Question 1

Internal service funds typically are not included in the governmental activities column on the government-wide statements.

Accepted Answer

Internal service funds are proprietary funds and are most commonly included in the government-wide statements.

Question 2

The Comprehensive Annual Financial Report CAFR contains four major sections: introductory, financial, supplementary, and statistical.

Accepted Answer

The CAFR has three major sections: introductory, financial and statistical.

Question 3

Prior-year data are required to be presented on government-wide statements

Accepted Answer

Prior year data may be presented, but it is not required.

Question 4

Which of the following is true regarding the fiduciary fund financial statements?

Accepted Answer

Fiduciary fund statements use accrual accounting and the economic resources measurement focus. Fiduciary funds prepare the Statement of Net Position and the Statement of Changes in Fiduciary Net Position.

Question 5

Which of the following is true regarding the proprietary fund financial statements?

Accepted Answer

Proprietary funds include the Statement of Net Position, Statement of Revenues, Expenses, and Changes in Fund Net Position, and Statement of Cash Flows.

Question 6

Prior year balances are required to be presented in government-wide statements.

Accepted Answer

Prior year data, typically 10 years, is presented with the statistical section of the CAFR and is optional.

Question 7

GASB requires governments to prepare cash flows from operating activities using the indirect method for a proprietary fund.

Accepted Answer

Proprietary funds are the only funds that report a Statement of Cash Flows. GASB requires governments to prepare cash flows from operating activities using the direct method.

Question 8

Governments who prepare government-wide statements are not required to prepare separate fund-level financial statements within the three categories of funds: governmental, proprietary, and fiduciary.

Accepted Answer

In addition to the government-wide statement, governments are required to prepare fund-level financial statements within the three categories of funds; governmental, proprietary and fiduciary.

Question 9

Because proprietary funds use a different basis of accounting than the government-wide statements, there must be a reconciliation between the two sets of statements.

Accepted Answer

Proprietary fund statements and government-wide statements both use accrual accounting.

Question 10

Proprietary funds are required to prepare a Statement of Cash Flows from operating activities using the direct method.

Accepted Answer

Proprietary funds are the only funds that report a Statement of Cash Flows. GASB requires governments to prepare cash flows from operating activities using the direct method.

Question 11

A government may not selectively designate any fund to be a major fund even if reporting the fund separately would be useful.

Accepted Answer

The general fund is always a major fund and a fund is considered to be a major fund if certain criteria are met. In addition, governments may designate any other fund to be a major fund if reporting that fund separately would be useful

Question 12

The fund balance reported in the Governmental Funds Balance Sheet must equal the total Net Position in the governmental activities column of the government-wide Statements of Net Position.

Accepted Answer

The fund balance reported in the Governmental Funds Balance Sheet must be reconciled to the net position of governmental activities in the Statement of Net Position. These amounts differ because the two statements have different bases of accounting and because most internal service funds are included in the governmental activities column on the government-wide statements.

Question 13

A Comprehensive Annual Financial Report for a state or local governmental unit should contain an introductory section, a financial section, and a statistical section

Accepted Answer

The CAFR has three major sections: introductory, financial and statistical.

Question 14

The Governmental Accounting Standards Board considers the financial reporting entity to include the primary government, but not its component units.

Accepted Answer

GASB Codification Sec. 21 establishes that the financial reporting entity is the primary government together with its component units. GASB standards provide two methods for including component unit financial information with that of the primary government; blending and discrete presentation

Question 15

Fiduciary funds are not included in the government-wide statements.

Accepted Answer

Fiduciary funds are not included in the government-wide statements

Question 16

Fund balance is an account title used only in governmental funds to indicate the excess of assets over liabilities.

Accepted Answer

The excess of assets and deferred outflows over liabilities and deferred inflows is labeled fund balance, an account title used only in governmental funds.

Question 17

Prior-year data may be presented but are not required on government-wide statements

Accepted Answer

Prior year data may be presented, but it is not required.

Question 18

Which of the following is not considered Required supplementary Information RSI?

Accepted Answer

RSI includes MD&A, information about infrastructure, budgetary comparison schedule, funding schedules, schedules required for external financing pools, pension schedules and schedules of risk management activities. Notes to the financial statements are required and not part of RSI.

Question 19

Permanent funds are not presented as part of the government-wide statements.

Accepted Answer

All governmental type funds, including permanent fund, are included in the government-wide statements

Question 20

When performing an audit of the CAFR, auditors review the material to establish that it is not misleading in relation to the basic statements but do not include the MD&A in the scope of the audit.

Accepted Answer

The MD&A is not audited.

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

Internal service funds typically are not included in the governmental activities column on the government-wide statements.

The Comprehensive Annual Financial Report CAFR contains four major sections: introductory, financial, supplementary, and statistical.

Prior-year data are required to be presented on government-wide statements

Which of the following is true regarding the fiduciary fund financial statements?

Which of the following is true regarding the proprietary fund financial statements?

Prior year balances are required to be presented in government-wide statements.

GASB requires governments to prepare cash flows from operating activities using the indirect method for a proprietary fund.

Governments who prepare government-wide statements are not required to prepare separate fund-level financial statements within the three categories of funds: governmental, proprietary, and fiduciary.

Because proprietary funds use a different basis of accounting than the government-wide statements, there must be a reconciliation between the two sets of statements.

Proprietary funds are required to prepare a Statement of Cash Flows from operating activities using the direct method.

A government may not selectively designate any fund to be a major fund even if reporting the fund separately would be useful.

The fund balance reported in the Governmental Funds Balance Sheet must equal the total Net Position in the governmental activities column of the government-wide Statements of Net Position.

A Comprehensive Annual Financial Report for a state or local governmental unit should contain an introductory section, a financial section, and a statistical section

The Governmental Accounting Standards Board considers the financial reporting entity to include the primary government, but not its component units.

Fiduciary funds are not included in the government-wide statements.

Fund balance is an account title used only in governmental funds to indicate the excess of assets over liabilities.

Prior-year data may be presented but are not required on government-wide statements

Which of the following is not considered Required supplementary Information RSI?

Permanent funds are not presented as part of the government-wide statements.

When performing an audit of the CAFR, auditors review the material to establish that it is not misleading in relation to the basic statements but do not include the MD&A in the scope of the audit.