Which of the following is not true for capital projects funds?

a. Capital projects funds use the modified accrual basis of accounting.

b. Encumbrance accounting is generally used.

c. Capital projects funds use a Construction Work in Progress account to record costs until the project is completed.

d. Capital projects funds have a project-life focus.

c. Capital projects funds use a Construction Work in Progress account to record costs until the project is completed.

Explanation:

There is no balance in Construction work in process account as the US GAAP requires to capitalize all the work in process and transfer to capital project fund. As that reflects the work done and is capital in nature.

These projects are generally construction projects and therefore, capital in nature, as building is capital asset, work in process is also capitalized.

Thus, statement c which states that construction work in process is used until the project is completed is incorrect.