1.Assume that the general fund of the city of Troy gives $200,000 to the City’s debt...

1.Assume that the general fund of the city of Troy gives $200,000 to the City’s debt service fund, to let the debt service fund pay for a principal payment on a long-term bond. There is no expectation that the money will ever be paid back to the general fund. The journal entry for the general fund would include a credit to cash, and a debit to

a		Receivable from debt service fund
b		Principal payment expense
c		Principal payment expenditure
d		Other uses of funds – transfer to debt service fund

2.Which of the following outflows would be recorded the same way under both modified accrual and full accrual? (By “the same”, I mean that one would record the same amount as an expenditure that the other records as an expense.)

a		Payment of $1 million for a new building
b		Payment one week after the end of the fiscal year for salaries earned during that year.
c		Depreciation on a building
d		Payment of $1 million to pay principal on an outstanding long-term loan

Solutions

Expert Solution

Q1 : Assume that the general fund of the city of Troy gives $200,000 to the City’s debt service fund, to let the debt service fund pay for a principal payment on a long-term bond. There is no expectation that the money will ever be paid back to the general fund. The journal entry for the general fund would include a credit to cash, and a debit to

Answer : ( D ) other uses of funds - transfer to debt service fund.

Q2 : 2.Which of the following outflows would be recorded the same way under both modified accrual and full accrual? (By “the same”, I mean that one would record the same amount as an expenditure that the other records as an expense.)

Answer : ( A ) Payment of $1 million for a new building

ekkarill92 answered 1 year ago

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