Which of the Following Statements Regarding Debt Service Funds Is

question 4

Multiple Choice

Which of the following statements regarding debt service funds is ?

• A) Given the size and relevance of general long-term liabilities, debt service funds are always reported as major funds.
• B) GASB standards require a separate debt service fund to be established for each issuance of tax-supported or special assessment debt.
• C) A debt service fund is used only for debt service activities related to general long-term liabilities.
• D) Annual budgets must be prepared for debt service funds and reported in the statement of revenues, expenditures, and changes in fund balances-budget and actual.

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Definitions:

Labor Rate Variance

The variance between the real labor expenses and the anticipated (or benchmark) cost.

Labor Efficiency Variance

The gap between the number of hours actually worked and the number of standard hours projected, multiplied by the standard wage rate.

Direct Labor

The expenses associated with salaries for workers directly involved in the creation or production of products.

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the expected quantity, based on standards.