Acct 567 Week 4 midterm Latest version

Acct 567 Week 4 midterm Latest version

Author: Harvey Maxwell

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1. (TCO E) The City of Holland issued bonds on August 1, 2012. The interest on its bonds is paid from City of Holland Debt Service Fund on February 1 and August 1. Should the interest payable be accrued at December 31, the end of the city’s fiscal year? Why? Would you have a different answer if the interest payment dates were July 15 and January 15? Please explain.
2. (TCOs A and B) Under the following circumstances should a governmental entity use a Special Revenue Fund? A Capital Projects Fund? A Debt Service Fund?
3. (TCO D) The City of Ridgetown received a gift of $3,000,000 from a local resident on April 1, 2012 and signed an agreement that the funds would be invested on a permanent basis and the income would be used to maintain all of the city parks and recreation centers. The following transactions took place during the fiscal year ended Dec 31, 2012.
a. The gift was recorded on the books on April 1.
b. On April 1, 2012, the Talmadge Co. bonds were purchased in the amount of $3,000,000, at par. The bonds carry an annual interest rate of 6 percent, payable semiannually on October 1 and April 1.
c. On October 1, the semiannual interest was received.
d. From October 1 through December 1, payments were made totaling $43,000 to a lawn care and equipment service.
e. On December 31, an accrual was made for interest.
f. After a review of the bond market on December 31, 2012, the bonds had a market value of $2,982,000, exclusive of accrued interest.
g. The books were closed on December 31.

a. Record the transactions on the books Parks and Recreation Perpetual Care Fund.
b. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the Parks and Recreation Perpetual Care Fund for the year ended December 31, 2012.
c. Prepare the Balance Sheet for the Parks and Recreation Perpetual Care Fund for the year ended December 31, 2012.
1. (TCOs A and B) Which of the following fund statements will use the current financial resources measurement focus?
2. (TCOs A and B) Which of the following is included in the Required Supplementary Information Section of the Comprehensive Annual Financial Report?
3. (TCOs A and B) Proprietary funds use which of the following measurement focus and basis of accounting?
4. (TCOs B and C) Which of the following items would not be considered a nonexchange transaction for a state government?
5. (TCOs B and C) Which of the following is a true statement regarding modified accrual accounting?
6. (TCOs B and C) Which of the following accounts represents a budgetary account of a governmental fund?
7. (TCO E) When a government acquires general fixed assets under a capital lease agreement, how should the asset be recorded in the government-wide financial statements?
8. (TCO E) Which of the following items described below is not a source of funding for capital projects?
9. (TCO E) Which of the following statements is a true statement regarding the reporting of debt service funds?
10. (TCO D) Under GASB Statement No. 33, when would a special revenue fund be considered to have satisfied the eligibility requirement of a reimbursement type federal grant?

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