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The General Fund is always considered to be a major fund.When are other governmental funds considered major?

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Other governmental funds are considered ...

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With respect to financial reporting for governmental funds,which of the following statements is true?


A) A fund must be reported as a major fund if total assets, liabilities, revenues or expenses of the fund are at least 5% of the corresponding total for all governmental and enterprise funds combined.
B) GASB Statement 34 requires a balance sheet and statement of Revenues, Expenditures and Changes in Fund Balance for the General Fund and other governmental funds.
C) The General Fund must satisfy the criteria for a major fund to be categorized as such on the balance sheet.
D) A fund must be reported as a major fund if total assets, liabilities, revenues or expenses of the fund are at least 15% of the corresponding total for all governmental funds.

E) C) and D)
F) A) and D)

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Proceeds of debt issues should be recognized by a Capital Projects fund at the time the debt is authorized.

A) True
B) False

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Premiums generated from the issuance of bonds for a capital projects fund are generally:


A) Transferred to the General Fund.
B) Transferred to the debt service fund.
C) Retained in the capital projects fund.
D) None of the above

E) B) and C)
F) C) and D)

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Fund balances of debt service funds are classified as assigned or unassigned according to the categories identified in GASB Statement 54.

A) True
B) False

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Capital Project funds:


A) Are created for the repayment of long term debt.
B) Exist only for the duration of the project for which it is created.
C) Exist indefinitely and can account for several projects at once.
D) None of the above

E) C) and D)
F) A) and C)

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Use the following to answer the next six questions: During the fiscal year ended December 31, 2012, the City of Johnstown issued 6% general obligation serial bonds in the amount of $3,000,000 at 101 ($3,030,000) and used $2,970,000 of the proceeds to construct a fire station. The $30,000 premium was transferred to a debt service fund. The $30,000 left in the capital projects fund at the end of the project was transferred to the debt service fund. The bonds were dated April 1, 2012 and paid interest on October 1 and April 1. The first of 10 equal annual principal payments was due on April 1, 2013. -How would the $30,000 premium be accounted for?


A) As an other financing source in the debt service fund.
B) Amortized to interest expenditure in the debt service fund.
C) Both (a) and (b) above.
D) None of the above.

E) A) and B)
F) All of the above

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Cash provided by the General Fund for a capital project would be recorded in a capital projects fund as a (an) :


A) Revenue.
B) Other Financing Source.
C) Direct addition to Fund Balance.
D) Other Financing Use.

E) A) and B)
F) None of the above

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Write yes or no in each box to indicate whether each property applies to the following funds:

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When governments construct projects that are financed with special assessment debt,to be paid back by affected property owners,those projects would never be accounted for in capital projects funds.

A) True
B) False

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Which of the following is true regarding accounting for investments of permanent funds?


A) Investments with determinable fair values must be reported at fair value.
B) Gains and losses on investments would not be reported in the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances until realized by sale.
C) Both of the above are true.
D) Neither of the above is true.

E) B) and D)
F) C) and D)

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Which of the following is true regarding the governmental fund financial statements?


A) The General Fund is always a major fund and other governmental funds are considered major if total assets, liabilities, revenues, or expenditures are at least 10 percent of the corresponding totals of governmental funds and 5 percent of the corresponding totals for governmental and enterprise funds combined.
B) Nonmajor funds are reported in aggregate in a discrete column.
C) Both of the above are true.
D) Neither of the above is true.

E) A) and B)
F) B) and C)

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Unexpended resources transferred to the debt service fund from the General Fund would typically be classified as Restricted Fund Balance.

A) True
B) False

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Which two governmental funds are commonly used to acquire capital assets?


A) General Fund & Capital Projects Fund.
B) General Fund & Debt Service Fund.
C) Permanent Fund & Capital Projects Fund.
D) Capital Projects Fund & Debt Service Fund.

E) A) and B)
F) A) and C)

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If the government is primarily or secondarily liable for the payment of debt principal and interest for a special assessment project:


A) The tax levy and debt service expenditures should be recorded in an internal service fund.
B) A special revenue fund should account for the proceeds of the debt and construction expenditures.
C) The project is accounted for as if it were a governmental project.
D) The debt is not recorded in the government-wide statements.

E) B) and D)
F) C) and D)

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Bond refunding is repurchasing bonds from bondholders using residual money left over after a capital project has been completed.

A) True
B) False

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With respect to Capital Projects Funds,GASB standards require the accrual basis of accounting.

A) True
B) False

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Which of the following would be accounted for as a permanent fund?


A) A gift of $500,000 to a city, to be invested permanently, with the proceeds to be used to maintain the city cemetery.
B) A gift of $500,000 to a city, to be invested permanently, with the proceeds to be distributed as scholarships.
C) An intergovernmental grant of $500,000 to a city to be used for low income housing.
D) A gift of $500,000 to a city to be used for a new caretaker's residence at the local cemetery.

E) A) and C)
F) None of the above

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Newly constructed buildings are reported in a capital projects fund using which method?


A) Percentage completion method.
B) Completed project method.
C) Either A or B
D) Fixed assets are not capitalized in the capital projects fund

E) A) and B)
F) A) and C)

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The following description provides the best definition for which fund: Accounts for resources that are legally restricted and both earnings and principal may be used to support government programs.


A) Capital projects.
B) Special Revenue.
C) General Fund.
D) Permanent

E) A) and B)
F) None of the above

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