[jeff]

Welcome to the Q1 2017 CPA Exam Study Group for FAR. 🙂

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[Anonymous]

@mtaylo24

The capital projects fund is use for acquiring or constructing capital facilities (i.e police cars or buildings)

Debt Service fund is used to pay interest and principal payments on short- and long-term debts

Think of the capital projects funds as being used to fund a “project” and debt service fund is used to pay off debt. Hope that helps

[mckan514w]

Thanks- Mtaylo-

and they ask me why I drink...

FAR- 61-next time I'll ask for lube instead of a calculator
REG-75- Never been so happy to see such a low grade
BEC- 8/11
AUD- 9/2

[mtaylo24]

Thanks King. I can't seem to identify the key words/phrases in the questions below:

Central County received proceeds from various towns and cities for capital projects financed by Central’s long-term debt. A special tax was assessed by each local government, and a portion of the tax was restricted to repay the long-term debt of Central’s capital projects. Central should account for the restricted portion of the special tax in which of the following funds?

A. Internal service fund.
B. Enterprise fund.
C. Capital projects fund.
D. Debt service fund.
Answer (D) is correct.

La Chua County issued bond anticipation notes and recorded the proceeds in the capital projects fund. The county subsequently failed to take the necessary legal steps to refinance the notes. Accordingly, the notes should be reported as a liability in the

A. Government-wide financial statements but not the fund financial statements.
B. General fund.
C. Capital projects fund.
Answer (C) is correct.
D. Debt service fund.

AUD - 1st - 60 (12/12), 61 (2/13), 61 (8/13), 78! (11/15)
REG - 55 (2/16) 69 (5/16) Retake(8/16)
BEC - 71(5/16) Retake (9/16)
FAR - (8/16)

[GiniC]

Hey everyone – back in here taking a break from scaring myself silly.

@Mscfisher – I'm testing March 9

@mtaylo24 and @mckan514w – special REVENUE fund accepts revenue from specific sources, like taxes or fees assessed for sewer connections. No donations!!!. Permanent funds are ones where the principle is PERMANENT – can't be spent, only the income can be used, often for a donor-stipulated purpose.

It's 72 here in New England – sunny and awesome. I can hear all the kids playing on the final day of winter vacation (so sorry for the families who paid to go to a warm place this week!!!). At 4 PM I'm going for a walk, no matter what!!!

[GiniC]

@mtaylo24 – Debt Service just collects resources for use in paying debt. capital projects funds is for the process of getting something built or bought. Capital projects fund is a GRaSPP fund, so is modified accrual and holds no long term debt itself, but will get proceeds of borrowing as “other financing sources”- some other government account/entity does the borrowing and actually holds the debt.

[GiniC]

@mtaylo24 – The second one caught me.

Bond anticipation notes (?? didn't know what they were) but they have proceeds so they're notes payable, presumably short term in “anticipation” of proceeds from bonds about to come due? If they're short term, then can be a current liability so the capital Projects fund can hold them – but I don't know why they land there. Was there any explanation?

[mckan514w]

I seriously do not get how it can be that this is the third freaking time I have studied for this test and I still can not score above 58% on these Govt. questions-

I am treating myself to a nice walk to a pub for a beer at 5… no matter what!!! enjoy your walk GiniC

and they ask me why I drink...

FAR- 61-next time I'll ask for lube instead of a calculator
REG-75- Never been so happy to see such a low grade
BEC- 8/11
AUD- 9/2

[Anonymous]

Ok I'm sitting for this beast on Monday. I've been riddled with anxiety up until about two days ago. Now that I'm trending at 88%, I'm feeling way better and think I'll nail down the weaker spots today, and do random questions Sat. Sunday is my no-study day. Hasn't failed me yet. Although…this is FAR 😀

Anyone have any last minute suggestions or have a pretest ritual they do?

BTW, I'm using Becker, Ninja Notes/Audio/MCQ

[mtaylo24]

@GiniC, Thanks. Gleim is telling me that donations for programs to be administered by the government are accounted for in the special revenue funds.

Here is the explanation for the second one….

Answer (C) is correct.
Bond anticipation notes of governmental funds are reported only in the governmental activities column of the government-wide statement of net position if (1) all legal steps have been taken to refinance the notes and (2) the intent is supported by an ability to consummate the refinancing on a long-term basis. If these criteria are not met, the bond anticipation notes must be reported as a short-term liability in the fund in which the proceeds are recorded (as well as in the governmental activities column of the government-wide statement of net position).

AUD - 1st - 60 (12/12), 61 (2/13), 61 (8/13), 78! (11/15)
REG - 55 (2/16) 69 (5/16) Retake(8/16)
BEC - 71(5/16) Retake (9/16)
FAR - (8/16)

[mckan514w]

So I actually know this one from my investment banking- water-sewer bond days 🙂

a BAN is a short-term note- Bond Anticipation Note– it is issued with the anticipation that a long-term Bond is coming- its kind of the fixed income version of a bridge loan- for whatever reason the underwriters/ Investment Bankers have not hammered out all of the details for a Bond- the municipality needs funding ASAP- so a BAN is issued as a “stop-gap”- it offers investors a high yield short-term investment- usually like 90 days. Proceeds from the bond issue pay-outthe BAN holders- So really in theory it is not debt but more like a loan. If the municipality allowed the BAN to expire it means that they must somehow find the money to pay for it themselves- i.e. there is no bond funding coming to pay the investors out- it is a current liability because investors are going to want their money. Since it is current it would show in the fund statement-

and they ask me why I drink...

FAR- 61-next time I'll ask for lube instead of a calculator
REG-75- Never been so happy to see such a low grade
BEC- 8/11
AUD- 9/2

[mtaylo24]

^^Thanks McKan. Don't feel bad, I'm still trash at government on my third attempt as well. I went downhill with each study unit in ch. 18 today smh! I'm going to switch gears over to BEC in order to get my confidence up LOL

AUD - 1st - 60 (12/12), 61 (2/13), 61 (8/13), 78! (11/15)
REG - 55 (2/16) 69 (5/16) Retake(8/16)
BEC - 71(5/16) Retake (9/16)
FAR - (8/16)

[cdn]

thanks to you guys – now I know difference for special revenue (to fix something) whereas capital to start a new. Yupi

[Spartans92]

@mckan and @mtaylo, for Gleim how much is it? and what comes with the “package” ? just the books and mcq.. Im not looking to spend too much since I'm tight on money and I have spent too much on these exams. LOL. trying to spend the least and squeak by with a pass.

BEC- PASS

[Sticky Nicky]

wondering if i should continue studying in case of a bad score release in 2 weeks? what u think guys?

[mtaylo24]

@spartans92, I think you can get the 250 TB, that comes with the 2500 questions tb, sims, and a physical/e-book. If you pay 389 for the standard package, they have everything from the megatb, but also audiovisual powerpoints, summaries, t/f questions, ifrs appendix, and audios.

AUD - 1st - 60 (12/12), 61 (2/13), 61 (8/13), 78! (11/15)
REG - 55 (2/16) 69 (5/16) Retake(8/16)
BEC - 71(5/16) Retake (9/16)
FAR - (8/16)

[Author]

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