Deck 3: Government Financial Reporting

Question 1

In addition to government-wide statements, GASB Statement No.34 requires fund financial statements be included in the government's basic set of financial statements.The basic fund financial statements that should be included for proprietary funds are

A)the Balance Sheet and the Statement of Revenues, Expenditures, and Changes in Fund Balance.
B)the Statement of Nets Assets, the Statement of Revenues, Expenses, and Changes in Fund Net Assets, and
The Statement of Cash Flows.
C)the Statement of Fiduciary Net Assets, and the Statement of Changes in Fiduciary Net Assets.
D)the Balance Sheet, the Income Statement,
The Statement of Cash Flows, and
The Statement of Retained Earnings.

Answer 1

B

Question 2

The aim of the government-wide statement of activities is to show

A)the net cost of each of the government's main functions and programs.
B)the net income for the government as a whole.
C)the net income for the government's governmental activities and fiduciary activities.
D)the net income for the government's governmental activities and proprietary activities.

Answer 2

A

Question 3

In addition to preparing fund financial statements, governments should also prepare consolidated financial statements to provide information on the financial position and operating results of the government as a single economic entity.

Answer 3

True

Question 4

Government-wide financial statements should include

A)the statement of net assets, and the statement of activities.
B)the statement of net assets only.
C)the statement of activities only.
D)the statement of net assets, the statement of activities, and the statement of cash flows.

Question 5

__________ is the responsibility of governments to justify that their actions in the current period have complied with public decisions concerning the raising and spending of public moneys in the short term.

A)Fund accountability.
B)Fiscal accountability.
C)Operational accountability.
D)Government accountability.

Question 6

Fund balance is equal to fund assets plus fund liabilities.

Question 7

To prepare their government-wide statements, governments must adjust the governmental fund statements from the full accrual basis to the modified accrual basis.

Question 8

The government-wide statements should be prepared using

A)the cash basis.
B)the full accrual basis.
C)the modified accrual basis.
D)the modified accrual basis for the governmental activities, and the full accrual basis for the business-type activities.

Question 9

Which of the following is NOT considered Required Supplementary Information (RSI)?

A)Notes to the financial statements.
B)Management's Discussion and Analysis.
C)Budgetary comparisons.
D)Pension schedules.

Question 10

A reservation of fund balance is, in essence, an additional restriction on fund resources.

Question 11

Internal service fund balances generally are included in the governmental activities column of the government-wide statement of net assets, rather than in the business-type activities column.

Question 12

In the fund financial statements, the statements for the governmental funds should be prepared using

A)the cash basis.
B)the full accrual basis.
C)the modified accrual basis.
D)the modified cash basis.

Question 13

A governmental funds balance sheet does not include capital or other noncurrent assets.

Question 14

In addition to government-wide statements, GASB Statement No.34 requires fund financial statements be included in the government's basic set of financial statements.The basic fund financial statements that should be included for governmental funds are

A)the Balance Sheet and the Statement of Revenues, Expenditures, and Changes in Fund Balance.
B)the Statement of Nets Assets, the Statement of Revenues, Expenses, and Changes in Fund Net Assets, and
The Statement of Cash Flows.
C)the Statement of Fiduciary Net Assets, and the Statement of Changes in Fiduciary Net Assets.
D)the Balance Sheet, the Income Statement,
The Statement of Cash Flows, and
The Statement of Retained Earnings.

Question 15

The format that may now be used for the government-wide statement of net assets is "assets plus liabilities equals net assets."

Question 16

Footnotes are not required to be included as part of the basic financial statements of governments.

Question 17

The government-wide statement of activities bears little resemblance to the income statement of a business.

Question 18

In addition to government-wide statements, GASB Statement No.34 requires fund financial statements be included in the government's basic set of financial statements.The basic fund financial statements that should be included for fiduciary funds are

A)the Balance Sheet and the Statement of Revenues, Expenditures, and Changes in Fund Balance.
B)the Statement of Nets Assets, the Statement of Revenues, Expenses, and Changes in Fund Net Assets, and
The Statement of Cash Flows.
C)the Statement of Fiduciary Net Assets, and the Statement of Changes in Fiduciary Net Assets.
D)the Balance Sheet, the Income Statement,
The Statement of Cash Flows, and
The Statement of Retained Earnings.

Question 19

Fiduciary activities should be reported in fund statements, but should be excluded from the government-wide statements.

Question 20

__________ is governments' responsibility to report the extent to which they have met their operating objectives efficiently and effectively, using all resources available for that purpose, and whether they can continue to meet their objectives for the foreseeable future.

A)Fund accountability.
B)Fiscal accountability.
C)Operational accountability.
D)Government accountability.

Question 21

Which of the following would NOT be found in the business-type activity column of the government-wide Statement of Net Assets of the City of Smithville?

A)Cash.
B)Inventory.
C)Capital assets.
D)Receivable from general fund.

Question 22

Which of the following would NOT be found in the Statement of Net Assets of Teton City?

A)Cash.
B)Capital assets.
C)Receivable from special revenue fund.
D)Inventories.

Question 23

In the fund financial statements, the statements for the proprietary funds should be prepared using

A)the cash basis.
B)the full accrual basis.
C)the modified accrual basis.
D)the modified cash basis.

Question 24

Under the new GASB reporting model for governmental entities, the entity-wide balance sheet will display which of the following?

A)Assets, Liabilities, and Net Assets.
B)Assets, Liabilities, and Fund Balances.
C)Assets, Liabilities, and Fund Equity.
D)Assets, Liabilities, and Owner's Equity.

Question 25

How many government-wide statements is a municipality required to prepare?

A)One.
B)Two.
C)Eight.
D)Ten.

Question 26

In the fund financial statements, the statements for the fiduciary funds should be prepared using

A)the cash basis.
B)the full accrual basis.
C)the modified accrual basis.
D)the modified cash basis.

Question 27

The Basic Financial Statements of a city do not include which of the following?

A)Government-wide Statement of Net Assets.
B)Government-wide Statement of Activities.
C)Government-wide Statement of Cash Flows.
D)Balance Sheet for each governmental and proprietary fund.

Question 28

Under the new GASB reporting model for governmental entities, which of the following is required?

A)Only one set of financial statements, prepared on the full accrual basis of accounting.
B)Only one set of financial statements, prepared on the modified accrual basis of accounting.
C)Two sets of financial statements, one similar to the pre-GASB #34 reporting requirements using the current financial resources measurement focus and modified accrual basis of accounting and one that combines all governmental activities in one column and all business-type activities in another column using the full accrual basis of accounting for both columns.
D)Two sets of financial statements, one exactly like the pre-GASB #34 reporting requirements using the current financial resources measurement focus and modified accrual basis of accounting and one that combines all governmental activities in one column and all business-type activities in another column using the full accrual basis of accounting for both columns.

Question 29

The focus of the Statement of Activities of the city of West Hills is on which of the following?

A)Determining the total expenses by natural classification.
B)Determining the total expenses by function.
C)Determining the total revenues by function.
D)Determining the net cost of functions.

Question 30

Per Statement No.34, the GASB requires that governments present their budget versus actual comparisons on a __________ and include a schedule that reconciles the actual amounts per the budgetary comparison with the GAAP amounts per the financial statements.

A)full accrual basis
B)modified accrual basis
C)cash basis
D)budgetary basis