Question

what funding source would you first select for use with a capital projects fund and why? When are Debt Service Funds required and when might debt service on general long-term liabilities be reported for in other funds?

Answer 1

Capital project is a project that helps to maintain or improve acid often called infrastructure. To be included in the capital budget a project must meet one of the following requirements if it is a new construction expansion renovation or replacement project for an existing facility.

it is very nicely said that you should always do business with others money a capital project is a long term capital intensive investment project with the purpose to build upon add two or improve a Capital Asset.

A capital project finance by public funds offensive to build renovate or by equipment properties and parks infrastructure and information.

Other additional funding sources are bank loans existing cash Reserves companies operation budget and private funding. One should always use others money for example bank loan or private funding maximum amount for the capital project because debt financing ensure that the financial is able to recover funds if the Builder default on the loan.

Suppose if the capital project would not on much profit it would be in the hand of the person to pay of his expenses through his own cash to the bank and others there would be less chances of bankruptcy which is very high when a person is using its own fund show in my opinion the first source for capital project Shelby bank loans or private funding

B. A debt service fund is a cash reserve that is used to pay for the interest and principal payment on certain types of debt. The existence of a debt service fund is intended to reduce the risk of a security for investors which makes it more attractive to them and also reduces the effective rate needed to sell the offering however if types of a portion of the cash that the issue was received from the offering so that it cannot be applied to more useful Investments.

Debt might be used to be reported in other funds for amounts paid to settle long term claims and judgement liabilities associated with general long term liabilities and it does not guarantee and for which it is not obligated in any other manner.

It could be also reported as liabilities in the government activities column of the government .

It may be reported in a General or special revenue Fund with the bond liability presented in the long term liabilities adjustment column for government activities. For proprietary funding report both the bond liability on the balance sheet and the Debt service payments on the operating statements are presented in the long term liability adjustment

It may be used to report resources and payment of services for bonds associated with the loan program for government all activities.