ACG4501 EXAM 2 REVIEW QUESTIONS AND ANSWERS

ACG4501 EXAM 2 REVIEW QUESTIONS AND ANSWERS
Are capital assets recorded in governmental funds? - CORRECT ANSWER✅✅No — only in government-
wide and proprietary funds



Where are capital assets recorded? - CORRECT ANSWER✅✅Government-wide statements and
proprietary funds



Is depreciation recorded in governmental funds? - CORRECT ANSWER✅✅No



Where is depreciation recorded? - CORRECT ANSWER✅✅Government-wide and proprietary funds



How are donated capital assets recorded? - CORRECT ANSWER✅✅At acquisition value (fair value) at
donation date



Sale of capital asset (governmental fund)? - CORRECT ANSWER✅✅Record as Other Financing Source
(no gain/loss)



Sale of capital asset (government-wide)? - CORRECT ANSWER✅✅Recognize gain or loss



How are leases treated? - CORRECT ANSWER✅✅As financing transactions (right-to-use asset and
liability)



Bonds in governmental funds? - CORRECT ANSWER✅✅Recorded as Other Financing Source



Bonds in government-wide statements? - CORRECT ANSWER✅✅Recorded as long-term liabilities



Premium on bonds? - CORRECT ANSWER✅✅Increases carrying value of bonds



Discount on bonds? - CORRECT ANSWER✅✅Decreases carrying value of bonds