ch.2 – Flashcards
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Which of the following statements is true regarding the definition of a fund?
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A fund is a fiscal entity which is designed to provide reporting that demonstrates conformance with finance-related legal and contractual provisions separately from GAAP reporting.
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Which of the following statements is true regarding the basic financial statements of a state or local government?
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-Separate columns should be provided in the government-wide financial statements for governmental activities and business-type activities.
-Governmental fund and proprietary fund financial statements should provide a separate column for each major fund.
-Aggregate information about all nonmajor governmental funds or nonmajor enterprise funds should be reported in a single column of the governmental fund or proprietary fund financial statements.
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Which of the following sets of elements are common for both governmental financial statements and for-profit financial statements?
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Assets and liabilities.
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The measurement focus and basis of accounting that should be used for the governmental fund financial statements are:
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Measurement Focus :Current financial resources
Basis of Accounting :modified accrual
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Which of the following amounts that are identified at the end of the fiscal year would be classified as a restricted fund balance?
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A federal grant that is to be used for playground equipment.
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Separate reporting for major funds is needed because
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Users of governmental financial statements need to be able to examine funds that represent large dollar amounts of a government's resources and activities.
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Assets and liabilities of activities for which the government is acting in either an agency or trustee capacity for individuals, organizations, or other governments should be reported in:
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The fiduciary fund financial statements.
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Under the modified accrual basis of accounting:
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Revenues are recognized when current financial resources become measurable and available to pay current-period obligations.
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Financial information about an internal service fund should be reported in the proprietary fund financial statements and the:
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Either governmental activities or business-type activities column of the government-wide financial statements, depending on whether the internal service fund predominantly serves governmental activities or business-type activities.
