Government Debt Service Funds Quiz

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Which type of activities may a government be involved in, according to the text?

General, Specific, and Specialized activities

Legislative, Executive, and Judicial activities

Governmental, Business-Type, and Financial activities (correct)

Public, Private, and Hybrid activities

What are examples of Business-Type Activities that governments engage in?

Parks and recreation facilities

Data processing and finance departments

Public utilities and transportation systems (correct)

Cultural and social services

In what capacity do governments often act when dealing with parties outside the government?

Legislative

Fiduciary (correct)

Administrative

Judicial

Which of the following is NOT a core service provided by most general purpose governments?

Data processing Signup and view all the answers

What is the purpose of many Business-Type Activities engaged in by governments?

To be self-supporting by charging users for services Signup and view all the answers

Which term best describes the role of a government acting as an agent or trustee for parties outside the government?

Fiduciary Signup and view all the answers

What is the primary purpose of a debt service fund?

To account for financial resources segregated for principal and interest payments on general long-term debt Signup and view all the answers

When would a government be required to create a debt service fund?

When having outstanding bond obligations or certain other long-term general liabilities Signup and view all the answers

What distinguishes a permanent fund from a private-purpose trust fund?

The beneficiaries of the fund earnings Signup and view all the answers

Why might a government choose to establish a private-purpose trust fund instead of a permanent fund?

To benefit only private individuals or organizations Signup and view all the answers

In governmental accounting, what is the primary focus when accounting for governmental funds?

Tracking inflows and outflows of current financial resources Signup and view all the answers

What would be an appropriate use of earnings from a permanent fund according to the text?

Supporting maintenance of public buildings Signup and view all the answers

Why is accrual accounting essential for governments in the context of providing business-type services?

To determine the full cost of providing services Signup and view all the answers

What primarily differentiates internal service funds from enterprise funds?

Their reporting structure Signup and view all the answers

In what instances do enterprise funds account for operations?

When the costs of providing goods or services to the general public are primarily covered through user charges Signup and view all the answers

Why do internal service funds exist?

To provide goods or services to other departments or agencies Signup and view all the answers

What drives the periodic determination of revenues earned, expenses incurred, and net income in enterprise funds?

Capital maintenance and management control Signup and view all the answers

Why is it important for governments to report on whether business-type activities are covering their full cost of operation?

To ensure transparency and accountability in financial reporting Signup and view all the answers

In governmental accounting, which fund is typically used to account for departmental operating activities like the city manager’s office and finance?

General Fund Signup and view all the answers

When tax or grant revenues are legally restricted for specific operating purposes like maintenance of roads or operation of a library, which fund type is generally created?

Special Revenue Fund Signup and view all the answers

Which fund type is typically created to account for financial resources used in the acquisition or construction of major capital facilities?

Capital Projects Fund Signup and view all the answers

In government accounting, what is the purpose of a Special Revenue Fund?

Account for tax or grant revenues legally restricted for particular operating purposes Signup and view all the answers

When tax or grant revenues are embarked for a capital project, which fund type is typically created to account for these resources?

Capital Projects Fund Signup and view all the answers

What is the primary reason governments engage in capital projects according to the text?

To replace existing capital assets Signup and view all the answers

Which of the following should not be depreciated?

Inexhaustible assets like land Signup and view all the answers

What should be done when reporting donated capital assets?

Report at their estimated fair value at the time of acquisition plus ancillary charges Signup and view all the answers

Which financial statement should include depreciation expense?

Statement of revenues, expenses, and changes in fund net assets Signup and view all the answers

According to Principle 8, what should be distinguished in financial reporting?

Fund long-term liabilities Signup and view all the answers

In the government-wide financial statements, what measurement focus and basis of accounting should be used?

Accrual basis and economic resources measurement focus Signup and view all the answers

When are revenues, expenses, gains, losses, and liabilities recognized in government-wide financial statements?

When they are incurred even if cash hasn't been exchanged yet Signup and view all the answers