Government Accounting Exam 2
questions with complete solutions
graded A+
***Construction in Progress would be reported as an asset in
a. a Capital Projects Fund.
b. the General Fund.
c. the General Capital Asset accounts.
d. None of the above. - correct answer ✔✔ c. the General Capital Asset accounts.
The General Fund is partially funding the construction of a new police station. 80% of the
project is being financed; the General Funds' share of the project is $1,000,000. The Capital
Project Fund would report the General funds' share as
a. a $1,000,000 other financing source.
b. a $1,000,000 revenue.
c. a $1,000,000 nonoperating revenue.
d. a $1,000,000 other financing use. - correct answer ✔✔ a. a $1,000,000 other financing
source.
Government A secured a $400,000 short-term loan from a local bank for interim financing for a
governmental capital project. What would the journal entry be in the Capital Projects Fund to
account for this transaction?
A. Cash $400,000
Other Financing Sources $400,000
B. Cash $400,000
Notes Payable $400,000
, C. Construction in Progress $400,000
Other Financing Sources $400,000
D. Cash $400,000
Revenues $400,000 - correct answer ✔✔ B. Cash $400,000
Notes Payable $400,000
(Answer: B; Moderate; LO6)
Government A had $7,000,000 of 5%, six month bond anticipation notes outstanding at the end
of the fiscal year. As of this date, the government has completed all legal procedures and the
notes will be re-financed to a term of ten years the following month. The BAN liability reported
in the Capital Projects Fund as of the end of the fiscal year should be
a. $0
b. $350,000
c. $3,500,000
d. $7,000,000 - correct answer ✔✔ a. $0
Which of the following accounts would appear in a Capital Projects Fund?
a. Contracts payable--retained percentage
b. Bonds payable issued to finance a project
c. Construction in progress
d. Completed buildings - correct answer ✔✔ a. Contracts payable--retained percentage
The town of Newport issued $1,500,000 of general obligation refunding bonds at a 2%
premium. Bond issuance costs of $15,000 were incurred. The proceeds, net of the premium, are
being used to refund the outstanding bonds. Debt Service Fund Expenditures will be debited for
a. $30,000
b. $15,000
c. $1,500,000
questions with complete solutions
graded A+
***Construction in Progress would be reported as an asset in
a. a Capital Projects Fund.
b. the General Fund.
c. the General Capital Asset accounts.
d. None of the above. - correct answer ✔✔ c. the General Capital Asset accounts.
The General Fund is partially funding the construction of a new police station. 80% of the
project is being financed; the General Funds' share of the project is $1,000,000. The Capital
Project Fund would report the General funds' share as
a. a $1,000,000 other financing source.
b. a $1,000,000 revenue.
c. a $1,000,000 nonoperating revenue.
d. a $1,000,000 other financing use. - correct answer ✔✔ a. a $1,000,000 other financing
source.
Government A secured a $400,000 short-term loan from a local bank for interim financing for a
governmental capital project. What would the journal entry be in the Capital Projects Fund to
account for this transaction?
A. Cash $400,000
Other Financing Sources $400,000
B. Cash $400,000
Notes Payable $400,000
, C. Construction in Progress $400,000
Other Financing Sources $400,000
D. Cash $400,000
Revenues $400,000 - correct answer ✔✔ B. Cash $400,000
Notes Payable $400,000
(Answer: B; Moderate; LO6)
Government A had $7,000,000 of 5%, six month bond anticipation notes outstanding at the end
of the fiscal year. As of this date, the government has completed all legal procedures and the
notes will be re-financed to a term of ten years the following month. The BAN liability reported
in the Capital Projects Fund as of the end of the fiscal year should be
a. $0
b. $350,000
c. $3,500,000
d. $7,000,000 - correct answer ✔✔ a. $0
Which of the following accounts would appear in a Capital Projects Fund?
a. Contracts payable--retained percentage
b. Bonds payable issued to finance a project
c. Construction in progress
d. Completed buildings - correct answer ✔✔ a. Contracts payable--retained percentage
The town of Newport issued $1,500,000 of general obligation refunding bonds at a 2%
premium. Bond issuance costs of $15,000 were incurred. The proceeds, net of the premium, are
being used to refund the outstanding bonds. Debt Service Fund Expenditures will be debited for
a. $30,000
b. $15,000
c. $1,500,000
