1. A 6-month note for $5,000 plus interest of $200 was repaid from the general fund. The note had been issued early in the fiscal year to alleviate a temporary cash shortage. The effect of retiring the note and related interest on the fund balance of the general fund is to reduce the fund balance by how much?

A. $100

B. $200

C. $5,000

D. 5,200

2. A government retired general government long-term debt by repaying the principal of $500,000 and paying the interest due of $60,000. What effect does this transaction have on the fund balance of the governmental fund from which the principal and interest were paid?

A. No charge

B. $500,000 decrease

C. $560,000 decrease

D. $60,000 decrease

3. If the cost of services that a government provides to its constituency during a year exceeds revenues raised from that year's constituency, the government:

A. has a cash shortage

B. has not achieved inter period equity

C. has overexpended its appropriation authority

D. is insolvent.

4. The fund used to account for general government financial resources that have not been restricted or internally set aside for expenditure for a specific purpose is:

A. a capital projects fund

B. a debt service fund

C. a special revenue fund

D. the general fund

Answer rating: 100% (QA)

Answers 1 Option d 5200 The effect of retiring the note and related interest on the fund ... View the full answer