Exam 2.htm - Select the BEST answer to each question from...

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Select the BEST answer to each question from those given. Each Problem is worth 4 points. 1. Which of the following would be considered a general capital asset? A) A vehicle purchased from general fund revenues. B) A vehicle purchased and maintained by an enterprise fund. C) A computer purchased from revenues of an internal service fund and used by the supplies department. D) Real estate purchased with the assets of a pension trust fund. A 2. A wealthy local merchant donated a building to the city of Rosewood during the year. The original cost of the building was $300,000. Accumulated depreciation at the date of the gift amounted to $250,000. Fair market value at the date of the gift was appraised at $600,000, of which $40,000 was appraised as value of the land on which the building was situated. At what amount should Rosewood record this donated property in the governmental activities accounts at the government-wide level? A) $50,000. B) $250,000. C) $600,000. D) $ 0. C 3. Equipment acquired under capital leases and used by activities accounted for in governmental funds should be recorded in the governmental activities accounts at the inception of the lease at A) Fair value. B) Present value of minimum lease payments.
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C) Lower of fair value or present value of minimum lease payments. D) None of the above; leased assets should not be recorded in the accounts. C 4. Five trucks were leased by Pleasantville under terms qualifying as a capital lease. These trucks are to be used in the fire department. This transaction would require an entry in A) Internal service fund. B) Special revenue fund. C) Plant and equipment fund. D) Governmental activities. D 5. A capital projects fund might be used to account for which of the following activities? A) Maintaining roads and bridges. B) Building a parking garage. C) Providing water and sewer services.
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Exam 2.htm - Select the BEST answer to each question from...

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