For each of the items below, i
For each of the items below, identify which fund(s) would beused to account for the item and provided a justification for youranswer.
a. A city government issues general obligation bonds to financethe construction of a new jail.
b. A tax of $1.00 per residential phone number is collected by acity government from the phone company. This amount is required bystate kaw ti be used for the operation of the 911 emergency phoneservice.
c. A country goverment expended $1 million to expand the watertreatment plant.
d. A donor provided investements totaling $4 million to createan endowmeent, the earnings of which will be used to providescholarships.
e. A donor provided $50,000 to be used to purchase newpaper andmanazine subscriptions for the public library. There is norequirement that the original principal may not be spent.
f. A city government sold surplus street mainenance trucks for$10,000.
g. A city goverment contributed $500,000 to a pension planadministered by the city for its teachers, public safety employees,and employees of the water department.
Answer:
a. General funds and capital project funds. It is referred asgeneral fund as it is from a general obligation bond and it isreferred as capital project fund as it is designated for a newbuilding.
b. Enterprise funds. It is referred as enterprise funds becausetax on the phone service are proprietary funds.
c.Capital project funds. It is referred as capital project fundsbecause these funds are spent for a specific project by thegovernment.
d. Permanent funds. It is referred as permanent funds onlyearnings are allowed to be used.
e. Debt service funds. It is referred as debt service fundsbecause the usage of these funds is restricted
f. General fund. It is referred a general fund as there is noother fund can be related to sale of capital assets.
g. Pension and employee benefit fund. It is referred a pensionand employee benefit fund because it is considered as fiduciaryfunds and government acts as a trustee.
"Our Prices Start at $11.99. As Our First Client, Use Coupon Code GET15 to claim 15% Discount This Month!!"
