The GASB Codification sets forth circumstances in which a state or local government is permitted to accrue expenditures related to unmatured principal and interest on general obligation long-term liabilities. Which of the following are those circumstances?

I. Dedicated financial resources to pay the maturing principal and interest have been accumulated in a Debt Service Fund by year end.
II. The debt service payment is due early next year (within 30 days).
III. The debt service payment is due early next year (within 60 days).

Question

The GASB Codification sets forth circumstances in which a state or local government is permitted to accrue expenditures related to unmatured principal and interest on general obligation long-term liabilities. Which of the following are those circumstances?

I. Dedicated financial resources to pay the maturing principal and interest have been accumulated in a Debt Service Fund by year end.
II. The debt service payment is due early next year (within 30 days).
III. The debt service payment is due early next year (within 60 days).

Quizplus · Accepted Answer

According to GASB Codification, a state or local government can accrue expenditures related to unmatured principal and interest on general obligation long-term liabilities if dedicated financial resources to pay the maturing principal and interest have been accumulated in a Debt Service Fund by year end AND if the debt service payment is due early next year (within 30 days). So, only options I and II fulfill these criteria. Therefore, the correct answer is B.

The GASB Codification Sets Forth Circumstances in Which a State