Which of the Following Is True Regarding Capital Projects Funds

question 14

Multiple Choice

Which of the following is true regarding capital projects funds?

• A) Capital projects funds are considered to be governmental funds.
• B) Capital projects funds use the economic resources measurement focus and accrual basis of accounting.
• C) Encumbrance accounting is not used.
• D) Fixed assets are depreciated in capital projects funds.

Understand the specific industry guidance on revenue recognition under GAAP and IFRS.

Analyze when to use completed-contract vs. percentage-of-completion methods for accounting in long-term construction projects.

Discuss differences in future cost estimate treatments in construction contracts under GAAP and IFRS.

Advise on theoretical issues associated with recording revenue in new business ventures.

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Definitions:

Vendors And Suppliers

Businesses or individuals that provide products or services to other entities as part of the supply chain.

Payments

Transactions involving the transfer of money or valuables in exchange for goods, services, or to fulfill obligations.

Cost Reimbursable Contract

A type of contract where the purchaser agrees to pay the supplier for actual costs incurred plus a fee or profit.

Fixed Fee

A pre-determined and agreed-upon total charge for a specific service or project, not subject to change based on the amount of time or resources used.