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     16.     How should the account retained percentage on construction contracts be reported in the financial statements of a Capital Projects Fund?
          a.     as a revenue
          b.     as a liability
          c.     as an other financing source
          d.     as an asset


     17.     A city acquired two vehicles in a particular year: (1) a sedan for $20,000 that was paid for through the General Fund and (2) a sanitation truck for $125,000 that was paid for through the Capital Projects Fund. How should the assets be reported in the city's fund-level financial statements?
          a.     $145,000 should be reported as assets in the general fund
          b.     $20,000 should be reported as assets in the general fund and $125,000 should be reported as assets in the capital projects fund     
          c.     $145,000 should be reported as assets in the capital projects fund
          d.     neither acquisition should be reported as assets in the fund-level financial statements


     18.     Which of the following fund types is most likely to have the shortest "life"?
          a.     internal service
          b.     capital projects
          c.     enterprise
          d.     special revenue


     19.     A city constructs a new building by issuing debt in the amount of $3 million. How should the city report the debt proceeds in its Capital Projects Fund statement of revenues, expenditures, and changes in fund balance?
          a.     as a revenue
          b.     as an other financing source
          c.     as a liability captioned general long-term obligations
          d.     as a liability captioned due to the debt service fund

 

 

     
     20.     How should a fixed asset acquired through a capital lease agreement be recorded in a General Fund?
          a.     at the present value of the future lease payments, by debiting expenditures and crediting other financing sources - capital leases
          b.     at the total amount of the future lease payments, by debiting expenditures and crediting other financing sources - capital leases
          c.     at the present value of the future lease payments, by debiting expenditures and crediting capital leases payable.
          d.     no entry is needed until payments are actually made on the capital lease agreement.


     21.     A city acquires equipment on January 1, 2009 by means of a capital lease agreement. The agreement calls for paying the leasing company $300,000 in three $100,000 annual payments, starting December 31, 2009. The present value of the three lease payments, using a 6% interest rate, is $267,300. The city will make the lease payments from the Capital Projects Fund. What journal entry should the city make on January 1, 2009 in the Fund?
          a.     debit expenditures - capital outlay; credit other financing sources, for $300,000
          b.     debit expenditures - capital outlay; credit other financing sources, for $267,300
          c.     debit capital assets; credit capital leases payable, for $300,000
          d.     debit expenditures - capital outlay; credit capital leases payable, for $267,300


     22.     A Debt Service Fund accumulates resources to retire debt that is due in a lump sum in the year 2010. The Fund held marketable securities that cost $900,000 when purchased during 2002 and 2003. The securities had fair market values of $875,000 on January 1, 2009, and $930,000 on December 31, 2009. The average fair market value during the year was $895,000. At what amount should the Fund report the securities in its balance sheet on December 31, 2009?
          a.     $875,000
          b.     $895,000
          c.     $900,000
          d.     $930,000

 


     
     23.     Control of the activities of a debt service fund normally is established by which of the following mechanisms?
          a.     bond covenant provisions
          b.     budgetary accounting
          c.     legislative oversight and review
          d.     break-even analysis

 

     24.     The liability for long-term debt issued to finance a capital project will appear in which financial statement?
          a.     government-wide statement of net assets
          b.     capital projects fund balance sheet
          c.     debt service fund balance sheet
          d.     enterprise fund balance sheet

25.          The liability retained percentage--construction contracts payable most likely will appear in which financial statement?
          a.     government-wide statement of net assets
          b.     capital projects fund balance sheet
          c.     debt service fund balance sheet
          d.     special revenue fund balance sheet


26.          The largest dollar amount of resources flowing into a capital projects fund normally will come from
          a.     dedicated property taxes
          b.     user charges
          c.     bond proceeds
          d.     interest on investments

 

 

 


     
27.          The largest dollar amount of resources flowing into a debt service fund normally will come from
          a.     tax revenues and interfund transfers
          b.     interest on investments and user charges
          c.     fiscal agent fees and fines
          d.     liquidation of encumbrances


     28.     Which of the following is an example of a special assessment?
          a.     a separate fee on parks throughout the state to finance construction of nature walks
          b.     a separate charge on property tax bills sent to property owners within city business district to finance construction of new lighting within the district
          c.     an increase in property tax bills of all property owners to finance upgrade of county roads
          d.     an increased charge by city electric utility because of increase in charge by company from which it purchases power

     29.     Which of the following statements best summarizes the general rule regarding the fund (or funds) used to record receivables resulting from service-type special assessments?
          a.     service-type special assessments should be recorded in the special assessments fund
          b.     service-type special assessments should be recorded in the general fund
          c.     service type special assessments should be recorded in the fund that best reflects the nature of the transaction
          d.     service-type special assessments should be recorded in an internal service fund

 

 

 

 

 


     

     30.     A city finances its sidewalk improvement program by issuing debt, with the debt service to be paid by special assessments levied on affected homeowners. To help sell the bonds, the city asserts it will assume the debt service if any homeowners fail to pay their assessments. What fund or funds should be used to account for the special assessment transactions?
          a.     a special assessment fund
          b.     a capital projects fund and an agency fund
          c.     a public purpose trust fund
          d.     a capital projects fund and a debt service fund


     31.     A city issues special assessment bonds to finance a construction project. The city is not obligated in any manner to assume debt service payments if any homeowner defaults. The city collects the assessments from homeowners and forwards them to the Trustee to pay bondholders. In what fund should the city record collection and distribution of the special assessments?
          a.     agency fund
          b.     private purpose trust fund
          c.     debt service fund
          d.     special revenue fund

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