Select the best answer. 1. Which of the following would be least likely to be classied as

Question:

Select the best answer.
1. Which of the following would be least likely to be classiﬁed as a city’s general capital assets?
a. Roads and bridges
b. Electric utility lines
c. Computers used by the police department
d. Computers used by the department that collects the city’s sale tax, which is dedicated to debt service on general obligation bonds

2. A city should not report on its general-fund an ofﬁce building constructed over 100 years ago because:
a. The building would likely be fully depreciated.
b. It would be too difﬁcult to determine the historical cost of the building as measured in current dollars.
c. The measurement focus of the general fund is on current ﬁnancial resources and the building is not a current ﬁnancial resource.
d. The building would be considered an infrastructure asset and infrastructure assets are excluded from governmental funds.

3. Which of the following costs should not be capitalized and reported on a city’s government-wide statement of net position?
a. Payments to a city artist to design a new city logo
b. Computer software that the city purchased from outsiders
c. Paintings acquired for display in the city’s art museum
d. Legal fees incurred in acquiring land to be used for a city park

4. Which of the following collectibles need not be capitalized and reported on a city’s government-wide statement of net position?
a. A statue donated to the city, which it intends to sell and use the proceeds from the sale to fund a children’s art center
b. A series of books that the city intends to place in its library’s general circulation collection
c. An abstract painting that the city purchased to decorate the mayor’s ofﬁce
d. An early twentieth-century impressionist painting that the city’s art museum purchased for its permanent collection

5. Per GASB Statement No. 34, roads and bridges should be capitalized and reported as assets on
a. Both a government-wide statement of net position and a general fund Neither a government-wide statement of net position nor a general fund A government-wide statement of net position but not a general fund A general fund but not a government-wide statement of net position

6. Which of the following conditions does a government not have to satisfy to use the modiﬁed approach to reporting infrastructure assets?
a. It must assess the condition of its infrastructure at least once every three years.
b. It must estimate the annual amount necessary to preserve the assets at a speciﬁed condition level.
c. It must document that the assets are, in fact, being preserved at or above the speciﬁed condition level.
d. It must use the modiﬁed approach for all of its infrastructure assets.

7. Per the modiﬁed approach, a government need not
a. Capitalize infrastructure assets
b. Depreciate infrastructure assets
c. Report in its fund statements expenditures to acquire or construct infrastructure assets
d. Record maintenance costs as expenditures

8. A government constructed a bridge 20 years ago at a cost of $30 million. The replacement cost of the bridge today would be $90 million. The bridge has a useful life of 60 years. In its government-wide statements the government should record the bridge at a value, net of accumulated depreciation, of
a. $20 million
b. $60 million
c. $90 million
d. $0

9. Per GASB Statement No. 34, deferred maintenance costs
a. Must be estimated and reported in notes to the ﬁnancial statements
b. Must be reported in the government-wide statement of net position but not in fund statements
c. Must be estimated and reported in the management’s discussion and analysis
d. Need not be explicitly measured or reported when capital assets are depreciated

10. A city would probably not have to recognize an impairment loss on its hospital building if:
a. It were severely damaged in a ﬁre
b. It will likely be used to serve far fewer patients than expected when acquired
c. Its market value declines signiﬁcantly
d. It will be transformed into a warehouse

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...