The use of long-term debt is a traditional part of the fiscalpolicy of state and local governments.
True or False
When a lease payment is made, an entry is made in the debtservice (or appropriate governmental) fund to record anexpenditure, and an entry is made in the governmental activitiesaccounts to reduce Lease Obligations Payable.
True or False
The use of encumbrance accounting is required for debt servicefunds.
True or False
Debt service funds for term bonds would generally includesinking fund investments.
True or False
Governmental fund liabilities and expenditures for debt serviceon general long-term debt are generally recognized in the reportingperiod that debt payments are due.
True or False
Which of the following statements is true?
Multiple Choice
Debt margin is reported in the governmental activities column ofthe government-wide statements.
Debt limit represents the total amount of indebtedness ofspecified kinds that is allowed by law to be outstanding at any onetime.
Overlapping debt is a calculation of the difference between theamount of debt limit calculated as prescribed by law and the netamount of outstanding indebtedness subject to limitation.
All of the given statements are true.
