A deficit unassigned fund balance was reported in a city Capital Projects Fund balance sheet. Which of the following explanations for the deficit is not plausible?
A. The city financed a substantial portion of the project in the previous year.
B. The city financed current year expenditures by issuing bond anticipation notes that are not general long-term liabilities.
C. The city entered into a two-year construction contract. Transfers from the General Fund will be made each year to cover actual expenditures.
D. The city had a large assigned fund balance.
Question 2
An adjusting entry would adjust an expense account so the expense is reported when incurred.
a. True
b. False
Indicate whether the statement is true or false
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