Question

Multiple Choice Questions
Identify the best answer for each of the following:
1. The operations of a municipal government’s public library receiving the majority of its support from property taxes levied solely for that purpose should be accounted for in
a. The General Fund.
b. A Special Revenue Fund.
c. An Enterprise Fund.
d. An Internal Service Fund.

2. The proceeds of a federal grant made to assist in financing the future construction of an adult training center should be recorded in
a. The General Fund.
b. A Special Revenue Fund.
c. A Capital Projects Fund.
d. A Permanent Fund.

3. The receipts from a special tax levy to retire and pay interest on general obligation bonds issued to finance the construction of a new city hall should be recorded in a
a. Debt Service Fund.
b. Capital Projects Fund.
c. Revolving Interest Fund.
d. Special Revenue Fund.

4. The operations of a municipal swimming pool with debt secured solely by charges to users should be accounted for in
a. A Special Revenue Fund.
b. The General Fund.
c. An Internal Service Fund.
d. An Enterprise Fund.

5. The monthly remittance to an insurance company of the lump sum of hospital-surgical insurance premiums collected as payroll deductions from employees should be recorded in
a. The General Fund.
b. An Agency Fund.
c. A Special Revenue Fund.
d. An Internal Service Fund.

6. A municipality’s issuance of general obligation serial bonds to finance the construction of a fire station requires accounting recognition in the
a. General Fund.
b. Capital Projects and General Funds.
c. Capital Projects Fund and the General Capital Assets and General Long-Term Liabilities accounts.
d. General Fund and the General Capital Assets and General Long-Term Liabilities accounts.

7. Expenditures of $200,000 were made during the year on the fire station in the previous question. This transaction requires accounting recognition in the
a. General Fund.
b. Capital Projects Fund.
c. Capital Projects Fund and the General Capital Assets and General Long-Term Liabilities accounts.
d. General Capital Assets and General Long-Term Liabilities accounts.

8. The activities of a central motor pool that provides and services vehicles for the official use of municipal employees from several city departments and charges them a fee to recover costs incurred should be accounted for in
a. An Agency Fund.
b. The General Fund.
c. An Internal Service Fund.
d. A Special Revenue Fund.

9. A city collects property taxes on behalf of the local sanitary, park, and school districts and periodically remits collections to these units. This activity should be accounted for in
a. An Agency Fund.
b. The General Fund.
c. An Internal Service Fund.
d. A Special Revenue Fund.

10. A transaction in which a municipal electric utility issues bonds (to be repaid from its own operations) requires accounting recognition in
a. The General Fund.
b. A Debt Service Fund.
c. An Enterprise Fund.
d. An Enterprise Fund, a Debt Service Fund, and the General Capital Assets and General Long-Term Liabilities accounts.
(AICPA, adapted)



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  • CreatedOctober 25, 2014
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