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Accounting for Governmental Entities

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Can you match the transactions to the affected funds?

(1) Proceeds of $500,000 were received from a bond issue were used for the purchase of the privately owned water utility in the city.

(2) Property taxes of $300,000 were designated to be set aside for the eventual retirement of the City Hall building bonds that were collected.

(3) Payment of $800,000 was made to a contractor for progress made in the construction of the new City Hall building.

(4) Interest of $50,000 was paid on the bonds issued for the purchase of the water utility.

(5) Interest of $100,000 was paid on the bonds issued for the payment of the improvement of streets in the residential district.

(6) City motor vehicle license fees of $40,000 were to be used for general street expenditures were collected.

(7) Bonds of $1,000,000 from which the proceeds are to be used for the construction of a new City Hall building.

(8) Salaries of $170,000 were paid to personnel in the office of the mayor.

(9) Installment payments of $75,000 were received from the property owners that were assessed for the street improvement project.

(10) Over $65,000 of funds were received by employees by payroll deductions that are to be used for the purchase of United States Government Bonds for those employees on an individual basis.

(11) Materials of $140,000 were to be used for the general repair of the streets that were purchased by the city.

(12) Excess funds of $60,000 were transferred from the water utility to the General Fund. Enterprise Fund-this is an example of reimbursement.

Options:

Enterprise Fund
Debt Service Fund
Capital Projects Fund
Capital Projects Fund, General Long-Term Debt Account Group
General Fund
Agency Fund
Enterprise Fund, General Fund

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Solution Preview

Descriptions of Governmental Funds:

Enterprise Funds - These funds should be self-supporting and operate as their own entity. For example, in a school system, things like the Nutrition fund for the cafeteria, a day-care on site, or a "store" within a school building to sell supplies or T-shirts would all operate as Enterprise funds.

Debt Service Fund - This is used for taxes, levies, or transfers for and for payment of principle and interest on general long term debt. It is only a fund to manage the cash servicing of debt. Any interest or principle paid on bonds or other long term debt would be in this category. Also, if there is leftover money in this account after the project ...

Solution Summary

This solution gives descriptions of governmental funds and types of transactions that may be used in each type of fund.

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