Question 1

Government activities which meet the tests and are determined to be component units of state and local governmental units must be discretely presented in the financial statements.

Accepted Answer

False

Question 2

In addition to the government-wide statements,governments are required to prepare fund financial statements for proprietary funds only.

Accepted Answer

Governments are required to prepare fund financial statements for governmental, proprietary, and fiduciary funds, not just proprietary funds.

Question 3

The total fund balances reported in the total column of the fund basis statements must be reconciled to the total net assets presented in the governmental activities column of the government-wide Statement of Net Assets.

Accepted Answer

This is true as per the requirements of Generally Accepted Accounting Principles (GAAP) for state and local governments. The government-wide statement presents information on all of the government's activities, including governmental activities and business-type activities. The fund basis statements provide more detailed information on individual funds. Reconciliation is required to ensure consistency in reporting and to eliminate any discrepancies between the two statements.

Question 4

With respect to fund basis financial statements,a government may designate any fund to be a major fund if reporting that fund separately would be useful.

Accepted Answer

This statement is true. A government may designate any fund as a major fund if reporting that fund separately would be useful. The major fund concept is an accounting requirement for governmental financial statements, and it allows users of financial statements to easily identify the most important funds and their financial activity.

Question 5

Blending of financial information is done only when component units and the primary government are so intertwined that they are essentially the same.

Accepted Answer

Blending of financial information is done when component units are so intertwined with the primary government that they are essentially the same entity, and therefore their financial information is reported as if it is from a single entity.

Question 6

In addition to the government-wide statements,governments are required to prepare fund financial statements for governmental,proprietary and fiduciary funds.

Accepted Answer

This is true. Governments are required to produce financial statements for each type of fund they use to manage their finances, including governmental, proprietary, and fiduciary funds. These fund financial statements provide more detailed information about specific areas of government activity and are an important tool for evaluating financial performance and accountability.

Question 7

The government-wide financial statements are prepared using the economic resources measurement focus and accrual basis of accounting.

Accepted Answer

The financial statements of the entire government are prepared using the economic resources measurement focus and accrual accounting. This approach is designed to provide a more complete picture of the government's financial condition by accounting for all assets and liabilities, regardless of whether they have been paid or received.

Question 8

Governmental fund financial statements include columns for the General Fund and all other "major" governmental funds.

Accepted Answer

This is true. Governmental fund financial statements must include a column for the General Fund and all other "major" governmental funds.

Question 9

When preparing fund basis financial statements,any funds not reported separately are reported individually by function.

Accepted Answer

Any funds not reported separately are aggregated and reported in a single column under the label nonmajor funds. A schedule showing the detail of nonmajor funds is provided in the other supplementary information section.

Question 10

According to GASB,a primary government can only be a state or a general-purpose local government,such as a city or county.

Accepted Answer

The answer of According to GASB,a primary government can only...

Question 11

The General Fund is always considered to be a major fund when preparing fund basis financial statements.

Accepted Answer

The General Fund is the primary operating fund of a governmental entity and is typically considered a major fund for financial reporting purposes.

Question 12

A Comprehensive Annual Financial Report (CAFR)would include an introductory section,management's discussion and analysis,basic financial statements,required supplementary information other than MD&A,combining and individual fund statements,narrative explanations,and statistical section.

Accepted Answer

The CAFR has three major sections; introductory which includes MD&A, financial which includes basic financial statements, RSI other than MD&A, combining and individual fund statements and narrative explanations, and the statistical section.

Question 13

The basic financial statements of a state or local governmental unit include the MD&A,government-wide statements,fund statements,and the notes.

Accepted Answer

The basic financial statements consist of the government-wide, the governmental fund, the proprietary fund, and the fiduciary fund financial statements and the notes to the financial statements).

Question 14

The government-wide financial statements present the government as a whole,excluding component units and including fiduciary activities.

Accepted Answer

The government-wide financial statements include component units but exclude fiduciary activities, as fiduciary activities are not considered part of the government's resources.

Question 15

With respect to fund basis financial statements,governmental funds are considered to be a major fund when total assets,liabilities,revenues and expenditures combined are at least 10% of the total for the governmental funds category.

Accepted Answer

Governmental funds, other than the general fund, are considered to be a major fund when both of the following conditions are met: 1) Total assets, liabilities, revenues or expenditures of that individual government fund constitute 10% of the total for the governmental funds category and 2) Total assets, liabilities, revenues or expenditures of that individual government fund are 5% of the total of the governmental and enterprise categories, combined.

Question 16

Governmental fund statements are prepared using the current financial resources measurement focus and modified accrual basis of accounting.

Accepted Answer

Governmental fund statements are indeed prepared using the current financial resources measurement focus and modified accrual basis of accounting. This means that revenues are recognized when they are measurable and available to finance current expenditures, and expenditures are recognized when they result in a decrease in current financial resources. This differs from the full accrual basis of accounting used in the financial statements of business entities, which recognizes revenues when they are earned and expenses when they are incurred regardless of when the cash is received or paid.

Question 17

The statistical section of the CAFR contains the combining schedules of non-major funds.

Accepted Answer

The purpose of the statistical section of the CAFR is to provide historical information and additional detail to help the financial statement user better understand and assess a government's economic condition

Question 18

When preparing fund basis financial statements,any funds not reported separately are aggregated and reported in a single column under the label non-major funds.

Accepted Answer

This statement is true. Non-major funds are reported as a single column in fund basis financial statements when they are not reported separately.

Question 19

Governmental fund statements are prepared using the current financial resources measurement focus and modified accrual basis of accounting.

Accepted Answer

Governmental fund statements are indeed prepared using the current financial resources measurement focus and modified accrual basis of accounting.

Question 20

Governmental fund financial statements include the Balance Sheet and the Statement of Revenues,Expenditures,and Changes in Fund Balances.

Accepted Answer

Governmental fund financial statements do indeed include the Balance Sheet and the Statement of Revenues, Expenditures, and Changes in Fund Balances.

Quiz 2: Overview of Financial Reporting for State and Local Governments

Government activities which meet the tests and are determined to be component units of state and local governmental units must be discretely presented in the financial statements.

In addition to the government-wide statements,governments are required to prepare fund financial statements for proprietary funds only.

The total fund balances reported in the total column of the fund basis statements must be reconciled to the total net assets presented in the governmental activities column of the government-wide Statement of Net Assets.

With respect to fund basis financial statements,a government may designate any fund to be a major fund if reporting that fund separately would be useful.

Blending of financial information is done only when component units and the primary government are so intertwined that they are essentially the same.

In addition to the government-wide statements,governments are required to prepare fund financial statements for governmental,proprietary and fiduciary funds.

The government-wide financial statements are prepared using the economic resources measurement focus and accrual basis of accounting.

Governmental fund financial statements include columns for the General Fund and all other "major" governmental funds.

When preparing fund basis financial statements,any funds not reported separately are reported individually by function.

According to GASB,a primary government can only be a state or a general-purpose local government,such as a city or county.

The General Fund is always considered to be a major fund when preparing fund basis financial statements.

A Comprehensive Annual Financial Report (CAFR)would include an introductory section,management's discussion and analysis,basic financial statements,required supplementary information other than MD&A,combining and individual fund statements,narrative explanations,and statistical section.

The basic financial statements of a state or local governmental unit include the MD&A,government-wide statements,fund statements,and the notes.

The government-wide financial statements present the government as a whole,excluding component units and including fiduciary activities.

With respect to fund basis financial statements,governmental funds are considered to be a major fund when total assets,liabilities,revenues and expenditures combined are at least 10% of the total for the governmental funds category.

Governmental fund statements are prepared using the current financial resources measurement focus and modified accrual basis of accounting.

The statistical section of the CAFR contains the combining schedules of non-major funds.

When preparing fund basis financial statements,any funds not reported separately are aggregated and reported in a single column under the label non-major funds.

Governmental fund statements are prepared using the current financial resources measurement focus and modified accrual basis of accounting.

Governmental fund financial statements include the Balance Sheet and the Statement of Revenues,Expenditures,and Changes in Fund Balances.