When a governmental unit is primarily or secondarily liable for the debt, debt proceeds for special assessment obligations levied for the construction phase of a capital improvement project should be reported in which of the following fund types?
A) Special Assessment fund.
B) Capital projects.
C) Agency.
D) Debt service.

Question

Quizplus · Accepted Answer

If the government is liable, either primarily or secondarily, for the payment of special assessment debt in the event of default by the property owners, the transactions are handled if as if it were a government project. A capital projects fund should account for the proceeds of the debt and the construction expenditures.

When a Governmental Unit Is Primarily or Secondarily Liable for the Debt