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Subject Topic: MC about governmental accounting (Topic Closed Topic Closed) Post ReplyPost New Topic
  
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yahoofan
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Posted: 09 Nov 2009 at 16:51 | IP Logged  

Hi everyone,
I was stuck at the MC 01012 as follows:

The following information pertains to certain monies held by Blair County at December 31, 1992, that are legally restricted to expenditures for specified purposes:
1. Proceeds of short-term notes to be used for advances to private purpose trust funds $8,000
2. Proceeds of long-term debt to be used for a major capital project 90,000 .
What amount of these restricted monies should Blair account for in special revenue funds?
a. $0
b. $8,000
c. $90,000
d. $98,000



Explanation
Choice "a" is correct. Special revenue funds account for the proceeds of specific revenue sources (other than
permanent funds or for major capital projects) that are legally restricted to expenditures for specific purposes. The
$8,000 is for the private purpose trust funds, which would account for it. The $90,000 is for a major capital project,
which would be accounted for in a capital projects fund.
Choice "b" is incorrect. The $8,000 is for the private purpose trust funds, which would account for this money.
Choice "c" is incorrect. The $90,000 is accounted for in the capital projects fund.
Choice "d" is incorrect. The $8,000 is accounted for in the private purpose trust funds. The $90,000 is accounted
for in the capital projects fund.

If you understand how they get answer a, can you please explain. Thanks a lot!


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AG_CPA
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Posted: 09 Nov 2009 at 21:29 | IP Logged  

Yahoofan,

As you know there are 5 governmental funds (GRaSPP), 2
proprietary funds (SE) and 4 fiduciary (aka trust) funds
(PAPI). The call of the question is how much to account for
in Special Rev fund (Govt). Since the fact says 1 relates
to trust funds and 2 capital projects fund, you don't
really account anything under special rev fund instead they
are accounted for in individual funds Trust and Cap
projects.

hope this helps

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yahoofan
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Posted: 10 Nov 2009 at 06:11 | IP Logged  

I see. Thanks a lot for clarification. 

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