Exam 1 Quest and Answers

Topics: Generally Accepted Accounting Principles, Asset, Inventory Pages: 12 (1719 words) Published: April 26, 2014
Acccounting 248:51
Spring 2014
Midterm Exam April 7, 2014

Instructor: Dan Cunningham
Email: dan@dancunningham.org
Phone/Text: 518.431.9796

Instructions: Please record your answers on the answer page provided. Your answers must be submitted on or before 11:59PM on April 12. Please upload your answer sheet to the appropriate file on ANGEL.

1. The City 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 and bond issue costs, are being used to refund the outstanding bonds. Debt Service Fund Expenditures will be debited for

A. $15,000.
B. $30,000.
C. $1,455,000.
D. $1,470,000.
2. Which of the following statements is true concerning accounting and financial reporting practices related to capital asset acquisitions?
A. Routine capital purchases such as vehicles and equipment often may be financed and accounted for in a General Fund.
B. Most capital lease transactions related to governmental funds are accounted for in either the General Fund or a Debt Service Fund.
C. Capital Project Funds may be used only for acquisition or construction of major capital facilities.
D. Most capital projects last only for on fiscal year.
3. A government was billed $3,000,000 during the year on its capital project, of which $2,700,000 was paid. The total contracted cost is $5,200,000. The government does not plan to pay the $300,000 balance currently owed to the contractor until the project has been completed and approved. The government should report Capital Projects Fund expenditures for the current year equal to

A. $2,700,000.
B. $3,000,000.
C. $4,900,000.
D. $5,200,000.
4. 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. Construction in Project is not an asset in governmental accounting.

Acccounting 248:51
Spring 2014
Midterm Exam April 7, 2014

Instructor: Dan Cunningham
Email: dan@dancunningham.org
Phone/Text: 518.431.9796

5. A Capital Projects Fund has outstanding encumbrances of $75,000 as of the end of the fiscal year. Assume that all resources in the Capital Projects Fund are considered to be restricted. How should these encumbrances be reported in the year-end external financial statements?

A. As a specific identifiable component of restricted fund balance. B. As a specific identifiable component of committed fund balance. C. As a specific identifiable component of assigned fund balance. D. The encumbrances would only be reported in the note disclosures. 6. The city is installing curbs and sidewalks in a subdivision as part of a special assessment capital improvement project. The capital improvements are being financed by an $800,000 eight year, 10%, special assessment note payable issued for cash at the Last National Bank at the beginning of the project earlier this year. The note and interest are to be repaid from special assessments levied against the property owners of the subdivision. The total amount of special assessments is $840,000 and will be collected evenly over eight years. The city spent $600,000 to install curbs and sidewalks during the year. For the year, the city should report what change in fund balance for the Capital Projects Fund?

A. $(600,000).
B. $200,000.
C. $240,000.
D. $840,000

Acccounting 248:51
Spring 2014
Midterm Exam April 7, 2014

Instructor: Dan Cunningham
Email: dan@dancunningham.org
Phone/Text: 518.431.9796

7

Assume that a government received a $5,000,000 expenditure-driven grant in Year 1 for a project that was expected to take three years to complete. Further assume that qualifying expenditures for the project, which actually took four years to complete, were as follows: Year 1 - $1,000,000; Year 2 - $2,500,000; Year 3 - $1,000,000; Year 4 - $400,000. The government should report grant revenues in Year 2 in the amount of

A....
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • acct 3001 exam 1 practice Essay
  • Review questions Exam 2 with answers Essay
  • Essay on Practice EXAM 1 Answers
  • Exam 1 Study Guide Essay
  • Essay on Study guide answer exam 1
  • Essay about Exam 1 Study Guide answers
  • Exam 1 Review Essay
  • exam Essay

Become a StudyMode Member

Sign Up - It's Free