Use the Following Information to Answer Questions

question 30

Multiple Choice

Use the following information to answer questions
The citizens of a specific area of the City of Arlington approved the construction of sidewalks in their residential neighborhood and approved a $1 million bond issue to finance construction of those sidewalks.The citizens agreed to a special assessment on their property for 20 years in an amount sufficient to pay principal and interest on the bonds.The City will oversee the construction of the sidewalks and act as agent for servicing the debt.If the special assessment is not sufficient to make the principal and interest payments, the City will assume the obligations.
-When the City of Arlington levies the special assessment tax, the best entry would be

• A)Debit Special assessments receivable; Credit Revenues.
• B)Debit Special assessments receivable; Credit Deferred revenues.
• C)Debit Special assessments receivable; Credit Liability.
• D)Debit Special assessments receivable; Credit Fund balance.

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Definitions:

Warranty Of Fitness

A guarantee provided by a seller that the goods or services sold will be appropriate and suitable for the specified purpose.

Express Warranty

A clearly stated guarantee provided by a seller regarding the condition or quality of a product.

Implied Warranty

An unwritten, unstated guarantee that a product will meet basic standards of quality and reliability.

Express Warranty

A seller's explicit promise or guarantee, assuring the quality or performance of a product, often included in the written contract.