governmental accounting exam 2
questions & correct answers.
long lived assets used by activities financed by the general fund or other governmental funds are called
________________________________. ANS -general capital assets
how are general capital assets commonly financed? with long term debt to be repaid by
1.______________
2.______________
3._____________.
4._____________
5______________
6_____________ ANS -tax revenues, special assessments, grants from governments, transfers from
funds, gifts from individuals, lease financing
if money received from the various places general capital assets can be financed with and they are
____________, ____________, or ______________ to the purchase or construction of specified general
capital assets, it's recommended that a ________________________ fund be created. ANS -restricted,
committed, assigned, capital projects fund
why do governmental funds not record capital assets acquired by the funds? ANS -they only account for
current financial resources
instead of capital assets being recorded in the governmental fund level, they are recorded where? ANS -
governmental activities
how may general capital assets be acquired? ANS -expenditures of the general fund, special revenue
funds, capital projects funds
where is the cost or other carrying value of general capital assets and any related long term debt
recorded? ANS -governmental activities
,what helps achieve accountability and provides information needed for various items under capital
assets? ANS -inventory records
what does having inventory records of capital assets achieve? ANS -maintenance program, preparing
budget requests for replacements, adequate insurance, assigns responsibility for custody of the assets
How are general capital assets recored as of GASB? ANS -historical cost
if general capital assets are donated, how are they recorded? ANS -acquisition value at time of receipt
plus ancillary charges
if a general capital asset is donated, how is the revenue related to the donation recognized? ANS -
government wide statement of activities
acquisition of a general capital asset represents an expenditure in a _____________________ but
requires capitalization of an asset in the appropriate ______________________ account. ANS -
governmental fund, governmental activities
What does GASB require with regards to general capital asssets about notes to the financial statements?
ANS -reported in the governmental activities column and business type activities
what are the required disclosures for general capital assets for governmental activities and business
type activities? ANS -boy and eoy balances with accumulated depreciation separate from historical cost,
capital acquisitions during the year, sales/dispositions during the year, depreciation expense for current
period, things that are not capitalized and explaining why they aren't
what are the required disclosures for general capital assets under a lease agreement? ANS -basis, terms
and conditions, existence, terms and conditions of residual value, amount of lease assets and related
accumulated depreciation disclosed separately from other capital assets, amount of outflows of
resources recognized in the reporting periods, principal and interest requirements to maturity,
commitments under leases before commencement of lease term, components of any loss associated
with impairment of the lease
, what are the three types of impairment measurements that are acceptable for use when an asset is
impaired affecting the duration of its use? ANS -restoration cost approach, service units approach,
deflated depreciated replacement cost approach
how is a loss due to impairment recorded in a government wide statement of activities? ANS -program
expense
how do capital projects funds differ from the general fund and special revenue funds? ANS -general
fund and special revenue fund have a year to year life, capital projects funds have a project-life focus
why do estimated revenues not need to be recorded under a general capital project fund? ANS -
contractors don't start work on a project until financing is ensured
because the purpose of the capital projects fund is to account for the reciept and expenditure of
financial resources earmarked for capital projects, its balance sheet reports only ____________
resources, and the _______________ to be liquidated by those resources. ANS -financial, liabilities
neither the ___________ nor any _______________ incurred for the acquisition is recorded in a capital
projects fund. These items are recorded in the ____________________ in the government wide level.
ANS -assets acquired, long term debt, governmental activities
proceeds of debt issues should be recognized by a capital projects fund at the time the issue is
___________ rather than at teh time it is ___________ because _____________ does not guarantee its
sale. ANS -sold, authorized, authorization
proceeds of debt issues should be recorded as ____________________ or _______________ rather
than as revenues and should be reported in the _____________________ section of the statement of
revenues, expenditures, and changes in fund balance. ANS -proceeds of bonds or proceeds of long term
notes, other financing sources
tax revenues raised by the general fund or a special revenue fund and transferred to a capital projects
fund are recorded as ___________________ and reported in ______________________ section of the
operating statement. ANS -interfund transfers in, other financing sources
questions & correct answers.
long lived assets used by activities financed by the general fund or other governmental funds are called
________________________________. ANS -general capital assets
how are general capital assets commonly financed? with long term debt to be repaid by
1.______________
2.______________
3._____________.
4._____________
5______________
6_____________ ANS -tax revenues, special assessments, grants from governments, transfers from
funds, gifts from individuals, lease financing
if money received from the various places general capital assets can be financed with and they are
____________, ____________, or ______________ to the purchase or construction of specified general
capital assets, it's recommended that a ________________________ fund be created. ANS -restricted,
committed, assigned, capital projects fund
why do governmental funds not record capital assets acquired by the funds? ANS -they only account for
current financial resources
instead of capital assets being recorded in the governmental fund level, they are recorded where? ANS -
governmental activities
how may general capital assets be acquired? ANS -expenditures of the general fund, special revenue
funds, capital projects funds
where is the cost or other carrying value of general capital assets and any related long term debt
recorded? ANS -governmental activities
,what helps achieve accountability and provides information needed for various items under capital
assets? ANS -inventory records
what does having inventory records of capital assets achieve? ANS -maintenance program, preparing
budget requests for replacements, adequate insurance, assigns responsibility for custody of the assets
How are general capital assets recored as of GASB? ANS -historical cost
if general capital assets are donated, how are they recorded? ANS -acquisition value at time of receipt
plus ancillary charges
if a general capital asset is donated, how is the revenue related to the donation recognized? ANS -
government wide statement of activities
acquisition of a general capital asset represents an expenditure in a _____________________ but
requires capitalization of an asset in the appropriate ______________________ account. ANS -
governmental fund, governmental activities
What does GASB require with regards to general capital asssets about notes to the financial statements?
ANS -reported in the governmental activities column and business type activities
what are the required disclosures for general capital assets for governmental activities and business
type activities? ANS -boy and eoy balances with accumulated depreciation separate from historical cost,
capital acquisitions during the year, sales/dispositions during the year, depreciation expense for current
period, things that are not capitalized and explaining why they aren't
what are the required disclosures for general capital assets under a lease agreement? ANS -basis, terms
and conditions, existence, terms and conditions of residual value, amount of lease assets and related
accumulated depreciation disclosed separately from other capital assets, amount of outflows of
resources recognized in the reporting periods, principal and interest requirements to maturity,
commitments under leases before commencement of lease term, components of any loss associated
with impairment of the lease
, what are the three types of impairment measurements that are acceptable for use when an asset is
impaired affecting the duration of its use? ANS -restoration cost approach, service units approach,
deflated depreciated replacement cost approach
how is a loss due to impairment recorded in a government wide statement of activities? ANS -program
expense
how do capital projects funds differ from the general fund and special revenue funds? ANS -general
fund and special revenue fund have a year to year life, capital projects funds have a project-life focus
why do estimated revenues not need to be recorded under a general capital project fund? ANS -
contractors don't start work on a project until financing is ensured
because the purpose of the capital projects fund is to account for the reciept and expenditure of
financial resources earmarked for capital projects, its balance sheet reports only ____________
resources, and the _______________ to be liquidated by those resources. ANS -financial, liabilities
neither the ___________ nor any _______________ incurred for the acquisition is recorded in a capital
projects fund. These items are recorded in the ____________________ in the government wide level.
ANS -assets acquired, long term debt, governmental activities
proceeds of debt issues should be recognized by a capital projects fund at the time the issue is
___________ rather than at teh time it is ___________ because _____________ does not guarantee its
sale. ANS -sold, authorized, authorization
proceeds of debt issues should be recorded as ____________________ or _______________ rather
than as revenues and should be reported in the _____________________ section of the statement of
revenues, expenditures, and changes in fund balance. ANS -proceeds of bonds or proceeds of long term
notes, other financing sources
tax revenues raised by the general fund or a special revenue fund and transferred to a capital projects
fund are recorded as ___________________ and reported in ______________________ section of the
operating statement. ANS -interfund transfers in, other financing sources
