Inthe city hall capital projects fund, the proceeds of the general obligation bonds should becredited to:A.. For the fiscal year ended June 30, 2009, what amount should Cleveland's capit
Trang 1Chapter 18 Governmental Entities: Special Funds and Government-wide Financial
Statements
Multiple Choice Questions
Riviera Township reported the following data for its governmental activities for the yearended June 30, 2009:
Additional information available is as follows:
All of the long-term debt was used to acquire capital assets Cash of $475,000 is restricted fordebt service
1 Based on the preceding information, on the statement of net assets prepared at June 30,
2009, what amount should be reported for total net assets?
A $2,425,000
B $4,200,000
C $2,900,000
D $3,625,000
Trang 22 Based on the preceding information, on the statement of net assets prepared at June 30,
2009, what amount should be reported for net assets invested in capital assets, net of relateddebt?
A $4,200,000
B $2,900,000
C $2,825,000
D $3,300,000
3 Based on the preceding information, on the statement of net assets prepared at June 30,
2009, what amount should be reported for net assets, unrestricted?
C I and III only
D I, II, and III
5 A special revenue fund should be used in which of the following situations for a stategovernment?
A For sales taxes which are to be distributed to towns, cities, villages, etc of the state
B For the proceeds of general obligation bonds which are to be used to construct major lived fixed assets
Trang 3long-6 For which of the following funds are the principles and accounting most like those of thegeneral fund?
A Debt service fund
B Internal service fund
C Special revenue fund
D Investment trust fund
7 Which of the following items would not be reported on the financial statements of a specialrevenue fund?
A Long-term productive assets
B Expenditures and revenues
C Vouchers payable and unreserved fund balance
D Fund balance reserved for encumbrances and expenditures
8 A city's museum is supported by a special tax levy and by user charges The user chargesconstitute only 10 percent of the resources needed to support the operations of the museum Inwhich fund should the city account for its museum?
A An enterprise fund
B An agency fund
C An expendable trust fund
D A special revenue fund
9 A tax collection fund that collects property taxes and then distributes them to local
governmental units is an example of a(n):
A trust fund
B agency fund
C internal service fund
D permanent fund
Trang 410 Ponca City issued general obligation bonds to finance construction of a new city hall Inthe city hall capital projects fund, the proceeds of the general obligation bonds should becredited to:
A Revenue-General Obligation Bonds
B General Obligation Bonds Payable
C Deferred Revenue-General Obligation Bonds
D Other Financing Sources-Bond Issue Proceeds
11 The City of Fargo issued general obligation bonds to finance construction of a new firestation The bonds were issued at a premium In the fire station capital projects fund, thepremium should be transferred to:
A an agency fund
B a special revenue fund
C a debt service fund
D an expendable trust fund
12 The City of Fargo issued general obligation bonds to finance construction of a new firestation The bonds were issued at a discount Which of the following is true?
I The amount expended for the improvement must be decreased
II The general fund must make up the difference to the face value of the bonds
III A debt service fund must make up the difference to the face value of the bonds
Trang 514 When a capital projects fund transfers a premium from the issuance of general obligationbonds to another fund, the transfer should be accounted for as which type of interfund
obligation bonds What account should the debt service fund credit to record this receipt?
A Revenue-General Obligation Bond Premium
B Matured Bonds Payable
C Other Financing Sources—Transfer In from Capital Projects Fund
D Due to Capital Projects Fund
16 Upon completion of construction, and full payment of all construction costs in a capitalprojects fund, the entry to record the transfer of any remaining cash should include a debit to:
I Contract Payable-Retained Percentage
II Transfer Out to Debt Service Fund
A I only
B II only
C Either I or II
D Neither I nor II
Trang 617 On July 1, 2008, Cleveland established a capital projects fund to construct a new townhall Financing for construction came from the following sources:
Construction of the town hall was completed on June 15, 2009 For the fiscal year ended June
30, 2009, what amount should Cleveland's capital projects fund report for revenues on itsstatement of revenues, expenditures, and changes in fund balance?
A in the revenue section of the statement
B as a direct addition to the beginning balance of unreserved fund balance
C in the other financing sources (uses) section of the statement
D as a subtraction from construction expenditures
19 The capital projects fund of Hood River completed construction of an addition to its cityhall at a cost of $4,000,000 The city council approved payment of the amount due the generalcontractor, less a 10 percent retainage How should the capital projects fund account for the
10 percent retainage?
I As a credit of $400,000 to Deferred Revenue-Retained Percentage
II As a credit for $400,000 to Contracts Payable-Retained Percentage
A I only
B II only
C Either I or II
Trang 720 The capital projects fund of Hysham completed construction of a new building Thebuilding should be reported in the:
I government-wide statement of net assets
II capital projects fund
A Notes and warrants secured by specific tax revenues
B Special assessment bonds sold to acquire enterprise fund assets
C Notes and warrants
D Special assessment bonds may be used to finance capital projects
Trang 823 A debt service fund of Clifton received $100,000 from its general fund during the fiscalyear ended June 30, 2009 The cash was used to pay matured interest on Clifton's generalobligation bonds, which were issued to finance construction of a new municipal building Onthe statement of revenues, expenditures, and changes in fund balance prepared for the debtservice fund for the year ended June 30, 2009, the amount received from the general fundshould be reported as:
A revenue
B a reduction of expenditures
C an other financing source
D matured interest payments
24 What account is debited in a debt service fund when it records matured interest payable?
Trang 926 Arlington has a debt service fund which it uses to pay the principal and interest on its
$2,000,000 of general long-term debt Interest at 5 percent is due on October 1 and April 1
On October 1, 2008, and April 1, 2009, Arlington's debt service fund paid $50,000 of interestdue on its bonds On the balance sheet prepared on June 30, 2009, for Arlington's debt servicefund, interest payable should be reported at:
28 On October 15, 2008, an enterprise fund of Blacksburg purchased office supplies at a cost
of $10,000 The inventory of office supplies on hand at the June 30, 2009, fiscal year end was
$4,000 There was no beginning inventory Blacksburg should make entries that include:
A debiting Supplies $10,000 at October 15, and debiting Expenses $4,000 on June 30
B debiting Expenditures $10,000 at October 15, and debiting Supplies $4,000 at June 30
C debiting Supplies $10,000 at October 15, and crediting Supplies $6,000 on June 30
D debiting Expenditures $10,000 at October 15, and crediting Expenses $4,000 at June 30
29 A citizen of York purchased a truck in 2003 for $50,000 On June 10, 2009, she donatedthe truck to York The fair value of the truck on the date of donation was $30,000 Howshould York report the truck in its government-wide Statement of Net Assets?
A Machinery and equipment should be increased $50,000
B Machinery and equipment should be increased $30,000
Trang 1030 The general fund of Reston acquired computer equipment costing $70,000 during thefiscal year ended June 30, 2009 Machinery and Equipment should be reported in Reston'sGeneral Fund Balance Sheet and government-wide Statement of Net Assets at June 30, 2009,
32 The town of Decorah issued general obligation serial bonds at par to finance construction
of several new streets in the town Construction activity was accounted for in a capital
projects fund On the date the general obligation serial bonds were issued, what account wascredited in Decorah's capital projects fund?
A Serial Bonds Payable
B Due to Debt Service Fund
C Revenues
Trang 1133 What account should be debited in the debt service fund to recognize an installmentpayment currently due on general obligation serial bonds?
I Matured Bonds Payable
A Cash was credited for $50,000
B Due to General Fund was credited for $50,000
C Investments was credited for $50,000
D Reserve for Encumbrances was credited for $50,000
35 Which of the following financial statements would not be prepared for an enterprisefund?
A A statement of cash flows
B A statement of revenues, expenses, and changes in fund net assets
C A balance sheet
D A statement of revenues, expenditures, and changes in fund balance
36 The costs of enterprise fund activities are recovered
A from special tax levies
B from federal or state governmental grants
C by user charges
D by private donations
Trang 1237 Enterprise and internal service funds should recognize revenues when they are
A received in cash
B available and earned
C measurable and earned
D measurable and available
38 An enterprise fund of Grist was billed $10,000 for using the services of an internal servicefund's data processing center What account should Grist's enterprise fund debit to record thisbilling?
A Due to Internal Service Fund
B Expenditures
C Transfer Out to Internal Service Fund
D General Operating Expenses
39 During the fiscal year ended June 30, 2009, an enterprise fund of St Cloud acquiredcomputer equipment costing $110,000 on account and issued $400,000 of long-term bonds.Revenues of the enterprise fund will be used to repay bond interest and principal What effectdid these transactions have on St Cloud's enterprise fund assets and long-term debt?
A Option A
B Option B
C Option C
D Option D
Trang 1340 The following information pertains to Auburn's water and sewer fund, an enterprise fund,for the year ended June 30, 2009:
Based upon the information presented, what was the increase in the enterprise funds
unrestricted net assets for the fiscal year ended June 30, 2009?
A $200,000
B $240,000
C $300,000
D $320,000
41 Which of the following characteristics best describes an enterprise fund?
A Capital maintenance, revenues from general public user charges, and net income
B Operating budgets, expenditures, and tax revenues from general public
C Capital maintenance, revenues from user charges to other funds, and net income
D Capital maintenance, tax revenues from general public, and net income
42 On the statement of cash flows prepared for an internal service fund, cash received fromcustomers and cash paid for operating expenses should be reported as
A investing activities
B operating activities
C noncapital financing activities
D capital and related financing activities
43 Carlisle established a motor vehicle service and maintenance fund to service and maintainall cars and trucks owned by the town Revenues of the fund will only come from billings tothe funds which use the motor vehicle service and maintenance fund What type of fund is themotor vehicle service and maintenance fund?
A An enterprise fund
B A special revenue fund
C An expendable trust fund
Trang 1444 Which of the following fiduciary funds does not require a statement of changes in netassets?
I Private-purpose trust fund
II Agency fund
$40,000 At June 30, 2009, $10,000 of interest was earned, but it will not be received untilJuly of 2009 The fair value of the securities in which the $4,000,000 was invested had
Trang 1546 Refer to the above information On the statement of fiduciary net assets at June 30, 2009,the nonexpendable trust fund should report investments and interest receivable of:
A Option A
B Option B
C Option C
D Option D
47 A trust fund of Bruge City received $100,000 from a donor during the year ended June 30,
2009 During the year ended June 30, 2009, $94,000 of the cash received was used to providefood and clothing to the city's poor How should the trust fund report these resource flows onits statement of changes in fiduciary net assets for the year ended June 30, 2009?
A As revenues of $100,000 and as expenditures of $94,000
B As contributions for $100,000 and as deductions for benefits for $94,000
C As revenues of $100,000 and as an operating transfer out for $94,000
D As a transfer in from trust fund for $100,000 and as a transfer out for $94,000
48 Agency funds report:
A only assets and liabilities
B assets, liabilities, fund balance, revenues, and expenditures
C assets, liabilities, and fund balance
D only revenues and expenditures
Trang 1649 Government-wide financial statements prepared for a municipality include the following:
Trang 1751 Required financial statements of funds may include the following, among others:
The financial statements that should be issued by governmental funds and by proprietaryfunds include the following:
Trang 1853 A budgetary comparison schedule presented as required supplementary information forthe general fund should report variances for the difference between:
I Original budget amounts and final budget amounts
II Final budget amounts and actual amounts
II a special report on the governmental unit's internal control system
III a special report on the governmental unit's compliance with laws and regulations
Trang 1956 GASB 34 specifies two criteria for determining major governmental funds to be reportedseparately in the Governmental Fund Balance Sheet and Statement of Revenues,
Expenditures, and Changes in Fund Balances To be considered a major governmental fund, afund must:
A meet at least one criterion
B be the general fund or meet at least one criterion
C be the general fund or meet two criteria
D either A or C
An internal service fund had the following transactions during the year ended June 30, 2009,its first year of existence:
(1) Received $1,000,000 contribution from the general fund
(2) Acquired fleet of cars for $950,000, paying cash
(3) Billed departments in other funds $500,000 for using cars
(4) Incurred operating costs, exclusive of depreciation, of $240,000
(5) Depreciation expense amounted to $250,000
57 Refer to the above information On the internal service fund's balance sheet on June 30,
2009, total net assets should be reported at:
A $1,000,000
B $1,010,000
C $1,250,000
D $910,000
58 Refer to the above information On the internal service fund's balance sheet at June 30,
2009, net assets-unrestricted should be reported at:
A $260,000
B $310,000
C $550,000
D $1,250,000
Trang 2059 The statement of changes in fiduciary net assets includes all of the following except:
A employee benefit trust funds
B investment trust funds
C private-purpose trust funds
Trang 2161 Newport Village was recently incorporated and began financial operations on January 1,
2008, the beginning of its fiscal year The following transactions occurred during this firstfiscal year, January 1, 2008, to December 31, 2008:
1 The village council adopted a budget for general operations for the fiscal year endingDecember 31, 2008 Revenue was estimated at $650,000 Legal authorizations for budgetedexpenditures totaled $620,000
2 Property taxes were levied in the amount of $630,000; 3 percent of this amount was
estimated to prove uncollectible These taxes are available as of the date of levy to financecurrent expenditures
3 During the year, a village resident donated marketable securities valued at $75,000 to thevillage under the terms of a trust agreement which stipulates that the principal amount be keptintact The revenue generated by the securities is restricted to providing support to the villagelibrary Revenue earned and received on these amounted to $3,000 through December 31,2008
4 A general fund transfer of $8,000 was made to establish an internal service fund to providefor a permanent investment in inventory
5 The village decided to construct a small recreation facility through a special assessmentproject authorized to do so at a cost of $100,000 The city is obligated if the property ownersdefault on their special assessments Special assessment bonds were issued in the amount of
$90,000, and the first year's special assessment of $22,500 was levied against the village'sproperty owners The remaining $10,000 for the project will be contributed from the village'sgeneral fund
6 The special assessments for the lighting project are due over a four-year period, and thefirst year's assessments of $22,500 were collected The $10,000 transfer from the village'sgeneral fund was received by the lighting capital projects fund
7 A contract for $100,000 was let for the installation of the lighting The capital projects fundwas encumbered for the contract On December, 2008, the contract was completed and thecontractor was paid
8 During the year, the internal service fund purchased various supplies at a cost of $3,000
9 Current property taxes collected during the year was $615,000 Licenses and permit feescollected amounted to $15,000 The allowance for estimated uncollectible taxes is adjusted to
$15,000
Required:
Prepare journal entries to record each of these transactions in the appropriate fund or funds ofNewport Village for the fiscal year ended December 31, 2008 Use the following funds:general fund, capital projects fund, internal service fund, and private-purpose trust fund.Closing entries are not required Organize your answer using the following format:
Fund Journal Entry
Trang 2262 The City of Edmond established a capital projects fund for the construction of a readingroom for the City Library The estimated cost of the construction is $300,000 On January 1,
2008, an 8 percent, $200,000 bond issue was sold at 102 At that date, the county boardprovided a $100,000 grant On March 3, 2008, the premium from issuance of the bonds wastransferred to the debt service fund established to repay the bond principal and interest OnMarch 1, 2008, a general contractor's bid was accepted to construct the facility at a cost of
$270,000 The construction was completed on October 5, 2008; its actual cost was $285,000.The city council approved payment of the total actual cost of $285,000 In addition to the
$285,000, $9,000 was spent to make the facility ready for use On November 3, 2008, the citycouncil gave the final approval for both these payments After all bills were paid, the
remaining fund balance was transferred to the debt service fund
Required
a Prepare entries for the capital projects fund for 2008
b Prepare a statement of revenues, expenditures, and changes in fund balance for 2008 for thecapital projects fund
Trang 2363 Akron established an internal service fund for its data processing activities on July 1,
2008 During the fiscal year ended June 30, 2009, the following transactions and eventsoccurred:
1) On July 1, 2008, the city council authorized the general fund to contribute $1,000,000 tohelp establish the internal service fund on July 20, 2008
2) The internal service fund spent $900,000 of the contribution to acquire a mainframecomputer on July 25, 2008
3) During the year ended June 30, 2009, the internal service billed other funds of the city
$300,000 for use of the computer By year end, all of the billings were collected except for
Trang 2464 Required: For each transaction described below for the current fiscal year of the Town ofGolden, use an "x" to indicate the fund(s) in which a journal entry should appear, and whetherseparate information should be kept for General Long Term Debt or General Fixed Assets.
Trang 2565 Prior to closing the accounts at the end of the most recent fiscal year, the Town of Sonorareports the following amounts (in thousands):
Trang 26Chapter 18 Governmental Entities: Special Funds and Government-wide
Financial Statements Answer Key
Multiple Choice Questions
Riviera Township reported the following data for its governmental activities for the yearended June 30, 2009:
Additional information available is as follows:
All of the long-term debt was used to acquire capital assets Cash of $475,000 is restricted fordebt service
1 Based on the preceding information, on the statement of net assets prepared at June 30,
2009, what amount should be reported for total net assets?
A.$2,425,000
B $4,200,000
C.$2,900,000
D.$3,625,000
Trang 272 Based on the preceding information, on the statement of net assets prepared at June 30,
2009, what amount should be reported for net assets invested in capital assets, net of relateddebt?
3 Based on the preceding information, on the statement of net assets prepared at June 30,
2009, what amount should be reported for net assets, unrestricted?
C.I and III only
D I, II, and III
AACSB: Reflective Thinking
AICPA: Decision Making
Trang 285 A special revenue fund should be used in which of the following situations for a stategovernment?
A.For sales taxes which are to be distributed to towns, cities, villages, etc of the state
B.For the proceeds of general obligation bonds which are to be used to construct major lived fixed assets
long-C For gasoline taxes which are to be used exclusively to repair state roads and bridges.
D.For investments donated by a prominent citizen which are to be invested permanently, withincome being used to support homeless people
AACSB: Reflective Thinking
AICPA: Decision Making
6 For which of the following funds are the principles and accounting most like those of thegeneral fund?
A.Debt service fund
B.Internal service fund
C Special revenue fund
D.Investment trust fund
AACSB: Reflective Thinking
AICPA: Decision Making
7 Which of the following items would not be reported on the financial statements of a specialrevenue fund?
A Long-term productive assets.
B.Expenditures and revenues
C.Vouchers payable and unreserved fund balance
D.Fund balance reserved for encumbrances and expenditures
AACSB: Reflective Thinking
AICPA: Decision Making
Trang 298 A city's museum is supported by a special tax levy and by user charges The user chargesconstitute only 10 percent of the resources needed to support the operations of the museum Inwhich fund should the city account for its museum?
A.An enterprise fund
B.An agency fund
C.An expendable trust fund
D A special revenue fund
AACSB: Reflective Thinking
AICPA: Decision Making
9 A tax collection fund that collects property taxes and then distributes them to local
governmental units is an example of a(n):
A.trust fund
B agency fund.
C.internal service fund
D.permanent fund
AACSB: Reflective Thinking
AICPA: Decision Making
10 Ponca City issued general obligation bonds to finance construction of a new city hall Inthe city hall capital projects fund, the proceeds of the general obligation bonds should becredited to:
A.Revenue-General Obligation Bonds
B.General Obligation Bonds Payable
C.Deferred Revenue-General Obligation Bonds
D Other Financing Sources-Bond Issue Proceeds.
AACSB: Reflective Thinking
AICPA: Decision Making
Trang 3011 The City of Fargo issued general obligation bonds to finance construction of a new firestation The bonds were issued at a premium In the fire station capital projects fund, thepremium should be transferred to:
A.an agency fund
B.a special revenue fund
C a debt service fund.
D.an expendable trust fund
AACSB: Reflective Thinking
AICPA: Decision Making
12 The City of Fargo issued general obligation bonds to finance construction of a new firestation The bonds were issued at a discount Which of the following is true?
I The amount expended for the improvement must be decreased
II The general fund must make up the difference to the face value of the bonds
III A debt service fund must make up the difference to the face value of the bonds
A.I only
B.Either I or III
C.Either II or III
D Either I or II
AACSB: Reflective Thinking
AICPA: Decision Making
13 The costs of a building being constructed by a capital projects fund should be debited, orcharged, to which of the following accounts in the capital projects fund?
Trang 3114 When a capital projects fund transfers a premium from the issuance of general obligationbonds to another fund, the transfer should be accounted for as which type of interfund
AACSB: Reflective Thinking
AICPA: Decision Making
15 A debt service fund for the City of Madison received $50,000 from a capital projects fund.The amount received represented the premium received from the issuance of general
obligation bonds What account should the debt service fund credit to record this receipt?
A.Revenue-General Obligation Bond Premium
B.Matured Bonds Payable
C Other Financing Sources—Transfer In from Capital Projects Fund.
D.Due to Capital Projects Fund
AACSB: Reflective Thinking
AICPA: Decision Making
16 Upon completion of construction, and full payment of all construction costs in a capitalprojects fund, the entry to record the transfer of any remaining cash should include a debit to:
I Contract Payable-Retained Percentage
II Transfer Out to Debt Service Fund
A.I only
B II only
C.Either I or II
D.Neither I nor II
AACSB: Reflective Thinking
AICPA: Decision Making
Trang 3217 On July 1, 2008, Cleveland established a capital projects fund to construct a new townhall Financing for construction came from the following sources:
Construction of the town hall was completed on June 15, 2009 For the fiscal year ended June
30, 2009, what amount should Cleveland's capital projects fund report for revenues on itsstatement of revenues, expenditures, and changes in fund balance?
A $1,000,000
B.$1,500,000
C.$3,500,000
D.$14,500,000
AACSB: Reflective Thinking
AICPA: Decision Making
18 On the statement of revenues, expenditures, and changes in fund balance for a capitalprojects fund, proceeds of general obligation bonds should be reported:
A.in the revenue section of the statement
B.as a direct addition to the beginning balance of unreserved fund balance
C in the other financing sources (uses) section of the statement.
D.as a subtraction from construction expenditures
AACSB: Reflective Thinking
AICPA: Decision Making