(Multiple choice)
1. Several years ago a city established a sinking fund to retire an issue of general obligation bonds. This year the city made a $ 50,000 contribution to the sinking fund from general revenues and realized $ 15,000 in revenue from securities in the sinking fund. The bonds due this year were retired. These transactions require accounting recognition in which of the following funds? a. General Fund
b. Debt Service Fund
c. Debt Service Fund and General Fund
d. Capital Projects Fund, Debt Service Fund, and General Fund
e. None of the above
2. To provide for the retirement of general obligation bonds, a city invests a portion of its general revenue receipts in marketable securities. This investment activity should be accounted for in which of the following funds?
a. Trust Fund
b. Enterprise Fund
c. Special Assessment Fund
d. Special Revenue Fund
e. None of the above
3. As part of its process to legally adopt Brockton City’s General Fund budget for the year beginning January 1, 2013, the city council includes a portion of its existing fund balance as a budgetary resource to eliminate a projected excess of expected expenditures over estimated revenues. What will be the effect of the council’s action on Brockton City’s financial statements for the year ended December 31, 2012?
a. A cash overdraft
b. An increase in encumbrances
c. An increase in Assigned fund balance
d. A decrease in revenues
e. None of the above
4. Which of the following funds is used to account for the operations of a public library receiving the majority of its support from property taxes levied specifically for that purpose? (AICPA adapted)
a. General Fund
b. Special Revenue Fund
c. Enterprise Fund
d. Internal Service Fund
e. None of the above
5. A special tax was levied by Downtown City to retire and pay interest on general obligation bonds that were issued to finance the construction of a new city hall. Where are the receipts from the tax recorded?
a. Capital Projects Fund
b. Special Revenue Fund
c. Debt Service Fund
d. General Fund
e. None of the above
6. Which of the following funds use(s) modified accrual accounting?
a. All governmental- type funds
b. General Fund and Special Revenue Funds only
c. Only the General Fund
d. Only Debt Service Funds
e. None of the above
7. The current financial resources measurement is used to account for which of these?
a. All assets and liabilities
b. Financial assets and short- term liabilities in governmental- type funds
c. Capital assets and long- term liabilities recorded in governmental funds
d. The timing of the recognition of revenues and expenses
e. None of the above