Which of the Following Is True for Debt Service Funds

question 63

Multiple Choice

Which of the following is true for debt service funds?

• A) A legally required budget should be recorded in the accounts.
• B) A combining balance sheet may not be prepared for a comprehensive annual financial report (CAFR)when more than one debt service fund exists.
• C) Encumbrance accounting is often used.
• D) GAAP requires that a separate debt service fund be established for each bond issue.

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Definitions:

Rational Choice

is a theory that assumes individuals make decisions based on the maximization of personal advantage, weighing benefits against costs.

Implicit Favorite

An often unrecognized bias towards a person or option that influences decision-making and judgment without conscious awareness.

Alternatives Sequentially

The process of considering and evaluating different options one after another in a systematic order.

Mental Models

Internal representations of the external world that individuals use to understand and interact with their environment.