Which of the following is a valid argument for separate accounting principles for proprietary activities?
A) Two separate measurement focuses and bases for accounting within the same set of financial statements are confusing.
B) There are no clear-cut distinctions between business and non-business activities.
C) The measurement focus on all economic resources is more consistent with the GASB's objectives that financial reporting should provide information to help determine whether current-year revenues were sufficient to pay for current-year services.
D) Surveys of statement users indicate that information on depreciation is not of high priority to government decision makers.

Question

Quizplus · Accepted Answer

The GASB (Governmental Accounting Standards Board) objectives emphasize that financial reporting should provide information to assess whether current-year revenues are sufficient to cover current-year services. This objective supports the argument for separate accounting principles for proprietary activities, as these activities often require a different measurement focus, specifically on all economic resources, to accurately reflect their financial position and the results of their operations.

Which of the Following Is a Valid Argument for Separate