Mountain View City is preparing its government-wide financial statements for the year. As of the year-end, the
Question:
Cost of capital assets acquired by governmental funds .. $1,450,000
Accumulated depreciation on the capital assets ..... 120,000
Outstanding debt related to the capital assets ..... 780,000
1. On the government-wide statement of net assets for the year-end, what amount should be reported for capital assets in the Governmental Activities column?
a. $550,000.
b. $780,000.
c. $1,330,000.
d. $1,450,000.
2. On the government-wide statement of net assets for the year-end, what amount should be reported for the capital assets in the net assets section?
a. $550,000.
b. $780,000.
c. $1,330,000.
d. $1,450,000.
3. In accordance with GASB 34, Basic Financial Statementsand Managements Discussion and Analysisfor State and Local Governments, which of the following is correct regarding the reporting of internal service funds?
I. The internal service fund should be discretely presented as part of the governments businesstype activities.
II. The internal service fund should be blended into the governmental activities.
a. I only.
b. II only.
c. I and II.
d. Neither I nor II.
During the year, the City of Vero Beach sold bonds in its capital projects fund. The 6 percent, $500,000 par bonds were sold for 102. The effective interest rate was 5 percent.
4. How should the bonds be reported in the reconciliation schedule for the statement of revenues, expenditures, and changes in fund balance?
a. A decrease of $500,000 for the par value of the bonds.
b. A decrease of $30,000 for the interest paid on the bonds.
c. A decrease of $510,000 for the selling price of the bonds.
d. Not shown in this reconciliation schedule.
5. How should an interest adjustment be shown in the reconciliation of the balance sheet of g overnmental funds to the statement of net assets for the year?
a. A decrease of $30,000.
b. A decrease of $25,000.
c. A decrease of $5,000.
d. Not shown in this reconciliation schedule.
6. For which of the following should the accrual basis of accounting be used to measure financial performance?
7. The City of Hastings has a separately elected school board that administers the citys schools. The city council must approve the school districts budget and tax levy. Its financial results should be reported in Hastingss financial statements in which way?
a. Included only as schedules in the footnotes of Hastingss financial reports.
b. Blended into Hastingss financial reports.
c. Discretely presented in Hastingss financial reports.
d. Not required to be presented in Hastingss financial reports.
8. Glen Valley City has properly adopted the modified approach to account for its infrastructure assets. Which of the following statements is correct about accounting for these assets on the government-wide statement of activities?
I. Depreciation expense should be computed based on the assets estimated useful lives and reported under the Governmental Activities column of the citys statement of activities.
II. The amount of the expenditures made for the infrastructure assets except for additions and improvements should be expensed in the period incurred.
a. I only.
b. II only.
c. I and II.
d. Neither I nor II.
9. For which of these funds is a statement of cash flows required
10. Which of the following is reported as a restriction of net assets in the net assets section of the statement of net assets?
a. A reservation of the fund balance in the general fund for $10,000 of encumbrances.
b. A requirement in the permanent funds that the $100,000 principal of a bequest be
maintained.
c. A governing boards decision that $15,000 of general fund resources should be assigned for planning for a city park.
d. A governing board allocation of $4,000 to establish an internal servicesfund.
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Step by Step Answer:
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker