ACC 410 QUIZ 5 (1)

ACC 410 QUIZ 5 (1)

Author: Christine Farr


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?

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?

Obligations of property owners within a particular government for their proportionate share of debts of other governments with whom they share boundaries is

Which of the following funds is most likely to receive the proceeds of revenue bonds?

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?

In governmental fund-type  financial statements, the assets acquired under a capital lease would be reported at

Governmental entities enter into capital leases, rather than conventional buy and borrow arrangements for which of the following reasons?  Capital leases

Southwest City enters into a lease agreement that contains a nonappropriation clause.  The clause

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?

Sun City is located in Hailey County.  Sun Valley School District encompasses all of Sun City and some of Hailey County.  Property in Sun City is assessed at $400 million; property in Hailey County is assessed at $800 million; property in Sun Valley School District is assessed at $600 million.  The total debt outstanding for Sun City is $30 million; Hailey County is $50 million; Sun Valley School District is $45 million.  Compute the amount of direct and overlapping debt for Sun City.

Overlapping debt should be reported in which of the following ways?

A governmental entity that is unable to satisfy claims against it

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

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?

An obligation issued in the name of a government on behalf of a nongovernmental entity is called

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?

Which of the following is NOT a valid reason for governmental entities to engage in business-type activities?

The appropriate measurement focus for the business-type activities of the City of Rockford is

Cash flows from Operating Activities does NOT include which of the following as cash outflows?

Which of the following is NOT true about internal service funds as reported in the fund financial statements?

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

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