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Chapter 5 Accounting for Other Governmental Fund Types: Capital Projects, Debt Service, and Permanent True/False Questions 1. Unexpended intergovernmental grants and taxes dedicated to capital improvements in a capital projects fund are likely to be classified as Assigned Fund Balance Answer: False 2. Unexpended intergovernmental grants and taxes dedicated to capital improvements in a capital projects fund are likely to be classified as Restricted Fund Balance Answer: True 3. The residual classification for funds other than the General Fund is Assigned. Answer: True 4. Fund balances of debt service funds are classified among the categories identified in GASB Statement 54 as Restricted and Unrestricted. Answer: False 5. If a bond sinking fund is required by creditors or law, the unexpended resources would be classified as Restricted. Answer: True 6. The principal of permanent funds are classified as Nonspendable Fund Balance. Answer: True 7. The fund balance of permanent funds should be classified as Nonspendable, Spendable and Committed. Answer: False 8. Only the General Fund has a positive Unassigned Fund Balance Answer: True 1 Chapter 5 Accounting for Other Governmental Fund Types: Capital Projects, Debt Service, and Permanent 9. Net assets represented by supplies and prepaid expenses are classified in governmental funds as Nonspendable Fund balance. Answer: True 10. Capital Projects, debt service and permanent funds do not typically record budgets. Answer: True 11. Debt service and permanent funds do not typically record encumbrances. Answer: True 12. Governmental funds recognize encumbrances and expenditures, not expenses. Answer: True 13. Debt service funds may accrue interest and report principle payments due if the payments are due within 30 days after year end. Answer: True 14. Unmatured principal installments and accrued interest which is due shortly after year end are required to be reported as liabilities in the debt service fund at year end. Answer: False 15. All of the governmental funds use the modified accrual basis of accounting Answer: True 16. A special assessment tax is a tax levy that is assessed against only those taxpayers who are deemed to benefit from the service or project paid for by the proceeds of the special assessment levy. Answer: True 17. Special assessments are levied to finance long-term construction projects that benefit the general population. Answer: False 18. Fund balances of debt service funds are classified as assigned or unassigned according to 2 Chapter 5 Accounting for Other Governmental Fund Types: Capital Projects, Debt Service, and Permanent the categories identified in GASB Statement 54. Answer: False 19. Unexpended resources transferred to the debt service fund from the General Fund would typically be classified as Restricted Fund Balance.... View Full Document

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