Chapter 8

Question 0

How are LT obligations recorded

Answer 0

at face value or amoritzed issue price

GASB Stand #34 requires governments to report bonds and LT obligations at PV

Question 1

All general long-term debt is reported

Answer 1

in the governmental activities column of the government-wide statement of net assets

Question 2

Long-term obligations in the fund statements?

Answer 2

No, schedule of Long Term Debt

Question 3

OFS

Answer 3

Other financing sources

Question 4

Short term debts expected to be liquidated with currently available assets

Answer 4

are reported in governmental funds

Question 5

RANS

Answer 5

REvenue Anticipation Notes

Question 6

TANS

Answer 6

Tax Anticipation Notes

Question 7

RANS and TANS are

Answer 7

short term notes payable that are of specified streams of rev.
Issued to meet cash needs earlier in the yr.
They are NOT converted into long term instruments
Must be account for in the funds in which the rev. will be reported

Question 8

BANS

Answer 8

Bond Anticipation Notes

Question 9

Bans are

Answer 9

short term notes issued wiht the expectation that it will be replaced with Long Term Bonds
(Long Term if refinanced, or an agreement that doesn’t expire in q yr has not been violated and is capable of being honored by lender)

Question 10

Capital Leases

Answer 10

financing arrangements. Lesse purchases an asset in exchange for a long term note

Question 11

Operating Leases

Answer 11

conventional rental agreements. Lesse uses property for a portion of its useful life.

Question 12

nonappropriation clause or fiscal funding clause

Answer 12

permits governments to cancel the lease at the end of each yr.

Question 13

Direct debt

Answer 13

Debt that a government unit has incurred in its own name or assumed through the annexation of territory or consolidation with another governmental unit. Obligations that will be repaid by the government whose debt is being evaluated.

Question 14

Debt limit

Answer 14

usually a ceiling on the amount of debt. Max amount of gross or net debt that is legally permitted

Question 15

Debt margin

Answer 15

difference between the debt limit and the net amount of debt outstanding subject to the limit

Question 16

Moral Obligation debt

Answer 16

bonds/notes issued by one entity but backed by the promise of another entity. It is motivated to avoid voter approvals or to circumvent debt limitations

Question 17

Overlapping debt

Answer 17

obligations of other governments that also have the power to tax property located in the jurisdiction of the government whose debt is being evaluated

Question 18

Conduit Debt

Answer 18

Obligations issued in the name of government on behalf of a non-governmental entity