In Reconciling the Total Fund Balances of the Governmental Funds

question 46

Multiple Choice

In reconciling the total fund balances of the governmental funds to the net position of governmental activities, which of the following would be added to the net position of governmental activities?

• A) Accumulated depreciation.
• B) Premium on bonds payable.
• C) Construction work in progress.
• D) Bond interest payable.

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Definitions:

Long-term Debt

Debt that is due to be paid back over a period greater than one year, used as a way for businesses to finance their operations or expand.

Debentures

A type of debt instrument that is not secured by physical assets or collateral but is backed by the general creditworthiness and reputation of the issuer.

Mortgage Bonds

These are fixed-income securities secured by a specified pool of mortgages, providing an income stream derived from mortgage interest payments.

Unsecured

Refers to loans or bonds that are not protected by collateral, making them riskier investments.