ACC 410 FINAL EXAM - PART 1

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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

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

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

4.

The debt service fund of a governmental entity is accounted for using which of the following
bases of accounting?

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?

6.
7.

8.

With regard to capitalization of infrastructure, which of the following is true?

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?
The objectives of financial reporting for fixed assets should be to provide information

9.

Governments must classify bank balance in one of three categories. Which of the following
is NOT one of those categories?

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

11.

Debt that is issued by one entity but backed by the promise of another entity to make up any
debt service deficiency is

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?

13.

The Southside City has $95 million of debt recorded in its Schedule of Changes in LongTerm 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

14.

In the government-wide financial statements, the assets acquired under a capital lease would
be reported at

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?

16.

Washington County has designated the general fund as the single fund to account for its selfinsurance activities. What is the maximum amount that can be charged to expenditure in the
general fund related to the self-insurance activities?

17.

Which of the following is not a proprietary fund?

18.

Lehi City has designated an internal service fund as the single fund to account for its selfinsurance 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?

19.

Which of the following is NOT a budget typically prepared for an activity accounted for in a
proprietary fund?

20.

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

21.

Which of the following would NOT be accounted for in a fiduciary fund of a governmental
entity?

22.

Required disclosure by a government General Fund related to its pension plan does NOT
include which of the following?

23.

24.
25.

1.

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
A plans unfunded actuarially accrued liability is the excess of
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?