Reference no: EM131701753

Question 1. The resources used to finance Capital Projects Funds may come from which of the following sources?

a. Private donations

b. General obligation debt

c. Intergovernmental revenues

d. All of the above

Question 2. The issuance of bonds to provide resources to construct a new courthouse should be recorded in a Capital Projects Fund by crediting which of the following accounts?

a. Bonds payable

b. Revenues-bonds

c. Fund balance

d. Other financing source-long-term debt issued

Question 3. What entry must be made at the beginning of the new period when encumbrance accounting is used for a construction project that continues beyond the end of an accounting period?

a. A credit to Revenues

b. A debit to Cash

c. A debit to Expenditures

d. A debit to Encumbrances

Question 4. What is done with resources that remain in a Capital Projects Fund after the project is completed?

a. Always transferred to a Debt Service Fund

b. Always returned to the provider(s) of the resources

c. Disbursed according to the directives of the resource provider

d. Always transferred to the General Fund.

Question 5. What journal entry is made in the Capital Projects Fund when a contract is signed and encumbrance accounting is used?

a. Encumbrances                                                                     xxxx

        Budgetry fund balance reserved for encumbrances                                     xxxx

b. Vouchers payable                                                                 xxxx

        Reserve for encumbrances                                                                     xxxx

c. Expenditures-construction costs                                             xxxx

        Vouchers payable                                                                                 xxxx

d. Budgetary fund balance reserved for encumbrances                    xxxx

        Fund balance                                                                                       xxxx

Question 6. The principal amount of bonds issued to finance the cost of a new city hall would be recorded as a liability in which of the following funds?

a. General Fund

b. Special Revenue Fund

c. Capital Projects Fund

d. Debt Service Fund

e. None of the above

Question 7. Why is encumbrance accounting usually used in Capital Projects Funds?

a. Long-term debt is not recorded in these funds.

b. The budget must be recorded in these funds.

c. It helps the government control the expenditures.

d. The modified accrual basis of accounting is used.

Question 8. The City of New Easton constructed a convention center. After completion of the project, the convention center should be recorded as an asset in which of the following funds?

a. General Fund

b. Capital Projects Fund

c. Debt Service Fund

d. Both b and c

e. None of the above

Question 9. The City of Matthews has been given a $1,000,000 gift that is restricted by the donor, Rebecca Smith. Ms. Smith's gift agreement mandates that only the earnings from the gift may be used to maintain or improve athletic facilities owned by the city. Which fund should be used to account for the gift?

a. Special Revenue Fund

b. Permanent Fund

c. Capital Projects Fund

d. Private Purpose Trust Fund

Question 10. The gift from Rebecca Smith (see previous question) earned $50,000 this year. The city council decides that these resources should be used to construct new sand volleyball courts for public use. Which fund should be used to account for the construction of the courts?

a. Capital Projects Fund

b. General Fund

c. Special Revenue Fund

d. Enterprise Fund