Question 10

A state created a housing authority to provide financing for low-income housing. The authority issues bonds and uses the proceeds for that purpose. Currently the authority has outstanding $200 million in bonds backed by the state's promise to cover debt service shortages should they arise. The state constitution specifically limits the state to no more than $2 million in general obligation debt. How can the state officials defend the $200 million in debt outstanding?

		The debt is not general obligation debt.
		The state is only morally obligated for the debt.
		The debt is the debt of the authority, not the state.
		All of the above.

Question 11

A government reports the utility services it provides to citizens in a proprietary fund. Which accounting standards must the proprietary fund apply?

		All FASB pronouncements, unless a FASB pronouncement conflicts with or contradicts a GASB pronouncement.
		All FASB pronouncements issued prior to November 30, 1989, as well as any post-November 30, 1989 pronouncements specifically adopted by GASB.
		All GASB pronouncements.
		All FASB and AICPA standards incorporated into GASB Statement No. 62, as well as any FASB pronouncements issued after November 30, 1989 that have been specifically adopted by the GASB.

Question 12

A proprietary fund of a government has some donor-restricted assets. Which of the following best describes where and how those assets will generally be displayed in the fund's financial statements?

		In a separate restricted asset category on the statement of net position.
		Intermingled with other assets on the statement of net position.
		Intermingled with other assets on the statement of net position, but footnoted.
		In a separate restricted fund.

Question 13

The appropriate basis of accounting for the proprietary funds of a government is

		Cash basis.
		Modified accrual.
		Full accrual.
		None of the above.