Adams County has outstanding $10 million in bonds issued to construct a sewer system in a specific area of the county. The taxpayers in that area voted for the construction and the bonds and agreed to assess themselves to pay the principal and interest on the bonds. The county contracted for the construction and issued the bonds but assumed no legal or moral obligation for the bonds. If the special assessment payments are not sufficient to make the required principal and interest payments, the county will not make up the difference. The liability for the $10 million of bonds should appear in which fund financial statements?

Question

Quizplus · Accepted Answer

Since Adams County has no legal or moral obligation for the bonds and will not make up the difference if the special assessment payments are insufficient, the liability for the bonds should not appear in the fund financial statements of Adams County.

Adams County Has Outstanding $10 Million in Bonds Issued to Construct