Government-wide statements use the:
A) current financial resources measurement focus and accrual basis of accounting.
B) economic resources measurement focus and accrual basis of accounting.
C) economic resources measurement focus and modified accrual basis of accounting.
D) none of the above, the fiduciary funds have no revenues.

Question

Quizplus · Accepted Answer

Government-wide statements must use the economic resources measurement focus, which is based on the assumption that resources represent potential future economic benefits. They also use the accrual basis of accounting, which records revenues when earned and expenses when incurred, regardless of when the cash is received or paid. This combination provides a more complete picture of the government's financial position and performance, including long-term assets and obligations. Option A is incorrect because it refers to the current financial resources measurement focus, which is used in fund accounting and focuses on the availability of spendable resources. Option C is incorrect because it refers to the modified accrual basis, which is used in fund accounting and records revenues when they become measurable and available, and expenses when they are incurred. Option D is incorrect because fiduciary funds are not included in the government-wide statements, as they only hold resources in trust for others and do not use their resources to provide goods or services.

Government-Wide Statements Use The