Which of the following is true regarding the proprietary fund financial statements?
A) The Statement of Net Assets (or Balance Sheet) reflects equity as contributed equity and retained earnings.
B) Normally, a reconciliation is required between the proprietary fund financial statements and the business-type activities column in the government-wide financial statements.
C) Statements include the Statement of Net Assets, Statement of Revenues, Expenses, and Changes in Fund Net Assets, and Statement of Cash Flows.
D) The Statement of Cash Flows may be prepared using either the direct or indirect methods.

Question

Quizplus · Accepted Answer

The proprietary fund financial statements include the Statement of Net Assets, Statement of Revenues, Expenses, and Changes in Fund Net Assets, and Statement of Cash Flows. Option A is incorrect as it is not necessary to reflect equity as contributed and retained earnings. Option B is incorrect as the statement does not require reconciliation with the government-wide financial statements. Option D is incorrect as the Statement of Cash Flows is prepared using the indirect method only.

Which of the Following Is True Regarding the Proprietary Fund