When converting the multiple governmental funds to the single entity represented by the governmental activities in the government-wide financial statements, which of the following adjustments will not be necessary?

Question

Quizplus · Accepted Answer

When converting the multiple governmental funds to the single entity represented by the governmental activities in the government-wide financial statements, converting the cash account to reflect a different basis of accounting is not necessary. This is because cash is an asset that is reported the same way under both the governmental funds' modified accrual basis of accounting and the government-wide financial statements' full accrual basis of accounting. Adjustments for capital assets, long-term liabilities, and converting fund balance to net position are necessary to reflect the full economic resources measurement focus and accrual basis of accounting used in government-wide financial statements.

When Converting the Multiple Governmental Funds to the Single Entity