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True/False Questions 1. Capital projects funds of a governmental entity record the receipt and payment of cash for all the entity's plant assets other than those financed by the general fund. Answer: False 2. Proceeds from the issuance of general obligation bonds of a governmental entity are recorded in a debt service fund. Answer: False 3. Special assessment bonds may be issued by a governmental entity to finance construction projects prior to the collection of special assessments receivable from benefited property owners. Answer: True 4. Bonds issued to finance a plant asset construction project of a governmental entity are recorded as a liability in a capital projects fund. Answer: False 5. The purpose of debt service funds is to account for the accumulation of resources for the payment of principal and interest on all long-term debt of a governmental entity. Answer: False 6. All plant assets of a governmental entity are recorded in a voluntarily maintained general capital assets account group. Answer: False 7. Typically, a Special Assessments Receivable ledger account is included in the accounting records of a governmental entity's special revenue fund. Answer: True 8. The Unreserved and Undesignated Fund Balance ledger account of a capital projects fund is credited for interest revenue on that fund's investments. Answer: False
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The amount of these bonds to be accounted for in Queen Village's voluntarily maintained General Long-Term Debt Account Group is: A) $0 B) $200,000 C) $300,000 D) $500,000 Answer: A
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Sept. 1
Prepare journal entries (omit explanations) for the foregoing activities of Wilburtown assuming use of encumbrance accounting. Identify by initials the funds or voluntarily maintained account groups (for example, GF, SRF, CPF, GCAAG) in which the journal entries are recorded. Answer: 2005 SRF July 1
Estimated Revenues Appropriations Budgetary Fund Balance Encumbrances Fund Balance Reserved for Encumbrances Special Assessments Receivable Current Special Assessments Receivable Deferred Revenues Deferred Revenues Expenditures Vouchers Payable Fund Balance Reserved for Encumbrances
640,000 600,000 40,000 5,000,000 5,000,000 80,000 320,000 80,000 320,000 20,000 20,000 19,600
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CPF
July 5
SRF
Aug. 1
GF
Sept. 1
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28. Indicate for each of the ledger accounts listed below, by a check mark in the appropriate column or columns, the funds of a governmental entity in which each account generally is used:
General Fund Special Revenue Fund Debt Service Fund Capital Projects Fund Enterprise Fund
Ledger Accounts Encumbrances (and Fund Balance Reserved for Encumbrances) used voluntarily Appropriations General Obligation Bonds Payable Estimated Revenues Machinery and Equipment Answer:
Ledger Accounts Encumbrances (and Fund Balance Reserved for Encumbrances) used voluntarily Appropriations General Obligation Bonds Payable Estimated Revenues Machinery and Equipment
General Fund
Enterprise Fund
X X X
X X X X
X X
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(3)
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GCAAG Investment in General Capital Assets from General Fund Revenues Machinery and Equipment GCAAG Machinery and Equipment Investment in General Capital Assets from General Fund Revenues (3) GCAAG Land Investment in General Capital Assets from Donations
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Mar. 31 Other Financing Uses 88,000 Cash To record transfer to Debt Service Fund for maturing principal and interest on general obligation serial bonds. Apr. 5 Cash Unreserved and Undesignated Fund Balance To record unexpended cash received from Capital Projects Fund after completion of library addition. 120,000
88,000
120,000
Prepare related journal entries (omit explanations) in other funds or voluntarily maintained account groups of Farmville Township. Identify the funds or account groups in headings for the entries. Answer: FARMVILLE TOWNSHIP GENERAL CAPITAL ASSETS ACCOUNT GROUP Journal Entry 2006 Mar. 3 Machinery and Equipment 20,000 Investment in General Capital Assets from General Fund Revenues 20,000 FARMVILLE TOWNSHIP DEBT SERVICE FUND Journal Entry 2006 Mar. 31 Cash Other Financing Sources 88,000 88,000
FARMVILLE TOWNSHIP CAPITAL PROJECTS FUND Journal Entry 2006 Apr. 5 Unreserved and Undesignated Fund Balance Cash 120,000 120,000
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