Which of the following statements is false?Unmatured principal installments and accrued interest which is due shortly after year end are required to be reported as liabilities in the debt service fund at year end.An encumbrance in a capital project fund is created when the contract for the work is signed or issued.Premiums generated from the issuance of bonds for a capital projects fund are generally transferred to the Debt Service Fund.If taxes are levied specifically for payment of interest and principal on long-term debt, those taxes are recognized as revenues of the Debt Service Fund.

Liabilities should be reported when the transaction resulted in the amount that needs to be paid in…

Answered: Which of the following statements is…

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Which of the following statements is false?

Unmatured principal installments and accrued interest which is due shortly after year end are required to be reported as liabilities in the debt service fund at year end.
An encumbrance in a capital project fund is created when the contract for the work is signed or issued.
Premiums generated from the issuance of bonds for a capital projects fund are generally transferred to the Debt Service Fund.
If taxes are levied specifically for payment of interest and principal on long-term debt, those taxes are recognized as revenues of the Debt Service Fund.