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161_Quiz_Ch_6_Debt_Sevice - ACCY 161 Chapter 6 Accounting...

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ACCY 161 161_Quiz_Ch_6_Debt_Sevice Page 1 of 4 Chapter 6 - Accounting for General Long-Term Liabilities and Debt Service True/False 1. Both general capital assets acquired or constructed from the proceeds of special assessment debt, and the long-term liability are accounted for in the governmental activities accounts. 2. Debt backed by both special assessments and the full faith and credit of a governmental unit should be reported in the CAFR in the business-type activities accounts. 4. Issuance of tax supported debt having a maturity of more than one year from date of issue must be recorded only in the governmental activities accounts. 5. Debt margin is a term used to denote the total amount of indebtedness of specified kinds that is allowed by law to be outstanding at any one time. 6. Debt margin is the difference between the debt limit and the amount of outstanding debt subject to the limitation. 9. Notes to the financial statements of a state or local government should include a schedule, or summary, of annual debt service requirements (principal and interest payments) for the year following the balance sheet date and for all subsequent years until the final maturity of debt outstanding on balance sheet date. 10. Debt service funds exist to accumulate resources to pay tax supported bond issues at maturity. Interest on such bonds is paid from General Fund appropriations, not from debt service fund appropriations. 11. All long-term debt, including bonds, notes or warrants, and various other long-term obligations, intended to be repaid from tax levies or special assessments are accounted for in debt service funds. 17. At year-end, budgetary and operating statement accounts of a debt service fund are closed in the same manner as is true for a General Fund or for special revenue funds. 20. Expenditures for interest on tax supported long-term debt are not accrued, even though debt service funds are accounted for on the modified accrual basis. Multiple Choice 30. Which of the following are properly accounted for in the governmental activities accounts? A) Tax-supported general obligation bonds. B) Obligations under capital leases used to finance general capital assets. C) The long-term portion of judgments and claims. D) All of the above.
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