Assume a government is a special-purpose entity engaged in fiduciary activities only.Which of the following financial statements would be required?
A) Statement of Fiduciary Net Assets and Statement of Changes in Fiduciary Net Assets.
B) Statement of Net Assets and Statement of Activities.
C) Statement of Net Assets, Statement of Activities, Statement of Fiduciary Net Assets, Statement of Changes in Fiduciary Net Assets.
D) Statement of Fiduciary Net Assets, Statement of Changes in Fiduciary Net Assets, and Statement of Cash Flows.

Question

Quizplus · Accepted Answer

Since the government is engaged in fiduciary activities only, it would only be required to present financial statements that relate to fiduciary activities. Therefore, the Statement of Fiduciary Net Assets and Statement of Changes in Fiduciary Net Assets would be the most appropriate statements to present as they provide information about the financial position and changes in the financial position of fiduciary activities. The other statements listed include information about non-fiduciary activities, which would not be applicable in this scenario.

Assume a Government Is a Special-Purpose Entity Engaged in Fiduciary