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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
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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
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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.
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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.
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Do capital project funds account for cost incurred by capital asset outlays from construction in their fund?
No
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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
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Non-exchange transactions similar to property tax levies
Special Assessments
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Interest paid on debt issued for public purposes by state and local governments is generally NOT subject
Federal Taxes
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Capital projects funds are accounted for
Modified accrual basis
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Debt service and capital project funds are found in which fund type?
Governmental Fund Type
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Most appropriate fund in which to record the receipt of the bond proceeds?
Capital Projects Fund
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Debt service fund is used for what type of payments
ALL bond debt service payments
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When you act as an agent to service a debt what type of fund would you use?
Agent Fund
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What is issuing debt at a low int rate.
Arbitrage
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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.
Special Assessment
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The early retirement of existing debt so it can be REPLACED with new debt
Debt/Bond Refunding
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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.
In-Substance Defeasance
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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.
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General capital assets are _______ from the government because of the measurement focus
excluded
Reasoning because capital assets are reported as expenditures when the assets are acquired rather than capitalized.
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Are capital assets cost reported as an EXPENSE when the assets are required?
No they are recorded as EXPENDITURES.
- Debit Expenditures
- Credit Cash
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Can a government not depreciate infrastructure assets?
Yes, only is they can demonstrate they are preserving them at a specific condition
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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
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Governmental entity may record long-term assets in
which of the following funds or account groups?
Internal service funds.
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Are general fixed assets excluded from the governmental fund?
Yes, because the measurement focus of governmental funds is on financial resources.
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Sale of a long lived asset should resemble this entry
- Debit Cash
- Credit Other Financing Resources
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Infrastructure Assets include
roads, sidewalks, bridges, tunnels, highways, lighting systems, drainage systems, water and sewer facilities and dams
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Which type of capital asset does not require depreciation?
Infrastructure assets accounted for using the MODIFIED APPROACH
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Modified approach for infrastructure is:
Costs to preserve infrastructure assets are expensed as incurred and disclosure of assessed condition is required
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Who can receive protection under the federal bankruptcy code?
Government and businesses can
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Designated Revenue Streams....
SECURE revenue debt
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the obligation of the government at large and is thereby backed by the government’s general credit and revenue-raising powers.
General obligation debt
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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.
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Are capital leases reported in government financial statements
No
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Why do governments enter into capital leases?
an effective means of circumventing debt limitations
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Revenue bonds most likely received by what type of fund
Utilities enterprise fund
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Obligations of property owners within a particular government for their proportionate share
of debts of other governments with whom they share boundaries are called
Overlapping Debt
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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
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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
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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
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Gov wide and proprietary fund statements are usually reported because both statements are reported on
Yes full accrual
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Statement of cash flows are used for governmental funds?
No, proprietary funds
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The revenues of an internal service fund are...
the expenditures and expenses of other funds of that government.
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The appropriate measurement focus for the business-type activities are and basis of accounting
economic resources, full accrual
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Proprietary funds include
internal service and enterprise
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Reasons a government engages in business type activities
service cheaper/efficient than a private firm
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