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ACC 410 QUIZ 5 (2)



ACC 410 QUIZ 5 (2) An obligation issued in the name of a government on behalf of a nongovernmental entity is called Debt that is issued by one entity but backed by the promise of another entity to make up any debt service deficiency is To seek protection under the Federal Bankruptcy Code, a governmental entity must In governmental fund-type financial statements, the assets acquired under a capital lease would be reported at Which of the following is likely to be used by a bond-rating agency to rate the general obligation bonds of a governmental entity? The Southside City has $95 million of debt recorded in its Schedule of Changes in Long-Term Obligations, made up of $60 million of general obligation debt, $2 million of compensated absences payable, $8 million claims and judgments, and $25 million of obligations under capital leases. The State limits the amount of general obligation debt that can be issued by a City to 20% of the assessed value of taxable property. The assessed value of property in Southside City is $500 million. The amount of legal debt margin for Southside City is The City of Pocahontas issued $20 million in general obligation bonds at par. The City loaned the proceeds to Domsee Fish Processors to expand the size of their facility, which would allow Domsee to hire additional workers. The loan payments from Domsee to the City are established to match the principal and interest payments on the bond issue. The bonds are payable exclusively from the loan repayments by Domsee. The bonds are secured by the additional plant facilities built by Domsee. Where should the City report the bonds on the annual financial report? Southwest City enters into a lease agreement that contains a nonappropriation clause. The clause In the government-wide financial statements, long-term liabilities of governmental entities are generally reported at 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? A governmental entity that is unable to satisfy claims against it Which of the following funds is most likely to receive the proceeds of revenue bonds? In the government-wide financial statements, the assets acquired under a capital lease would be reported at Pulling County has a December 31 fiscal year-end. In November, the County borrowed $8 million from a local bank, due in six months at 6% interest, to finance general government operations. The county pledges property tax revenues to secure the loan. At year-end, how should the bank note be displayed in the fund financial statements? A City entered into a long-term capital lease for some office equipment. Assuming the city maintains its books and records in a manner to facilitate preparation of fund financial statements, what entry would be made in the General Fund to record this event? The appropriate measurement focus for the business-type activities of the City of Rockford is The City issued $2 million in general obligation bonds to acquire a fleet of vehicles for the Central Motor Pool Internal Service Fund At the date of issue, the appropriate entry in the proprietary fund is a $ 2 million debit to cash and a $2 million credit to During the year the City’s Self-Insurance Internal Service Fund billed the General Fund $300,000 for ‘premiums,’ of which $30,000 was for catastrophic losses and the balance was the premium computed on an actuarially-determined basis. During the year the City incurred $250,000 in claims losses. The total amount transferred to the Self-I


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