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The resources to service all general long-term debts of the governmental entity are typically accounted for in
debt service fund
What type of fund may choose
to maintain a separate fund for each major project, or they may choose to combine two or more projects in a single fund.
Capital Projects fund
When are governments required to integrate budgetary account information in their debt service and capital projects funds
only when control cannot readily be established by means other than a budget.
How do capital project fund report long term obligations?
They don't report long-term obligations. Proceeds of bond or other long term obligations received by a capital projects fund are accounted for as other financing sources.
Do capital project funds account for cost incurred by capital asset outlays from construction in their fund?
Fund maintained to account for resources accumulated to pay interest and principal on general long-term debt—that is, long-term debt associated primarily with governmental activities.
Debt Service Fund
Non-exchange transactions similar to property tax levies
Interest paid on debt issued for public purposes by state and local governments is generally NOT subject
Capital projects funds are accounted for
Modified accrual basis
Debt service and capital project funds are found in which fund type?
Governmental Fund Type
Most appropriate fund in which to record the receipt of the bond proceeds?
Capital Projects Fund
Debt service fund is used for what type of payments
ALL bond debt service payments
When you act as an agent to service a debt what type of fund would you use?
What is issuing debt at a low int rate.
A service that primarily benefits a particular group or area where the individuals in that area/community vote and pay for a particular capital project.
The early retirement of existing debt so it can be REPLACED with new debt
An advance refunding where borrower economically but not legally satisfies their obligation, doesn't remove the old debt, but puts assets aside to pay for the principle.
Are general capital assets different from capital assets of a proprietary fund?
Yes, general capital assets are associated with the government as a whole rather than any specific fund and proprietary fund capital assets are usually held as investments.
General capital assets are _______ from the government because of the measurement focus
Reasoning because capital assets are reported as expenditures when the assets are acquired rather than capitalized.
Are capital assets cost reported as an EXPENSE when the assets are required?
No they are recorded as EXPENDITURES.
- Debit Expenditures
- Credit Cash
Can a government not depreciate infrastructure assets?
Yes, only is they can demonstrate they are preserving them at a specific condition
The objectives of financial reporting for fixed assets
should be to provide information
a) About a governmental entity’s physical resources.
- b) That can be used to assess the service potential of a
- governmental entity’s physical resources.
c) To help users assess a government’s long- and short-term capital needs
Governmental entity may record long-term assets in
which of the following funds or account groups?
Internal service funds.
Are general fixed assets excluded from the governmental fund?
Yes, because the measurement focus of governmental funds is on financial resources.
Sale of a long lived asset should resemble this entry
- Debit Cash
- Credit Other Financing Resources
Infrastructure Assets include
roads, sidewalks, bridges, tunnels, highways, lighting systems, drainage systems, water and sewer facilities and dams
Which type of capital asset does not require depreciation?
Infrastructure assets accounted for using the MODIFIED APPROACH
Modified approach for infrastructure is:
Costs to preserve infrastructure assets are expensed as incurred and disclosure of assessed condition is required
Who can receive protection under the federal bankruptcy code?
Government and businesses can
Designated Revenue Streams....
SECURE revenue debt
the obligation of the government at large and is thereby backed by the government’s general credit and revenue-raising powers.
General obligation debt
general long term debt is reported as what on the balance sheet
an inflow of of resources classified as other financing source on the operating statement.
Are capital leases reported in government financial statements
Why do governments enter into capital leases?
an effective means of circumventing debt limitations
Revenue bonds most likely received by what type of fund
Utilities enterprise fund
Obligations of property owners within a particular government for their proportionate share
of debts of other governments with whom they share boundaries are called
Debt that is issued by one entity but backed by the promise of another entity to make up
any debt service deficiency is
Moral Obligation Debt
In both the fund statements and the government-wide statements, business-type activities and internal service funds are on what type of basis and what type of focus
Full accrual and Economic Focus
Three basic statements for Proprietary funds
- Statement of net assets (b/s)
- Statement of reveneues, expenses and changes in fund net assets (i/s)
- Statement of Cash Flows
Gov wide and proprietary fund statements are usually reported because both statements are reported on
Yes full accrual
Statement of cash flows are used for governmental funds?
No, proprietary funds
The revenues of an internal service fund are...
the expenditures and expenses of other funds of that government.
The appropriate measurement focus for the business-type activities are and basis of accounting
economic resources, full accrual
Proprietary funds include
internal service and enterprise
Reasons a government engages in business type activities
service cheaper/efficient than a private firm
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