Question

27) The Town of Greenfield issued the following during the year: (1) $600,000 in bonds for the installation of street lights, to be assessed against properties benefited, but secondarily backed by the town; (2) $800,000 in bonds for construction of a public golf course to be self-supported from fees collected from golf course users. How much should be accounted for through debt service funds for payments of principal over the life of the bonds?

A. $0.

B. $600,000.

C. $800,000.

D. $1,400,000.

28) On March 2, 2020, 20-year, 6 percent, general obligation serial bonds were issued at the face amount of $3,000,000. Interest of 6 percent per annum is due semiannually on March 1 and September 1. The first payment of $150,000 for redemption of principal is due on March 1, 2017. Fiscal year-end occurs on December 31. What is the interest expenditure reported in the debt service fund for the fiscal year ending December 31, 2020?

A. $90,000.

B. $135,000.

C. $150,000.

D. $180,000

            29) Which of the following may properly be reported as a component of net position in the proprietary fund statement of net position?   

A.	Retained earnings.
B.	Designated equity.
C.	Restricted net position.
D.	Contributed capital.

            30) Internal service funds should be used only if:

A. The reporting government funds the activity with general obligation debt.

B. The reporting government provides services primarily to external participants.

C. The reporting government provides services primarily to other departments of the same

      government.

D. The reporting government provides services below full cost.

           

            31) The comprehensive annual financial report (CAFR) of a government should contain a statement of revenues, expenses, and changes in fund net position for:

A. Both proprietary and governmental funds.

B. Proprietary but not governmental funds.

C. Governmental but not proprietary funds.

D. Proprietary and fiduciary funds.

            32) Under GASB standards, an internal service fund should prepare all of the following financial statements except a:

A.	Statement of revenues, expenditures, and changes in fund balance.
B.	Statement of revenues, expenses, and changes in net position.
C.	Statement of net position.
D.	Statement of cash flows.

Answer 1

27) The company should account for $ 6,00,000 Option B for through debt service funds for payments of principal over the life of the bonds since $ 8,00,000 are already supported by the amount collected by Golf Service users.

28) The interest expenditure reported in the debt service fund for the fiscal year ending December 31, 2020 is Option C - $ 150000

Working: $3,000,000 * 6% * (10 months/12 months)

29) Designated Equity Option B may properly be reported as a component of net position in the proprietary fund statement of net position

Explanation: The component of Net Position is the difference between assets, deferred outflows, deferred inflows, liabilities of proprietary funds that consists of Capital assets (Less) Accumulated Depreciation

30) Internal service funds should be used only if the reporting government provides services primarily to other departments of the same government Option C

Explanation: Internal Services funds are used to report an activity that provides services or goods to other funds, departments, or agencies to the country.

31) The comprehensive annual financial report (CAFR) of a government should contain a statement of revenues, expenses, and changes in fund net position for Proprietary but not Government Funds Option B

Explanation: The purpose of the Comprehensive Annual Financial Report (CAFR) is to provide accurate and meaningful information concerning the City's financial condition and performance.

32) Under GASB standards, an internal service fund should prepare all of the following financial statements except a Statement of revenues, expenses, and changes in net position Option B