1. All of the following are true of a Debt Service Fund except: A. The modified accrual basis of accounting is used. B. Budgetary accounting is not required by GAAP. C. Encumbrance accounting is required by GAAP. D. The measurement focus is on the flow of current financial resources. E. All of the above statements are true.

2. When an invoice for capital assets purchased by a governmental fund is received, what account if any would be debited: A. Expenditures B. A Liability C. Encumbrances D. Other Financing Uses

3. If a bond is issued at a discount, which of the following statements would be true: A. The Bond Rate was less than the Market Rate. B. The Bond Rate was greater than the Market Rate. C. The Bond Price would be greater than 100. D. The Bond Rate would be equal to the Market Rate.

4. All of the following would be recorded as an expenditure in a Capital Project Fund except: A. Payment of construction costs B. Bond issue costs C. Interest on a short term liability D. Bond discounts.

5. Retirement of the principal of a bond anticipation note that is accounted for as long term in a Capital Projects Fund should be reported in the Capital Projects Fund statement of revenues, expenditures, and changes in fund balance as A. Expenditures B. Other financing uses C. Other financing sources D. Decrease in a liability

6. A county government secured a three-month, $500,000 loan at 6% interest from a local lending institution to finance a project at a county-owned park. The loan transaction took place one month prior to the end of the fiscal year, at which time 50% of the project was completed for $250,000. As of the end of the fiscal year, the county should report debt service expenditures in the amount of A. $0. B. $2,500. C. $250,000. D. $252,500. E. None of the above.

7. If a Capital Project Fund expects to issue $3,000,000 in bonds, receive a $500,000 federal capital grant, collect Special Assessment Taxes of $1,000,000 and a transfer of $750,000 from the General Fund, the Capital Projects Fund budget would report Estimated Revenues of A. $0. B. $500,000. C. $1,500,000. D. $2,250,000. E. $5,250,000.

8. Accrued interest collected at the time the bonds are sold, would be accounted for as: A. Other Financing Use B. Expenditure C. Liability D. Other financing Source

9. Bond anticipation notes are: A. Always short-term liabilities regardless of the maturity date. B. Always general long-term liabilities. C. Sometimes treated as fund liabilities even if they have a long-term maturity. D. Sometimes treated as general long-term liabilities even if they have a short-term maturity.

10. Which of the following would not be classified as Other Financing Sources or Uses A. Lease of a capital asset B. Proceeds from a 9 month note C. Interfund Transfers D. All of the above would be classified as either an Other Financing Source or Use.

11. A government has $3,000,000 of 6%, 10 year general obligation bonds outstanding. The bonds were issued on November 1, 2016 to finance construction of a general capital asset. Interest is payable semiannually on April 30 and October 31. What amount of expenditures should be reported in the Capital Project Fund for the year ending December 31, 2016 A. $0 B. $30,000 C. $90,000 D. $120,000

12. If a government earns but has not collected interest on Capital Project Fund investments at the end of the fiscal year, the Funds financial statement should report A. An expenditure . B. A deferred revenue. C. A Current Liability. D. Other Financing Source. E. No entry is required.

13. When a Debt Service Fund is terminated, the residual assets are generally A. Transferred to the General Fund B. Transferred to a Special Revenue Fund C. Transferred to a Capital Project Fund D. Transferred to another Debit Service Fund

14. A government paid $6,000,000 into an irrevocable trust to be used to service $5,000,000 of outstanding general obligation bonds. The old debt is considered to be defeased in substance. The payment included $3,000,000 of proceeds from a new bond issue and another $3,000,000 that had been accumulated in the Debt Service Fund. The government should report this transaction in its Debt Service Fund as A. Other financing uses of $6,000,000 B. Expenditures of $6,000,000 C. Other financing uses of $3,000,000 and expenditures of $3,000,000 D. No journal entry would be required since the old debt is considered to be defeased.

15. A government retired $5,000,000 of outstanding general obligation bonds when due. The government used $3,000,000 of proceeds from a new bond issue and another $2,000,000 from financial resources previously accumulated in the Debt Service Fund. After the old debt is retired, what would be the amount of General Long Term Liabilities reported in the nonfund. A. $2,000,000 B. $3,000,000 C. $5,000,000 D. $8,000,000

16. A government has $1,000,000 of 6%, 10 year general obligation bonds outstanding. The bonds were issued on November 1, 20X7 to finance construction of a general capital asset. Interest is payable semiannually on November 1 and May 1. The bonds also require an annual principal Payment of $100,000 each May 1. What amount of Debt Service expenditures should be reported For the year ending December 31, 20X8. A. $ 60,000 B. $ 90,000 C. $160,000 D. $190,000

17. Debt defeased in substance means: A. The old debt has matured and removed from the Nonfund B. The defeasance must be reported each year until the old debt has matured. C. The defeasance is only required to be disclosed in the year of the defeasance. D. The defeasance must be the result of an advance refunding.