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Strayer ACC 410 Gov't, NonProfit Acc 410 Ch 8-9 Quiz 5

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Question;This quiz consist of 30 multiple choice questions. The first 15 questions cover the material in Chapter 8. The second 15 questions cover the material in Chapter 9. Be sure you are in the correct Chapter when you take the quiz. Question 1 Which of the following is likely to be used by a bond-rating agency to rate the general obligation bonds of a governmental entity? Question 2 In the government-wide financial statements, the assets acquired under a capital lease would be reported at Question 3 A state created a Housing Authority to provide financing for low-income housing. The Authority issues bonds and uses the proceeds for that purpose. Currently the Authority has outstanding $200 million in bonds backed by the State?s promise to cover debt service shortages should they arise. The State Constitution specifically limits the State to no more than $2 million in general obligation debt. How can the state officials defend the $200 million in debt outstanding? Question 4 A City entered into a long-term capital lease for some office equipment. Assuming the city maintains its books and records in a manner to facilitate preparation of fund financial statements, what entry would be made in the General Fund to record this event? Question 5 Southwest City enters into a lease agreement that contains a nonappropriation clause. The clause Question 6 Which of the following funds is most likely to receive the proceeds of revenue bonds? Question 7Governmental entities enter into capital leases, rather than conventional buy and borrow arrangements for which of the following reasons? Capital leases Question 8 Why would a government issue revenue bonds (which generally are issued at a higher rate of interest than general obligation bonds) even though the government knows that if revenues from the project are not sufficient to cover principal and interest payments, the government will use resources from general government activities to fund the principal and interest payments? Question 9 Industrial development bonds are issued in the name of a government with the proceeds used to attract private businesses to a community. Which of the following is a true statement about industrial development bonds? Question 10 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 11The 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 12A governmental entity that is unable to satisfy claims against it Question 13 An obligation issued in the name of a government on behalf of a nongovernmental entity is called Question 14In governmental fund-type financial statements, the assets acquired under a capital lease would be reported at Question 15 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? Question 16 A proprietary fund of a governmental entity has donor-restricted assets on its balance sheet. Which of the following best describes where and how those assets will generally be displayed? Question 17Which of the following is NOT a rationale/justification for reporting the business-type activities of a government in a separate fund? Question 18 The City of Brockton voted to establish an internal service fund to account for its printing services. The City transferred $500,000 cash from the General Fund to the newly created internal service fund. The appropriate entry in the General Fund to account for this transfer would be a credit to cash for $500,000 and a debit for $500,000 to Question 19Any internal service fund balances that are not eliminated in the consolidation process should generally be presented on the government-wide financial statements Question 20 Which of the following is not a proprietary fund? Question 21 which of the following is NOT a valid reason for governmental entities to engage in business-type activities? Question 22 On the fund financial statements, internal service activities should be presented Question 23 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 24 in the Statement of Net Assets, the net assets of a proprietary fund should be displayed in which of the following categories? Question 25 The appropriate basis of accounting for the proprietary funds of a governmental entity is Question 26 The appropriate measurement focus for the business-type activities of the City of Rockford is Question 27Cash flows from Operating Activities does NOT include which of the following as cash inflows? Question 28 A Statement of Revenues, Expenses, and Changes in Fund Net Assets should include which of the following in addition to operating revenues and operating expenses and ending Net Assets? Question 29In which of the following circumstances must an enterprise fund be used to account for the activity? Question 30 Marsh Lake County operates a solid waste landfill that is accounted for in a governmental fund. The County calculated this year?s portion of the total closure and post closure costs associated with the landfill to be $600,000. The entry to record this cost should be

 

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