Gov Exam 2 – Ch 6: General Long-Term Liabilities & Debt Service

In some jurisdictions, bond issues require approval through ______.

a public referendum or taxpayer petition

Which of the following is prepared to show the total amount of indebtedness being supported by taxable property located within the boundaries of the reporting government?

statement of direct and overlapping debt

Any portion of special assessment debt that will be repaid directly by the government should be reported as a(n) ______ long-term liability of the government.

general

Debt service payments, including both periodic interest payments and the repayment of debt principal when due, are typically specified in a

bond indenture

In which fund(s) are debt services related to long-term liabilities specifically reported as expenses of that fund?

the proprietary or fiduciary fund

GASB standards provide that, if legally permissible, a single debt service fund can be used to account for which of the following?

the service of all issues of tax-supported and special assessment debt

What is the use of an actuarial basis for determining the required revenues of term bond debt service funds?

Designed to produce approximately level contributions during the life of the issue.

A town issues term bonds. Property taxes that were levied for debt service on those bonds for the current year but not collected during the year become delinquent as of December 31. The portion considered collectible is expected to be received within 60 days of year-end and can be included in tax revenue for the

current year

The entry to record accrued interest sold in the Debt Service Fund journal includes a credit to which of the following?

Revenues

At the government fund level, debt issuance costs are recognized as a(n)

expenditure

According to GASB standards, how should lease payments be structured in government-wide financial statements?

they should be divided into a partial payment on the lease obligation and interest on the unpaid balance

Which of the following bond issuance costs are not expensed at the time of the bond issuance at the government-wide level?

prepaid insurance

If a bond anticipation note is short-term, where is repayment recorded?

capital projects fund

When determining how capital lease payments are allocated to interest and principal, GASB standards specify that a ______ periodic rate of interest must be used.

constant

Special assessment bonds, secondarily backed by the general taxing authority of a city, were previously issued to complete a project within a neighborhood. Upon project completion, the city levied assessments amounting to $200,000, payable in 4 equal installments with 5% interest on unpaid installments, on owners of properties in that neighborhood. Before the second installment payments for principal and interest are made, an entry is recorded in the Debt Service Fund journal with a debit to which of the following?

deferred inflow of resources for $50,000

What must be followed to maintain tax-exempt status in advance refunding?

arbitrage rules under IRC

Governments should report an estimated loss from a claim as an expense and as a liability in the government-wide financial statements if a claim is reasonably estimable and

probable

Under the modified accrual basis, when should compensated absences be recognized as expenditure?

when accrued and expected to be liquidated with available resources