Question;ACC410006VA016-1126-001 Government and Not-for-Profit Review Test Submission: Final Exam Part 1 Course Government and Not-for-Profit Test Final Exam Part 1 (Chapter 6 through 10) Instructions This final exam consist of 25 multiple choice questions and covers the material in Chapters 6 through 10. There are five questions from each Chapter. Question 1 Voters in Phillips City approved the construction of a new $10 million city hall building and approved a $10 million bond issue with a stated rate of interest of 6% to fund the construction. When the bonds were issued, they sold for 101. What are appropriate entries related to the premium? In the debt service fund Question 2 Voters in Phillips City approved the construction of a new $10 million city hall building and approved a $10 million bond issue with a stated rate of interest of 6% to fund the construction. When the bonds were issued, they sold for 101. What are appropriate entries related to the premium? In the capital project fund Question 3 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 Question 4 The debt service fund of a governmental entity is accounted for using which of the following bases of accounting? Question 5 With regard to the resources dedicated to the acquisition of fixed assets which will be used in general government activities, which of the following is true? Question 6 With regard to capitalization of infrastructure, which of the following is true? Question 7 If a government capitalizes works of art and similar assets, which of the following statements is true relative to depreciation on the works of art and similar assets? Question 8 The objectives of financial reporting for fixed assets should be to provide information Question 9 Governments must classify bank balance in one of three categories. Which of the following is NOT one of those categories? Question 10 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 Question 11 Debt that is issued by one entity but backed by the promise of another entity to make up any debt service deficiency is Question 12 Pulling County has a December 31 fiscal year-end. In November, the County borrowed $8 million from a local bank, due in six months at 6% interest, to finance general government operations. The county pledges property tax revenues to secure the loan. At year-end, how should the bank note be displayed in the fund financial statements? Question 13 The Southside City has $95 million of debt recorded in its Schedule of Changes in Long-Term Obligations, made up of $60 million of general obligation debt, $2 million of compensated absences payable, $8 million claims and judgments, and $25 million of obligations under capital leases. The State limits the amount of general obligation debt that can be issued by a City to 20% of the assessed value of taxable property. The assessed value of property in Southside City is $500 million. The amount of legal debt margin for Southside City is Question 14 In the government-wide financial statements, the assets acquired under a capital lease would be reported at Question 15 New City entered into a lease agreement for several new dump trucks to be used in general government activities. Assuming the City maintains its books and records in a manner that facilitates the preparation of the fund financial statements, acquisition of these dump trucks would require entries in which of the following funds and/or schedules? Question 16 Washington County has designated the general fund as the single fund to account for its self-insurance activities. What is the maximum amount that can be charged to expenditure in the general fund related to the self-insurance activities? Question 17 Which of the following is not a proprietary fund? Question 18 Lehi City has designated an internal service fund as the single fund to account for its self-insurance activities. Most of the insured activities such as the police department, fire department, and general government functions are accounted for in the General Fund. What is the maximum amount that can be charged to expenditure in the General Fund related to the self-insurance activities? Question 19 Which of the following is NOT a budget typically prepared for an activity accounted for in a proprietary fund? Question 20 During the year the City?s 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 Question 21 Which of the following would NOT be accounted for in a fiduciary fund of a governmental entity? Question 22 Required disclosure by a government General Fund related to its pension plan does NOT include which of the following? Question 23 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 financial statements, the special revenue fund will report Question 24 A plan?s unfunded actuarially accrued liability is the excess of Question 25 The Schedule of Changes in Long-Term Obligations contains an account Net Pension Obligation. Which of the following describes the event that gave rise to this account?
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