A government operates a landfill.In the Landfill Enterprise Fund financial statements, which of the following would be reported as a restricted asset?

Question

Quizplus · Accepted Answer

Cash received from the sale of bonds that must, based on the debt covenant, be spent only on building a new landfill runoff treatment plant would be reported as a restricted asset because it has a specific purpose and cannot be used for anything else.

Answer: A and B
 The $60,000 for catastrophic losses would be reported as a restricted asset because it has a specific purpose and cannot be used for anything else. The remaining amount of premiums that management has voted to use only for landfill expansion would also be reported as a restricted asset because it has a specific purpose and cannot be used for anything else. The cash received from the general fund that will be used only to expand the landfill would not be reported as a restricted asset because it does not have a specific purpose and can be used for other purposes if needed.

Note: Option D is not a valid answer as it does not provide any explanation for not selecting any of the given options.

A Government Operates a Landfill