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NFP - Test 2 - Ch 6 Exam Questions And
Answers |Latest 2025 | Guaranteed Pass.
A government opts to set aside $10M of general fund resources to finance a new city hall.
Construction is expected to begin in several years, when the city has been able to accumulate
additional resources. - Answer✔The government may account for the $10M in a capital projects
fund, but in its government wide statements it may not report the $10M as "restricted"
A government should distinguish underwriting and other issue costs from bond premiums and
discounts and in a governmental fund should - Answer✔Report them as expenditures
When a government issues bonds at premiums or discounts and records the proceeds in a
capital projects fund, it should - Answer✔Transfer an amount equal to the premiums from the
capital projects fund to a debt service fund, but make no transfer of an amount equal to the
discounts from a debt service to a capital projects fund.
A city holds U.S. Treasury notes as an investment in a capital projects fund. During the year the
market value of the notes increases by $50K. Of this amount, $14K can be attributed to a
decline in prevailing interest rates and $36K to interest that has been earned but not yet
received. As of year -end the city should recognize as revenue - Answer✔$50K
Which of the following accounts is least likely to be shown on the balance sheet of a debt
service fund? - Answer✔Bonds Payable
Special assessment debt should be reported on the balance sheet of a city if the debt is to be
paid from assessments on property owners and - Answer✔1. The city has guaranteed payment
of the debt and probability of the city having to make good on the guarantee is >= 50%
1|P a g e
NFP - Test 2 - Ch 6 Exam Questions And
Answers |Latest 2025 | Guaranteed Pass.
A government opts to set aside $10M of general fund resources to finance a new city hall.
Construction is expected to begin in several years, when the city has been able to accumulate
additional resources. - Answer✔The government may account for the $10M in a capital projects
fund, but in its government wide statements it may not report the $10M as "restricted"
A government should distinguish underwriting and other issue costs from bond premiums and
discounts and in a governmental fund should - Answer✔Report them as expenditures
When a government issues bonds at premiums or discounts and records the proceeds in a
capital projects fund, it should - Answer✔Transfer an amount equal to the premiums from the
capital projects fund to a debt service fund, but make no transfer of an amount equal to the
discounts from a debt service to a capital projects fund.
A city holds U.S. Treasury notes as an investment in a capital projects fund. During the year the
market value of the notes increases by $50K. Of this amount, $14K can be attributed to a
decline in prevailing interest rates and $36K to interest that has been earned but not yet
received. As of year -end the city should recognize as revenue - Answer✔$50K
Which of the following accounts is least likely to be shown on the balance sheet of a debt
service fund? - Answer✔Bonds Payable
Special assessment debt should be reported on the balance sheet of a city if the debt is to be
paid from assessments on property owners and - Answer✔1. The city has guaranteed payment
of the debt and probability of the city having to make good on the guarantee is >= 50%
1|P a g e
