Test
State & Local Govt - Long-term Liabilities and Debt Service
Preguntas del test (28)
1Which of the following basic financial statements contains a column for the total of all debt service funds?
- AStatement of cash flows.
- BStatement of revenues, expenditures, and changes in governmental fund balances.
- CStatement of revenues, expenses, and changes in proprietary net position.
- DNo basic financial statement contains a column for the total of all debt service funds.
2Which of the following financial statements are required for a Debt Service Fund?
- AStatement of net position only.
- BStatement of revenues, expenditures, and changes in fund balances only.
- CBalance sheet and statement of revenues, expenditures, and changes in fund balance.
- DBalance sheet, statement of revenues, expenditures, and changes in fund balance, and statement of cash flows.
3General obligation bonds issued for the benefit of enterprise funds, with the intent of paying bond principal and interest from revenues of the enterprise fund, should be reported as a liability in the balance sheet of the
- AEnterprise fund.
- BGovernmental activities.
- CBoth the enterprise fund and the governmental activities accounts.
- DEnterprise fund and a disclosure is added to the financial statement notes explaining the contingent liability of the general government if enterprise funds are insufficient to pay principal and interest.
4Which of the following resource inflows would be recorded as a revenue of a debt service fund?
- A Property taxes levied by the debt service fund for debt service purposes.
- BReceipt of the premium on a new bond issue.
- CTaxes collected by the General Fund and transferred to the debt service fund.
- DTransfer of the residual equity of a capital project from a capital projects fund to the debt service fund.
5Interest expenditures on bonds payable should be recorded in a debt service fund
- AAt the end of the fiscal period if the interest due date does not coincide with the end of the fiscal period.
- BWhen bonds are issued.
- CWhen the interest is paid.
- DWhen the interest is legally payable.
6The liability for general obligation bonds should be recorded in the
- AGeneral Fund.
- BCapital projects fund.
- CGovernmental activities journal.
- DDebt service fund.
7The city of New Haven issued $20 million of tax-supported bonds at 102 to finance a new prison. Upon issuance, how will the premium be recorded?
- AA $400,000 revenue to the capital projects fund and a $400,000 revenue in governmental activities.
- BA $400,000 revenue to the debt service fund and a $400,000 premium on bonds payable in governmental activities.
- CA $400,000 expenditure in the debt service fund and a $400,000 expense in governmental activities.
- DA $400,000 other financing source to the debt service fund and a $400,000 premium on bonds payable in governmental activities.
8Which of the following statements is not true for debt service funds?
- ASpecial assessment debt for which the government has some obligation is paid through the debt service fund.
- BInterest payable is reported as a liability of the debt service fund.
- CBond principal is shown as a liability of the debt service fund only when that principal is due and payable.
- DAll tax-supported bond principal is shown as a liability of the debt service fund.
9Which of the following debt service funds would normally have the largest balance in its Fund Balance account?
- ASerial bond debt service fund.
- BDeferred serial bond debt service fund.
- CIrregular serial bond debt service fund.
- DTerm bond debt service fund.
10Which of the following is a true statement regarding in-substance defeasance of bonds?
- AThe government must place cash or other assets in an irrevocable trust sufficient to pay all future interest and principal payments for the debt being defeased.
- BThe government must agree to maintain sufficient cash and investment balances in its debt service fund to cover all interest and principal payments for the debt being defeased.
- CThe government must pledge to transfer amounts to an escrow agent prior to the due date for each interest and principal payment for the debt being defeased.
- DThe government must agree to maintain sufficient unrestricted cash and investments in its governmental funds to cover all interest and principal payments for the debt being defeased.
11Which of the following liabilities is properly reported in the Governmental Activities column of the government-wide statement of net position?
- ATax-supported general obligation bonds.
- BThe long-term portion of compensated absences.
- CThe long-term portion of judgments and claims.
- DAll of the statements are correct.
12Jasper City issued $10,000,000 of bonds for a new water pumping station. Payment of principal and interest on these bonds will be made by the Water Utility Fund, an enterprise fund, from additional fees to be charged for water usage. Based on this information, which of the following is a correct statement about the liability for these bonds?
- AThis liability is a general long-term liability.
- BThis liability is not a liability of Jasper City. Therefore, it would not be reported in the basic financial statements but would be disclosed in the notes to the financial statements.
- CThis liability is a Water Utility Fund liability.
- DThis liability would be reported in the Governmental Activities column of the government-wide financial statements.
13Which of the following is not a general long-term liability disclosure requirement?
- AA schedule showing changes in long-term liabilities during the reporting period.
- BInformation concerning the sources used to pay principal and interest.
- CInformation about the amount of principal and interest due in future years.
- DInformation on the amount of the general long-term liability due within one year.
14Property owners in the City of Charleston pay property taxes that are earmarked, in part, to provide debt service for the outstanding debt of the city. Property owners in the city also provide debt service support for a share of the outstanding debt of Charles County and the Charleston Public School District, proportionate to the ratio of the assessed valuation of property located within the city to that of all taxable property in the county and the school district. The sum of the city's outstanding debt plus a proportionate share of the county and school district's debt is referred to as:
- AOverlapping debt.
- BLegal debt margin.
- CTotal direct debt.
- DTotal general obligation debt outstanding.
15The difference between the amount of the legal debt limit and the net amount of outstanding indebtedness subject to the limit is called the:
- ATotal direct debt.
- BAuthorized debt.
- CAssessed valuation subject to limitation.
- DDebt margin.
16A debt service fund is a:
- AFiduciary fund.
- BGovernmental fund.
- CSpecial purpose fund
- DProprietary fund.
17Which of the following resource inflows would properly be classified as revenue of a debt service fund?
- ATaxes collected by the General Fund and transferred to the debt service fund.
- BReceipt of the premium on a new bond issue.
- CReceipt of the interest earned on investments held in the debt service fund.
- DNone of the other statments should be classified as revenue of the debt service fund.
18Immediately after making its annual $30,000 lease payment on June 30, 2013, the last day of its fiscal year, a certain city had an unpaid capital lease obligation of $155,000. The interest rate applicable to the lease is 8 percent. When the $30,000 lease payment due on June 30, 2014, is made, the journal entry for the governmental activities accounts will include:
- AA debit to Capital Lease Obligation Payable in the amount of $30,000.
- BA debit to Capital Lease Obligation Payable in the amount of $17,600.
- CA Credit to Cash in the amount of $30,000.
- DBoth A debit to Capital Lease Obligation Payable in the amount of $17,600 and A Credit to Cash in the amount of $30,000 are correct.
19Which of the following budgetary accounts is least likely to be included in the general ledger of a debt service fund?
- AEncumbrances.
- BAppropriations.
- CEstimated Revenues.
- DEstimated Other Financing Sources.
20GASB standards recommend the use of:
- AA separate debt service fund for each debt to be serviced.
- BThe General Fund for all but the most complicated debt service.
- CAs few debt service funds as necessary, consistent with legal requirements.
- DDebt service funds for general obligation long-term debt and the General Fund for operating long-term debt.
21On June 1, 2013, the City of Columbus issued $5,000,000 of 5 percent tax-supported bonds. The bonds mature in 10 years and pay interest semiannually on June 1 and December 1, beginning on December 1, 2013. For the fiscal year ending December 31, 2013, the amount of interest expenditures to be recognized in the debt service fund is:
- A$0
- B$125,000.
- C$250,000.
- DUnable to calculate since it is unknown whether bonds were issued at premium or face.
22Culver City issued $1,000,000 of special assessment bonds. The city has warranted to bondholders that it will make interest and principal payments should taxpayers in the special assessment district default on the debt. To make debt service payments on this debt, the City will require taxpayers in the special assessment district to pay $100,000 per year for 10 years, plus 5 percent interest on unpaid installments. The first installment of $100,000 and related interest payment of $50,000 is due on December 31, 2013, the end of the fiscal year. The entry to record the receipts of the first installment and related interest on December 31, 2013, will include a:
- ACredit to Assessments Receivable—Current of $150,000 in the debt service fund.
- BCredit to Revenues of $50,000 in the debt service fund.
- CCredit to Assessment Receivable—Current of $150,000 in an agency fund.
- DCredit to Revenues of $50,000 in an agency fund.
23Which of the following debt service fund accounts would not be closed at the end of each fiscal year?
- AFund Balance.
- BExpenditures—Bond Interest.
- CRevenues.
- DEstimated Revenues.
24The City of Centralia issued $2,500,000 of Series B Refunding Bonds which, along with $700,000 of cash accumulated in a sinking fund, was used to redeem $3,200,000 of term bonds that had been outstanding for several years. To account for redemption of the term bonds will require a:
- ADebit to Other Financing Uses in the amount of $2,500,000 in the debt service fund.
- BDebit to Expenditures in the amount of $700,000 in the debt service fund.
- CDebit to Term Bonds Payable in the amount of $3,200,000 in the governmental activities journal at the government-wide level.
- DAll of the statements are correct.
25Over the past 10 years, Fairfield Township has accumulated $1,500,000 in a sinking fund pursuant to the covenants on a term bond issue. According to GASB standards, long-term sinking fund investments must be reported at:
- ACost.
- BLower of cost or market.
- CFair value.
- DIt depends on whether the investments are in equity or debt securities.
26Which of the following financial statements would contain a column for a debt service fund that was determined to be a major fund?
- AStatement of revenues, expenditures, and changes in fund balances—governmental funds.
- BStatement of cash flows—proprietary funds.
- CStatement of activities.
- DStatement of revenues, expenses, and changes in fund net position—proprietary funds.
27A serial bond issue in which no principal is repaid for several years, but thereafter an equal amount of principal is repaid each year is called a (an):
- ARegular serial bond issue.
- BDeferred serial bond issue.
- CAnnuity serial bond issue.
- DIrregular serial bond issue.
28An arrangement in which a city deposits cash or other assets in an irrevocable trust with an escrow agent to be used solely for satisfying future scheduled payments of both interest and principal of outstanding debt is known as a (an):
- AAdvance refunding.
- BRedemption in advance.
- CLegal defeasance.
- DIn-substance defeasance.
Información
- Descripción
- Chapter 6
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- turquoise_cat
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- English
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