Identify the best answer for each of the following
1. Which of the following statements concerning the accounting and financial reporting for capital assets is false?
a. Capitalization thresholds differ among governments and often within governments among classes of assets.
b. All capital assets are reported as assets of the purchasing fund.
c. Proprietary fund capital assets are reported as assets in both the fund financial statements and the government-wide financial statements.
d. Governments may choose to use the modified approach in lieu of reporting depreciation for qualifying infrastructure assets.
2. Donated capital assets are valued by the recipient government at
a. Acquisition value at the date of donation.
b. The original cost of the donated asset per the donor's records.
c. The net book value of the asset at the date of donation.
d. The assessed valuation at the date of donation.
e. Fair market at the date of donation
3. Assume that a building used by Carter County's police department is destroyed by a fire. It is then discovered that the building was not properly insured and that its current net book value was $170,000. The controller, Austin Miller, estimated that it will cost $350,000 to replace the building. The loss that would be reported in the General Fund for the reporting period in which the fire occurred would be
a. $170,000 (current net book value)
b. $350,000 (estimated replacement cost).
c. $180,000 (the difference between the net book value and the estimated replacement cost
d. $0
4. When a capital asset of a department reported in a proprietary fund is transferred to a general government department, the effect of the transaction is reported as
a. A transfer in both the proprietary fund and a governmental fund.
b. A non-operating item in both the proprietary fund and a governmental fund.
c. A non-operating expense in the proprietary fund.
d. A transfer out in the proprietary fund.
5. Which of the following is never reported as a general long-term liability?
a. Capital leases
b. Compensated absences
c. Certificates of participation
d. Advances from other funds
6. GAAPs require all of the following note disclosures for capital assets except:
a. Current year depreciation expense by function.
b. A differentiation between depreciable and non-depreciable assets.
c. Capital assets that will be fully depreciated within 1 year.
d. Increase in accumulated depreciation by class of asset.
7. Which of the following statements concerning the reporting of general long-term liabilities is true?
a. General long-term liabilities are reported both in the governmental funds and the government-wide financial statements.
b. General long-term liabilities are only reported in the government-wide financial statements.
c. General long-term liabilities are only reported in the governmental funds.
d. Advances from other funds that are being repaid over a 10-year period would be reported as a general long-term liability.
8. In which of the following scenarios would a general long-term liability be reported as a governmental fund liability?
a. The current portion of long-term debt should always be reported as a governmental fund liability.
b. Debt that has been defeasance in substance.
c. Debt that is in default.
d. The current portion of refunding bonds.
9. The Balance Sheet for governmental funds could potentially include all of the following except
a. The due and payable portion of the net pension liability, which is not related to proprietary or fiduciary activities.
b. Due To Pension Trust Fund.
c. Advance to Pension Trust Fund.
d. Total pension liability.