The total fund balances presented in Governmental Funds Statements are different from the total net assets on the government-wide Statement of Net assets.Which of the following is not a reason for this difference?
A) The two statements have different bases of accounting
B) Capital assets used in government operations are not financial resources and therefore are not reported in the funds
C) Some liabilities are not due and payable in the current period and are not reported in fund liabilities
D) Receivables in the fund statements are reported on the statement of net assets as deferred revenue

Question

Quizplus · Accepted Answer

Option D is incorrect as receivables in the fund statements are not reported as deferred revenue on the statement of net assets. Instead, they are reported as assets on the statement of net assets. The difference between the total fund balances in the governmental funds statements and the total net assets in the government-wide statement of net assets arises due to differences in accounting policies and principles used in the two statements. Option A is correct as the governmental funds statements use the modified accrual basis of accounting while the government-wide statement of net assets uses the full accrual basis of accounting. Option B is correct as capital assets used in government operations are reported in the government-wide statement of net assets but not in the governmental funds statements. Option C is correct as some liabilities are reported in the government-wide statement of net assets but not in the governmental funds statements because they are not due and payable in the current period.

The Total Fund Balances Presented in Governmental Funds Statements Are