Long-term debt of a governmental unit would be reported in the:
A) Government-wide financial statements and proprietary fund financial statements
B) Government-wide financial statements only
C) Debt service funds of governmental fund financial statements and government-wide financial statements
D) Notes to the financial statements only

Question

Quizplus · Accepted Answer

Long-term debt is a major liability of a governmental unit and as such, it must be reported in both the government-wide financial statements and the proprietary fund financial statements. The government-wide financial statements provide a broader overview of the financial position of the entire governmental unit, while the proprietary funds focus on the financial operations that are similar to those of a business enterprise. Long-term debt is a significant factor in both these financial statements as it affects the entity's financial position, results of operations, and cash flow.

Long-Term Debt of a Governmental Unit Would Be Reported in The