Question

The liability for special assessment bonds that carry a secondary pledge of a city's general credit, if reported in conformity with GAAP, should be reported in the balance sheet(s) of

Answer 1

Liabilities for special assessment bonds with a secondary pledge to a city's general credit are reported on the governmental funds balance sheet under GAAP, but if payable solely by property assessments, they may just be disclosed in the notes or a separate column.

Step-by-step explanation:

The liability for special assessment bonds that carry a secondary pledge of a city's general credit, in accordance with Generally Accepted Accounting Principles (GAAP), is typically reported on the governmental funds balance sheet if they are payable from general revenues. However, if the special assessment bonds are payable only from the assessments on the property owners who benefit from the improvements, the liability might not be reported on the governmental funds balance sheet but rather disclosed in the notes to the financial statements or reported in a separate column.