The use of long-term debt is a traditional part of the fiscal policy of state an
ID: 2332082 • Letter: T
Question
The use of long-term debt is a traditional part of the fiscal policy of state and local governments.
True or False
When a lease payment is made, an entry is made in the debt service (or appropriate governmental) fund to record an expenditure, and an entry is made in the governmental activities accounts to reduce Lease Obligations Payable.
True or False
The use of encumbrance accounting is required for debt service funds.
True or False
Debt service funds for term bonds would generally include sinking fund investments.
True or False
Governmental fund liabilities and expenditures for debt service on general long-term debt are generally recognized in the reporting period that debt payments are due.
True or False
Which of the following statements is true?
Multiple Choice
Debt margin is reported in the governmental activities column of the government-wide statements.
Debt limit represents the total amount of indebtedness of specified kinds that is allowed by law to be outstanding at any one time.
Overlapping debt is a calculation of the difference between the amount of debt limit calculated as prescribed by law and the net amount of outstanding indebtedness subject to limitation.
All of the given statements are true.
Explanation / Answer
1
The use of long-term debt is a traditional part of the fiscal policy of state and local governments.
Answer: True
_______________________________
2
When a lease payment is made, an entry is made in the debt service (or appropriate governmental) fund to record an expenditure, and an entry is made in the governmental activities accounts to reduce Lease Obligations Payable.
Answer:
True
________________________________________
3
T he use of encumbrance accounting is required for debt service funds.
Answer: False
______________________________
4
Debt service funds for term bonds would generally include sinking fund investments.
Answer: True
______________________________
5
Governmental fund liabilities and expenditures for debt service on general long-term debt are generally recognized in the reporting period that debt payments are due.
Answer: True
__________________________________
6
Which of the following statements is true?
Answer:
Debt limit represents the total amount of indebtedness of specified kinds that is allowed by law to be outstanding at any one time.
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