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.

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Definitions:

Redeemable

Refers to an item or financial instrument that can be converted into cash or another financial instrument.

Bond Indenture

The contract between a corporation issuing bonds and the bondholders.

Amortization

The process of gradually writing off the initial cost of an intangible asset over a fixed period of time in a manner similar to depreciation of physical assets.

Bond Premiums

The amount by which the selling price of a bond exceeds its face value.