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Chapter 6

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State & Local Govt - Long-term Liabilities and Debt Service

Questão 1 de 28

1

Which of the following basic financial statements contains a column for the total of all debt service funds?

Selecione uma das seguintes:

  • Statement of cash flows.

  • Statement of revenues, expenditures, and changes in governmental fund balances.

  • Statement of revenues, expenses, and changes in proprietary net position.

  • No basic financial statement contains a column for the total of all debt service funds.

Explicação

Questão 2 de 28

1

Which of the following financial statements are required for a Debt Service Fund?

Selecione uma das seguintes:

  • Statement of net position only.

  • Statement of revenues, expenditures, and changes in fund balances only.

  • Balance sheet and statement of revenues, expenditures, and changes in fund balance.

  • Balance sheet, statement of revenues, expenditures, and changes in fund balance, and statement of cash flows.

Explicação

Questão 3 de 28

1

General 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

Selecione uma das seguintes:

  • Enterprise fund.

  • Governmental activities.

  • Both the enterprise fund and the governmental activities accounts.

  • Enterprise 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.

Explicação

Questão 4 de 28

1

Which of the following resource inflows would be recorded as a revenue of a debt service fund?

Selecione uma das seguintes:

  • Property taxes levied by the debt service fund for debt service purposes.

  • Receipt of the premium on a new bond issue.

  • Taxes collected by the General Fund and transferred to the debt service fund.

  • Transfer of the residual equity of a capital project from a capital projects fund to the debt service fund.

Explicação

Questão 5 de 28

1

Interest expenditures on bonds payable should be recorded in a debt service fund

Selecione uma das seguintes:

  • At the end of the fiscal period if the interest due date does not coincide with the end of the fiscal period.

  • When bonds are issued.

  • When the interest is paid.

  • When the interest is legally payable.

Explicação

Questão 6 de 28

1

The liability for general obligation bonds should be recorded in the

Selecione uma das seguintes:

  • General Fund.

  • Capital projects fund.

  • Governmental activities journal.

  • Debt service fund.

Explicação

Questão 7 de 28

1

The 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?

Selecione uma das seguintes:

  • A $400,000 revenue to the capital projects fund and a $400,000 revenue in governmental activities.

  • A $400,000 revenue to the debt service fund and a $400,000 premium on bonds payable in governmental activities.

  • A $400,000 expenditure in the debt service fund and a $400,000 expense in governmental activities.

  • A $400,000 other financing source to the debt service fund and a $400,000 premium on bonds payable in governmental activities.

Explicação

Questão 8 de 28

1

Which of the following statements is not true for debt service funds?

Selecione uma das seguintes:

  • Special assessment debt for which the government has some obligation is paid through the debt service fund.

  • Interest payable is reported as a liability of the debt service fund.

  • Bond principal is shown as a liability of the debt service fund only when that principal is due and payable.

  • All tax-supported bond principal is shown as a liability of the debt service fund.

Explicação

Questão 9 de 28

1

Which of the following debt service funds would normally have the largest balance in its Fund Balance account?

Selecione uma das seguintes:

  • Serial bond debt service fund.

  • Deferred serial bond debt service fund.

  • Irregular serial bond debt service fund.

  • Term bond debt service fund.

Explicação

Questão 10 de 28

1

Which of the following is a true statement regarding in-substance defeasance of bonds?

Selecione uma das seguintes:

  • The 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.

  • The 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.

  • The 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.

  • The 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.

Explicação

Questão 11 de 28

1

Which of the following liabilities is properly reported in the Governmental Activities column of the government-wide statement of net position?

Selecione uma das seguintes:

  • Tax-supported general obligation bonds.

  • The long-term portion of compensated absences.

  • The long-term portion of judgments and claims.

  • All of the statements are correct.

Explicação

Questão 12 de 28

1

Jasper 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?

Selecione uma das seguintes:

  • This liability is a general long-term liability.

  • This 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.

  • This liability is a Water Utility Fund liability.

  • This liability would be reported in the Governmental Activities column of the government-wide financial statements.

Explicação

Questão 13 de 28

1

Which of the following is not a general long-term liability disclosure requirement?

Selecione uma das seguintes:

  • A schedule showing changes in long-term liabilities during the reporting period.

  • Information concerning the sources used to pay principal and interest.

  • Information about the amount of principal and interest due in future years.

  • Information on the amount of the general long-term liability due within one year.

Explicação

Questão 14 de 28

1

Property 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:

Selecione uma das seguintes:

  • Overlapping debt.

  • Legal debt margin.

  • Total direct debt.

  • Total general obligation debt outstanding.

Explicação

Questão 15 de 28

1

The difference between the amount of the legal debt limit and the net amount of outstanding indebtedness subject to the limit is called the:

Selecione uma das seguintes:

  • Total direct debt.

  • Authorized debt.

  • Assessed valuation subject to limitation.

  • Debt margin.

Explicação

Questão 16 de 28

1

A debt service fund is a:

Selecione uma das seguintes:

  • Fiduciary fund.

  • Governmental fund.

  • Special purpose fund

  • Proprietary fund.

Explicação

Questão 17 de 28

1

Which of the following resource inflows would properly be classified as revenue of a debt service fund?

Selecione uma das seguintes:

  • Taxes collected by the General Fund and transferred to the debt service fund.

  • Receipt of the premium on a new bond issue.

  • Receipt of the interest earned on investments held in the debt service fund.

  • None of the other statments should be classified as revenue of the debt service fund.

Explicação

Questão 18 de 28

1

Immediately 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:

Selecione uma das seguintes:

  • A debit to Capital Lease Obligation Payable in the amount of $30,000.

  • A debit to Capital Lease Obligation Payable in the amount of $17,600.

  • A Credit to Cash in the amount of $30,000.

  • Both 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.

Explicação

Questão 19 de 28

1

Which of the following budgetary accounts is least likely to be included in the general ledger of a debt service fund?

Selecione uma das seguintes:

  • Encumbrances.

  • Appropriations.

  • Estimated Revenues.

  • Estimated Other Financing Sources.

Explicação

Questão 20 de 28

1

GASB standards recommend the use of:

Selecione uma das seguintes:

  • A separate debt service fund for each debt to be serviced.

  • The General Fund for all but the most complicated debt service.

  • As few debt service funds as necessary, consistent with legal requirements.

  • Debt service funds for general obligation long-term debt and the General Fund for operating long-term debt.

Explicação

Questão 21 de 28

1

On 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:

Selecione uma das seguintes:

  • $0

  • $125,000.

  • $250,000.

  • Unable to calculate since it is unknown whether bonds were issued at premium or face.

Explicação

Questão 22 de 28

1

Culver 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:

Selecione uma das seguintes:

  • Credit to Assessments Receivable—Current of $150,000 in the debt service fund.

  • Credit to Revenues of $50,000 in the debt service fund.

  • Credit to Assessment Receivable—Current of $150,000 in an agency fund.

  • Credit to Revenues of $50,000 in an agency fund.

Explicação

Questão 23 de 28

1

Which of the following debt service fund accounts would not be closed at the end of each fiscal year?

Selecione uma das seguintes:

  • Fund Balance.

  • Expenditures—Bond Interest.

  • Revenues.

  • Estimated Revenues.

Explicação

Questão 24 de 28

1

The 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:

Selecione uma das seguintes:

  • Debit to Other Financing Uses in the amount of $2,500,000 in the debt service fund.

  • Debit to Expenditures in the amount of $700,000 in the debt service fund.

  • Debit to Term Bonds Payable in the amount of $3,200,000 in the governmental activities journal at the government-wide level.

  • All of the statements are correct.

Explicação

Questão 25 de 28

1

Over 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:

Selecione uma das seguintes:

  • Cost.

  • Lower of cost or market.

  • Fair value.

  • It depends on whether the investments are in equity or debt securities.

Explicação

Questão 26 de 28

1

Which of the following financial statements would contain a column for a debt service fund that was determined to be a major fund?

Selecione uma das seguintes:

  • Statement of revenues, expenditures, and changes in fund balances—governmental funds.

  • Statement of cash flows—proprietary funds.

  • Statement of activities.

  • Statement of revenues, expenses, and changes in fund net position—proprietary funds.

Explicação

Questão 27 de 28

1

A 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):

Selecione uma das seguintes:

  • Regular serial bond issue.

  • Deferred serial bond issue.

  • Annuity serial bond issue.

  • Irregular serial bond issue.

Explicação

Questão 28 de 28

1

An 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):

Selecione uma das seguintes:

  • Advance refunding.

  • Redemption in advance.

  • Legal defeasance.

  • In-substance defeasance.

Explicação

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