ACC 410 FINAL PART 1

Download
1.

Voters in Lincoln School District approved the construction of a new high school and
approved a $10 million bond issue with a stated rate of interest of 6% to fund the construction.
Bids were received and the low bid was $10 million. When the bonds were issued, they sold for
face value less bond underwriting fees of $.5 million. The School Board voted to fund the
balance of the construction by a transfer from the general fund. The entry in the capital project
fund to record the additional funding for the construction would be

2.

3.

4.

5.

6.
7.
8.
9.
10.
11.
12.

The City of Williamsburg decided to defease old 6% bonds carried in its Electric Enterprise
Fund with new 4.5% bonds. As a result of the defeasance, the City incurred an accounting
loss. This loss should be recognized
Harbor City issued 6% tax-exempt bonds and used the proceeds to acquire federal
government securities yielding 7%. After paying the interest on the tax-exempt bonds, the City
cleared 1%. This is an example of
Salt City issued $5 billion of bonds at face value to fund the reconstruction of the major
interstate highways in and around their city. The bond underwriters withheld $2 million for
underwriting fees and remitted the balance to the City. Assuming the City maintains its books
and records in a manner that facilitates the preparation of fund financial statement, how would
the underwriting fee be accounted for in the capital project fund?
Calhoun County makes annual transfers from the general fund to the debt service fund to
pay principal and interest on long-term debt. When the County makes the transfer the entry in
the debt service fund should be
General fixed assets are excluded from governmental funds because
With regard to capitalization of infrastructure, which of the following is true?
For a government that elects NOT to capitalize its works of art and similar assets, the
appropriate entry when receiving a contribution of a work of art at the government-wide level is
If a government receives a donation of a work of art, the government must recognize revenue
Which of the following costs will be included in the cost of land on the government-wide
financial statements?
Which of the following is likely to be used by a bond-rating agency to rate the general
obligation bonds of a governmental entity?
Sun City is located in Hailey County. Sun Valley School District encompasses all of Sun City
and some of Hailey County. Property in Sun City is assessed at $400 million; property in Hailey
County is assessed at $800 million; property in Sun Valley School District is assessed at $600
million. The total debt outstanding for Sun City is $30 million; Hailey County is $50 million; Sun
Valley School District is $45 million. Compute the amount of direct and overlapping debt for
Sun City.

13.
14.

15.
16.
17.
18.

19.

20.
21.
22.

23.

24.
25.

26.

1.

In the government-wide financial statements, the assets acquired under a capital lease would
be reported at
The City of Pocahontas issued $20 million in general obligation bonds at par. The City
loaned the proceeds to Domsee Fish Processors to expand the size of their facility, which would
allow Domsee to hire additional workers. The loan payments from Domsee to the City are
established to match the principal and interest payments on the bond issue. The bonds are
payable exclusively from the loan repayments by Domsee. The bonds are secured by the
additional plant facilities built by Domsee. Where should the City report the bonds on the
annual financial report?
Southwest City enters into a lease agreement that contains a nonappropriation clause. The
clause
Over the long run, governmental internal service funds are intended to
Which of the following are required basic statements of a proprietary fund?
During the year the Citys Self-Insurance Internal Service Fund billed the General Fund
$300,000 for premiums, of which $30,000 was for catastrophic losses and the balance was the
premium computed on an actuarially-determined basis. During the year the City incurred
$250,000 in claims losses. The total amount transferred to the Self-Insurance Fund by the
General Fund was $310,000. The amount the City Self-Insurance Fund can recognize as
revenue is
The City issued $2 million in general obligation bonds to acquire a fleet of vehicles for the
Central Motor Pool Internal Service Fund At the date of issue, the appropriate entry in the
proprietary fund is a $ 2 million debit to cash and a $2 million credit to
Any internal service fund balances that are not eliminated in the consolidation process
should generally be presented on the government-wide financial statements
Required disclosure by a government General Fund related to its pension plan does NOT
include which of the following?
Previously a city received a $1 million gift, the income from which was restricted to support
maintenance of city-owned parks. During the current year the endowment earned $70,000 of
which $50,000 was transferred to the City Park Special Revenue Fund. On the year-end fund
financial statement, the endowment fund would report the $50,000 transferred to the Special
Revenue Fund as:
Citizens within a defined geographic area of Hill City created a special assessment district to
facilitate the construction of sidewalks. Hill City was responsible for overseeing the entire
construction project. Hill City issued bonds in its own name to pay the contractor for the
construction. However, Hill City was not responsible in any manner for the bonds. The bonds
were secured by the special assessments which would be levied against the property within the
special assessment district. Collections of special assessments would be recorded in which of
the following funds of Hill City?
A plans unfunded actuarially accrued liability is the excess of
Several years ago, a donor gave $5 million to the City and specified that the principal was to
be kept intact but the earnings were to be used to support operations of the city parks. During
the current year, the City earned $300,000 on the gift. To what type of fund should the City
transfer accountability for the $300,000 earnings.