Answer:
C. Debt service funds account for and report financial resources that are restricted, committed or assigned to expenditure for principle and interest for governmental debts except debt of proprietary and fiduciary funds who account for their own interest and principle payments.
Explanation:
Debt service funds are used to pay for principal and interest on certain types of debts. This reduced the risk of debt security that investors face and also reduces the effective rate at which the offering can be sold.
However debt service funds cannot be used for proprietary funds like 400 and 500.
Instead we use Enterprise funds for 400. That is operations similar to corporate enterprise. For example water and sewage utilities.
Internal service funds for 500 used by other funds or departments bin a government in a cost reimbursement basis. For example a food supplier that takes orders and is reimbursed for each order.
D sounds like the best answer
Answer:
TRUE
Explanation:
It is true that under the all-events test, in addition to specifying that all events to establish the liability must have occurred, the test also provides that the business must be able to determine the amount of the liability with reasonable accuracy
Under Sec. 461(h), a three-prongall-events test is met when
(1) all events have occurred that establish the fact of the liability;
(2) <u>the amount of the liability can be determined with reasonable accuracy</u>; and
(3) economic performance has occurred.
