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Exam 5: Accounting for General Capital Assets and Capital Projects

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Question 21

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GASB standards require that general capital assets be recorded in the fund statements at:

A) Historical cost.
B) Fair value at the financial statement date.
C) Estimated cost at the financial statement date
D) None of the above.

E) A) and C)
F) A) and D)

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Question 22

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A general capital asset constructed several years ago by a capital projects fund was sold by the General Fund.Entries are necessary in the:

A) General Fund only.
B) General Fund and the capital projects fund.
C) General Fund and governmental activities.
D) Governmental activities only.

E) A) and C)
F) None of the above

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Question 23

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Capital assets used by governmental funds should be reported in:

The following general capital assets were owned by the Town of Otterville: Town buildings $3,250,000 Intangible assets 1,000,000 Streets,sidewalks,and water lines 2,000,000 What amount should be recorded as capital assets in the town's governmental activities accounts?

The City of Castle Rock issued bonds at par for the construction of a new city office building.Receipt of the bond proceeds would result in journal entries in which funds?

Under the modified approach,what happens if infrastructure assets are not maintained at or above the established condition level?

Interest incurred during construction of general capital assets cannot be capitalized as part of the cost of those assets.

A government experienced significant loss of certain roadways and bridges as a result of major flooding.Which of the following estimation approaches would be most useful in estimating the amount of asset impairment that has occurred?

In the capital projects fund general journal,Construction Work in Progress is the account used to capitalize the accumulated cost of partially-completed general capital assets.

The City of Oak Park constructed a new storage facility using the city's own public works employees.Construction costs were incurred in the amount of $900,000,plus $25,000 in interest on short-term notes used to finance construction.What amount should be capitalized in the government-wide statements?

How should a capital lease for a general capital asset be recorded in the governmental activities accounts at the inception of the lease?

While the GASB encourages capitalization of all collections or individual works of art or historical treasures,governments can opt not to capitalize if certain conditions exist.

Streets,curbs,and sidewalks constructed or acquired through use of capital projects fund resources should never be reported in the financial statements of a government because they are for the use of the public,not for use by the government.

General capital assets financed wholly or partially through collections of special assessments are recorded in the same manner as any other general capital assets in the governmental activities category at the government-wide level.

(Fill in the blank.)If a city's General Fund acquires a new copier under a capital lease agreement,

Intangible assets are defined by the GASB as capital assets that lack physical substance,have a useful life of more than one reporting period,and are nonfinancial in nature.

Proceeds of debt issued for the construction or acquisition of capital assets are recognized by the capital projects fund as "other financing sources" and as a liability in the governmental activities journal.

General capital assets acquired with capital projects fund resources would be recorded in essentially the same manner as if they had been acquired by the General Fund.

Which of the following is not a requirement that must be met to elect the "modified approach" to reporting certain eligible infrastructure assets?

Which of the following is not for capital projects funds?