Governmental Accounting

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GOVERNMENTAL ACCOUNTING
EXAM 3 - CHAPTERS 8 THRU 10

Select the best answer for each question and enter your answers on the answer sheet sent with the exam. Submit only the completed answer sheet, not the entire exam. Please write your name on the answer sheet.

1. General long-term debt of a governmental entity includes a) All future financial obligations.
b) All future financial obligations that result from past transactions. c) All future financial obligations that result from past transactions for which the government has already received a benefit. d) All future financial obligations that are backed by the government’s general credit and revenue raising power and that result from past transactions for which the government has already received a benefit.

2. In governmental fund-type financial statements, the assets acquired under a capital lease would be reported at a) They are not reported in the fund financial statements. b) The present value of the required lease payments. c) The undiscounted total of required lease payments. d) The total of all payments required under the lease.

3. In the government-wide financial statements, the assets acquired under a capital lease would be reported at a) They are not reported in the fund financial statements. b) The present value of the required lease payments. c) The undiscounted total of required lease payments. d) The total of all payments required under the lease.

4. In the government-wide financial statements, long-term liabilities of governmental entities are generally reported at a) Face value.
b) Face value plus (minus) unamortized premium (discount). c) Present value.
d) Market value of the obligation.

5. Pulling County has a December 31 fiscal year-end. In November, the County borrowed $8 million from a local bank, due in six months at 6% interest, to finance general government operations. The county pledges property tax revenues to secure the loan. At year-end, how should the bank note be displayed in the fund financial statements? a) Nothing in the General Fund; Nothing in a Schedule of Changes in Long-Term Obligations. b) General Fund--$8 million in Other Financing Sources; Nothing in a Schedule of Changes in Long-Term Obligations. c) General Fund--$8 million in Other Financing Sources; $8 million in a Schedule of Changes in Long-Term Obligations d) General Fund--$8 million in Notes Payable; Nothing in a Schedule of Changes in Long-Term Obligations.

6. New City entered into a lease agreement for several new dump trucks to be used in general government activities. Assuming the City maintains its books and records in a manner that facilitates the preparation of the fund financial statements, acquisition of these dump trucks would require entries in which of the following funds and/or schedules? a) General Fund only

b) General Fund AND Schedule of Changes in Long-Term Debt Obligations c) General Fund AND Schedule of General Fixed Assets d) General Fund, Schedule of General Fixed Assets AND Schedule of General Long-Term Debt Obligations

7. Southwest City enters into a lease agreement that contains a nonappropriation clause. The clause a) Has been held by courts in 26 states to effectively cancel the lease. b) Stipulates that the yearly lease payment must be appropriated by the City Council each year. c) Prohibits the city from replacing leased property with similar property. d) Permits the city to lease at lower rates than would be possible without the presence of the clause.

8. Sun City is located in Hailey County. Sun Valley School District encompasses all of Sun City and some of Hailey County. Property in Sun City is assessed at $400 million; property in...
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