Typical Items and types of transactions events

Question 1

A city council designates funds in the enterprise fund for future equipment replacement. The enterprise fund should report this as

Answer 1

Unrestricted

Question 2

“net investment in capital assets,” at an amount calculated as

Answer 2

the total of capital assets less depreciation and outstanding mortgages or bonds reduced by any significant unspent proceeds

Question 3

Inventory and Prepaid items would be included in which Fund Balance Category?

Answer 3

Non Spendable

Question 4

Town City has one capital projects fund with assets of $3,000,000, liabilities of $400,000, and outstanding encumbrances of $2,000,000. On the balance sheet prepared at the end of the year, the fund balance would be displayed as:

Answer 4

Fund balance—committed, $2,000,000; Fund balance—assigned, $600,000