1. Howard City should use a capital projects fund to account for:

a. Proceeds of a capital grant to finance a new civic center that will not provide services primarily on a user-charge basis

b. Construction of sewer lines by the water and sewer utility to be financed by user costs

c. The accumulation of resources to retire bonds issued to construct the town hall

d. Construction of an addition to the airport terminal owned by the Howard City Municipal Airport, an enterprise fund

2. When a capital projects fund is dissolved by paying any remaining assets to another fund, the decrease in fund balance is a (an):

a. Expenditure

b. Operating transfer

c. Residual equity transfer

d. Reimbursement

3. Which of the following items would be least likely to appear in the account titles of a capital projects fund?

a. Due from federal government (for grant)

b. Due from general fund

c. Proceeds from bond issue

d. Construction in progress

4. Three financial statements may be required to present the results of operations and financial position of a special revenue fund. Which of the following is not one of these required statements?

a. Statement of cash flows

b. Statement of revenues, expenditures, and changes in fund balance

c. Statement of revenues, expenditures, and changes in fund balance—budget and actual

d. Balance sheet

5. Assets financed through a capital projects fund should be capitalized in the government-wide financial statements:

a. Only when construction is completed

b. On the basis of expenditures to date in Construction in Progress

c. On the basis of expenditures and encumbrances to date in Construction in Progress

d. On the basis of amounts paid to date in Construction in Progress