ACC 410 WK 11 Final Exam - All Possible Questions

The resources to service all long-term debts of the governmental entity are typically accounted for in debt service funds. 2. When governments establish capital projects funds, they may choose to maintain a separate fund for each major project, or they may choose to combine two or more projects in a single fund. 3. GASB Statement No. 34 does not require a budgetary comparison statement for capital projects funds as it does for the general fund and for each major special revenue fund that has a legally adopted annual budget. 4. Capital projects funds do not report long-term obligations in the fund. 5. When bonds are issued at a premium, the capital projects fund can transfer those excess resources to the debt service fund. 6. When bonds are issued at a discount, the debt service fund usually transfers an amount to the capital projects fund to make up for the deficiency. 7. In accounting for costs incurred on a major construction project in a capital projects fund, the construction outlays would be accumulated in a long-term asset account. 8. Debt service funds are maintained to account for resources accumulated to pay interest and principal on general long-term debt—that is, long-term debt associated primarily with governmental activities. 9. In contrast to the accounting for debt service fund expenditures, the interest revenue on bonds held as investments should be accrued in the period the revenue is earned. 10. Special assessments are imposed nonexchange transactions, similar to property tax levies. 11. The interest paid on debt issued for public purposes by state and local governments is generally subject to federal taxation. 12. Nongovernmental not-for-profits must account for defeasances differently than governments.