Acc 410 quiz ch 6-7

This quiz consist of 30 multiple choice questions. The first 15 questions cover the material in Chapter 6. The second 15 questions cover the material in Chapter 7. Be sure you are in the correct Chapter when you take the quiz.

Question 1

4 out of 4 points

A governmental entity has elected to issue new debt and use the proceeds to redeem existing debt because there is an economic gain in doing so.  There is, however, an ‘accounting loss’ associated with these events.  An accounting loss is defined as

Answer

Selected Answer:

The cash paid to redeem the old debt less the book value of the old debt.

Correct Answer:

The cash paid to redeem the old debt less the book value of the old debt.

Question 2

4 out of 4 points

Six years ago Hill City issued $10 million of 6% term bonds, due 30 years from the date of issue.  Interest on the bonds is payable semi-annually on January 1 and July 1.  Hill City has a September 30 fiscal year end.  The amount of interest payable that would be included on the balance sheet for the debt service fund of Hill City at September 30 would be

Answer

Selected Answer:

$  -0-

Correct Answer:

$  -0-

Question 3

4 out of 4 points

With regard to the resources dedicated to the acquisition of fixed assets which will be used in general government activities, which of the following is true?

Answer

Selected Answer:

Governments must maintain capital project funds for resources that are legally restricted to the acquisition of fixed assets.

Correct Answer:

Governments must maintain capital project funds for resources that are legally restricted to the acquisition of fixed assets.