because the proceeds are used for constructing a capital asset, the fire station.

Question 15

A transfer from the General Fund to a debt service fund to make annual payments on principal and interest would be recorded in the debt service fund as a (an):

Accepted Answer

The journal entry would be a debit to cash and a credit to Other Financing Sources - Transfers In

Question 16

Which of the following is not true regarding permanent funds?

Accepted Answer

The answer of Which of the following is not true...

Question 17

Which of the following is true regarding accounting for investments of permanent funds?

Accepted Answer

Investments with determinable fair values must be reported at fair value in accordance with accounting standards for governmental funds.

Question 18

What would be the amount of expenditures recorded by the debt service fund for the fiscal year ended December 31,2012?

Accepted Answer

The answer of What would be the amount of expenditures...

Question 19

If bonds issued to fund a capital project are sold at a premium,the additional money received is:

Accepted Answer

When bonds are sold at a premium, the additional money received should be recorded as Other Financing Sources - Premium on Bonds in the capital projects fund. This premium amount should then be transferred from the capital projects fund to the debt service fund so that it can be used to reduce the amount of debt service payments required in future years. Therefore, both choices A and B are correct. There is no mention of transferring the premium from the capital projects fund to the General Fund in this scenario.

Question 20

Use the following to answer the next six questions:
During the fiscal year ended December 31, 2012, the City of Johnstown issued 6% general obligation serial bonds in the amount of $3,000,000 at 101 ($3,030,000) and used $2,970,000 of the proceeds to construct a fire station. The $30,000 premium was transferred to a debt service fund. The $30,000 left in the capital projects fund at the end of the project was transferred to the debt service fund. The bonds were dated April 1, 2012 and paid interest on October 1 and April 1. The first of 10 equal annual principal payments was due on April 1, 2013.
-How would the government account for the transfer of the unused bond proceeds?

Accepted Answer

The transfer of unused bond proceeds is recorded as an "other financing source" in the debt service fund and as an "other financing use" in the capital projects fund.

Quiz 5: Accounting for Other Governmental Fund Types: Capital Projects, debt Service, and Permanent

When a capital project has been constructed entirely with bond proceeds and funds are left over at the end of the project,which of the following would normally take place?

Which of the following would be accounted for as a permanent fund?

Grant proceeds received from the state for a capital project would be recorded in a capital projects fund of a city government as a (an) :

When a governmental unit is primarily or secondarily liable for the debt,debt proceeds for special assessments levied for the construction phase of a capital improvement project should be reported in which of the following fund types?

Debt service funds should use the same measurement focus and basis of accounting as:

Cash provided by the General Fund for a capital project would be recorded in a capital projects fund as a (an) :

What would be the amount of expenditures recorded by the debt service fund for the fiscal year ended December 31,2013?

Which of the following is true regarding the governmental fund financial statements?

Which of the following is true regarding capital projects funds?

When a payment is due to a contractor from capital projects fund resources,the debit would be to:

Which of the following should be accounted for in a permanent fund?

A transfer from the General Fund to a debt service fund to make annual payments on principal and interest would be recorded in the debt service fund as a (an) :

Which of the following is not true regarding permanent funds?

Which of the following is true regarding accounting for investments of permanent funds?

What would be the amount of expenditures recorded by the debt service fund for the fiscal year ended December 31,2012?

If bonds issued to fund a capital project are sold at a premium,the additional money received is: