Governmental and Nonprofit Accounting (11th Edition)
11th Edition
ISBN: 9780133799569
Author: Robert J. Freeman, Craig D. Shoulders, Dwayne N. McSwain, Robert B. Scott
Publisher: PEARSON
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Question
Chapter 6, Problem 2.5E
To determine
Identify the correct statement based on the concern with accounting and financial reporting for capital lease:
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Students have asked these similar questions
6. When a capital lease is used to acquire general fixed
assets, the governmental fund acquiring the fixed assets
records a(n)
at the
a. expenditure, lease payment cost.
b. fixed asset, lease payment cost.
c. expenditure, present value of the minimum lease
payments.
d. fixed asset, present value of the minimum lease
navments.
Revenues that are legally restricted to expenditures for specified purposes should be accounted for in special revenue funds, includinga. accumulation of resources for payment of general long-term debt principal and interest.b. pension trust fund revenues.c. gasoline taxes to finance road repairs.d. proprietary fund revenues.
For a government that has a trust fund in which it is accumulating sufficient assets to pay OPEB, the net
OPEB liability should be reported in both the governmental fund balance sheet and the government-
wide statement of net position.
A. True
B. False
Chapter 6 Solutions
Governmental and Nonprofit Accounting (11th Edition)
Ch. 6 - Distinguish between an expenditure in the...Ch. 6 - Prob. 2QCh. 6 - On January 2, 20X1, materials costing 100 were...Ch. 6 - A city entered into a capital lease of equipment...Ch. 6 - Is a governments nonspendable fund balance in the...Ch. 6 - Prob. 6QCh. 6 - Prob. 7QCh. 6 - Prob. 8QCh. 6 - Prob. 9QCh. 6 - A government uses the purchases method to account...
Ch. 6 - Prob. 1ECh. 6 - Prob. 2.1ECh. 6 - Prob. 2.2ECh. 6 - An Expenditures account in a General Fund should...Ch. 6 - Both the periodic and perpetual inventory systems...Ch. 6 - Prob. 2.5ECh. 6 - Assume a governmental entity enters into a capital...Ch. 6 - Prob. 2.7ECh. 6 - Prob. 2.8ECh. 6 - (Various Entries) Record the following...Ch. 6 - (Capital Lease Entries) Record the following 20X8...Ch. 6 - Prob. 5ECh. 6 - (Purchases vs. Consumption Method) The city of...Ch. 6 - (Capital Outlay; InventoryPurchases Method) (a)...Ch. 6 - (Capital Outlay; InventoryConsumption Method) (a)...Ch. 6 - Record the following 20X9 transactions in the...Ch. 6 - Prob. 5PCh. 6 - (GL and SL EntriesErrors, Pensions, Changes,...Ch. 6 - Prob. 8PCh. 6 - Prob. 10PCh. 6 - Prob. 1CCh. 6 - Prob. 2CCh. 6 - Prob. 1CC
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- Which of the following adjustments is necessary to move from governmental fund financial statements to government-wide financial statements? a. Eliminate expenditures for debt principal b. Eliminate expenditures for capital outlay and add depreciation expense c. Both of the above d. Neither of the abovearrow_forwardThe acquisition of capital assets by a special revenue fund would be shown as: O a. long term asset O b. short term asset (supplies) O c. expenditure O d. cannot have capital acquisitions in governmental funds Oe. expensearrow_forwardHow to record a trade-in? A.) Government Wide :Record at ticket price of the new asset B.) Fund statement: only the cash aspects of the transaction be recognized as expenditures C.) Losses and gains should be recognized on fund statements. D.) No losses and gains should be recognized on government wide financial statementarrow_forward
- 33) When a capital lease is used to lease fixed assets for the general government, the governmental fund acquiring the fixed assets debits ________ at the ________. A) expenditures; future value of the lease payments B) fixed assets; future value of the lease payments C) expenditures; present value of the lease payments D) fixed assets; present value of the lease payments 34) When recording an approved budget into the accounts of the general fund, which of the following accounts would be credited? A) Appropriations B) Encumbrances C) Estimated revenues D) Revenue collected in advance 35) When a city enters into a capital lease for a fixed asset for the general government, A) government-wide statements will report the asset and liability for the leased asset. B) government-wide statements will not report the liability, Capital Lease Obligation. C) governmental fund statements will report a fixed asset. D) governmental fund statements will report a liability, Capital Lease…arrow_forwardIn the government-wide financial statements, the assets acquired under a capital lease would be reported at the total of all payments required under the lease. the present value of the required lease payments. the undiscounted total of required lease payments. they are not reported in the government-wide financial statements.arrow_forwardA donated fixed asset (from a governmental unit) for which the fair value has been determined should be recorded as a debit to Fixed Assets and a credit to: a. Contributed Capital b. Retained Earnings c. Deferred Income d. Other Incomearrow_forward
- What amount should be reflected in the reconciliation of the fund balance sheet to the government-wide statement of net position for "fiduciary fund net assets" (hint: this is only governmental activities in the government-wide financial statements)?arrow_forwardIn a governmental fund, which of the following is considered an expenditure? a. The purchase of a capital asset b. The consumption of supplies c. Salaries earned by employees d. All of the abovearrow_forwardWhich of the following is true regarding government grant related to asset? *a. Depreciation is higher and net income lower if the grant is recorded as deferred revenueb. Depreciation is higher and net income lower if the grant is an adjustment to the assetc. Depreciation is higher if the grant is a deferred revenue and net income is not affectedd. Depreciation is higher if the grant is adjustment of the assetarrow_forward
- Use the following information to determine whether the Development Special Revenue and the Debt Service Funds should be reported as major funds based on asset amounts provided. Various Assets and Amounts Asset Type Development Special Revenue Fund Assets Debt Service Fund Assets Total Governmental Fund Assets Total Governmental Fund and Enterprise Fund Assets Both the Development Special Revenue Fund and the Debt Service Fund should be reported as major. Neither the Development Special Revenue Fund nor the Debt Service Fund should be reported as major. The Development Special Revenue Fund should be reported as major. The Debt Service Fund should be reported as major. Asset Amount $ 740,000 $ 150,000 $ 7,500,000 $8,750,000arrow_forwardFiduciary activities should be reported in fund statements, but should be excluded from the government-wide statements. a. True b. Falsearrow_forwardAll of the following statements are true concerning the conversion of governmental funds to governmental activities except a. Depreciation expenditure reported in governmental funds simply becomes depreciation expense in governmental activities. b. A decrease in the long-term liability for compensated absences will result in expenses of various functions at the government-wide level being less than expenditures at the governmental fund level. c. Assuming capital outlay expenditures all reflect purchases of capital assets as per the government's capitalization threshold policy, capital outlay expenditures simply become additions to capital assets. d. Bonds payable are not reported in the governmental funds financial statemarrow_forward
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