Govt Accounting

$10,000,000 of 7% interest bonds are sold for $10,120,000, which includes two month’s of interest. The accrued interest is NOT deposited directly to the Debt Service Fund. Which one of the following entry is correct?

	Capital Projects Fund: Cash (Dr) $ 10,120,000 Proceeds From Issuance of Bonds (Cr) $ 10,000,000 Due To Debt Service Fund (Cr) $120,000
	Debt Service Fund: Accrued Interest Payable (Dr) $ 120,000 Due From Capital Projects Fund (Cr) $ 120,000
	Capital Projects Fund: Cash (Dr) $ 10,120,000 Proceeds From Issuance of Bonds (Cr) $ 10,120,000
	Debt Service Fund Cash (Dr) $ 120,000 Accrued Interest Payable (Cr) $ 120,000

Correct

Incorrect

A city hall expected to cost $5,000,000 is financed by issuing $4,500,000 of bonds and a transfer of $500,000 from the general fund. The interfund transfer would be recorded as:

General Fund
 Transfers Out – Capital Projects Fund  $ 500,000
 Due To Capital Projects Funds                        $ 500,000
 Capital Projects Fund
 Due From General Fund          $ 500,000
 Transfers In – General Fund            $ 500,000

Incorrect

A union county school had $1,000,000 in construction costs related to the capital projects fund and are paid by the general fund because long-term bonds have not yet been sold. The entry for for capital projects fund would be:

No entry for capital projects fund.

General Fund would have an entry:

Expenditures – Capital Outlays            $1,000,000
Cash                                             $1,000,000

Incorrect

Which of the following is not part of Reconciliation of Balance Sheet for Government Funds?

	Accrued interest Payable not included in the funds
	Capital Assets used in government activities, excluding internal service funds
	Long term Liabilities, including bonds payable
	Reserved for Prepaid items and other assets

Correct

Incorrect

Which of the following is NOT correctly matched?

	Estimated Other Financing Source --> A disposal of equipment which is an unusual, nonrecurring transaction.
	Estimated Other Financing Use --> The legislative body estimates that it will spend $39,000 to settle a lawsuit.
	Budgetary fund balance --> Surrogate for unreserved fund balance
	Encumbrance --> authorized spending for the budget year.

Correct

Encumbrance is commitment to spend. Appropriation is authorization to spend

Incorrect

Appropriations: 5 MM

Expenditures for Governmental Operations: 1 MM

Other Encumbrances: 2 MM

The amount available spending authority in the appropriation for the ﬁscal year is:

	$2,000,000
	$5,000,000
	$3,000,000
	$1,000,000

Correct

Uncommitted or available appropriation= Appropriations — (Expenditures + Encumbrances)

Incorrect

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