Question 1

Government-wide financial statements are prepared using the modified accrual basis of accounting.

Accepted Answer

Government-wide financial statements are prepared using the full accrual basis of accounting, not the modified accrual basis.

Question 2

Using the worksheet approach,general (governmental)long term assets and long term debt have a balance of zero until the worksheet entries are made.

Accepted Answer

This is true. A worksheet is a tool used to organize and adjust account balances before preparing financial statements. Therefore, the balance of general (governmental) long term assets and long term debt will be zero until the necessary worksheet entries are made.

Question 3

Government-wide statements are prepared using the accrual basis; therefore,enterprise fund-basis statements need to be adjusted from their original modified accrual basis.

Accepted Answer

Enterprise funds use accrual accounting so no adjustment is necessary.

Question 4

The difference between assets and liabilities in the government-wide statements is called fund balance.

Accepted Answer

The difference between assets and liabilities in the government-wide statements is called net position. Fund balance is used in the fund financial statements.

Question 5

When preparing the government-wide statements,worksheet entries are booked to provide the trial balance amounts used to prepare the financial statements.

Accepted Answer

Worksheet entries are not booked.

Question 6

The difference between assets and liabilities in the government-wide statements is called Net Position.

Accepted Answer

Net position is the difference between total assets and total liabilities in the government-wide financial statements.

Question 7

GASB Statement No.34 states that general capital assets should not be reported as assets in governmental funds but should be reported in the governmental activities column of the government-wide Statement of Net Position.

Accepted Answer

GASB Statement No.34 requires that general capital assets should not be reported as assets in governmental funds, but should instead be reported in the governmental activities column of the government-wide Statement of Net Position.

Question 8

Fiduciary activities never appear in the government-wide statements.

Accepted Answer

Fiduciary activities are reported in fiduciary funds and are not included in the government-wide financial statements because they are not resources available to support the government's own programs.

Question 9

When preparing the government-wide statements,an entry is required to record depreciation expense on general capital assets

Accepted Answer

Depreciation expense on general capital assets must be recorded in the government-wide statements as it reflects the consumption of the asset's economic benefits over time. This is recorded as an expense in the statement of activities and reduces the balance of the related capital assets in the statement of net position.

Question 10

GASB requires that general fixed assets acquired through General,special revenue or capital projects funds be included in the government-wide financial statements.

Accepted Answer

GASB requires that general fixed assets acquired through General, special revenue or capital projects funds be included in the government-wide financial statements.

Question 11

When preparing the government-wide statements,a worksheet entry is required to eliminate the current period expenditures for capital outlay and record those expenditures as capital assets

Accepted Answer

This is because capital outlay expenditures are not immediately expensed but rather capitalized and recorded as assets. Therefore, a worksheet entry is needed to eliminate the current period expenditures and record them as capital assets.

Question 12

Enterprise funds are reported in the business-type activities column of the government-wide statements.

Accepted Answer

Enterprise funds are proprietary funds that are used to provide goods and services to the public for a fee. As such, they are considered part of the business-type activities of a government and are reported in the government-wide statements in the business-type activities column.

Question 13

Capital assets acquired through proprietary funds are reported in both the Statement of Net Position of those funds and the government-wide Statement of Net Position.

Accepted Answer

Capital assets acquired through proprietary funds are reported in both the Statement of Net Position of those funds and the government-wide Statement of Net Position in order to provide a comprehensive view of the government's overall financial position.

Question 14

Government-wide statements are prepared using the modified accrual basis; therefore,governmental fund-basis statements need to be adjusted from their original accrual basis.

Accepted Answer

Government-wide statements use the economic resources focus and accrual accounting. Governmental funds use the current financial resources focus and modified accrual accounting.

Question 15

Balances from enterprise fund statements,Statement of Net Position and Statement of Revenues,Expenses,and Changes in Fund Net Position,are reported in the business-type activities sections of government-wide statements.

Accepted Answer

Balances from enterprise fund statements and related financial statements are reported in the business-type activities sections of government-wide statements.

Question 16

When preparing the government-wide statements,worksheet entries are made to add the balances of the fiduciary funds

Accepted Answer

When preparing the government-wide statements, fiduciary funds are not included as they are not considered part of the government's operations.

Question 17

GASB requires a reconciliation from proprietary fund financial statements to the government-wide statements business-activities columns from modified accrual accounting to accrual accounting.

Accepted Answer

Proprietary funds use accrual accounting.

Question 18

In addition to the fund basis statement,GASB Statement 34 requires government-wide statements that are prepared using the accrual basis and the current financial resources measurement focus.

Accepted Answer

GASB Statement 34 requires government-wide financial statements to be prepared using the accrual basis of accounting and the economic resources measurement focus, not the current financial resources measurement focus.

Question 19

GASB requires a reconciliation from governmental fund financial statements to the government-wide statements governmental-activities columns from modified accrual accounting to accrual accounting.

Accepted Answer

This is a true statement. GASB (Governmental Accounting Standards Board) requires a reconciliation from governmental fund financial statements, which use modified accrual accounting, to the government-wide statements governmental-activities columns, which use accrual accounting. This is done to provide a more comprehensive view of the government's financial position and activities.

Question 20

The government-wide statements do not include a government-wide Statement of Cash Flows.

Accepted Answer

The government-wide statements typically include a Statement of Net Position, Statement of Activities, and Notes to the Financial Statements, but they do not include a Statement of Cash Flows. However, individual funds may have their own Statements of Cash Flows.

Quiz 8: Government-Wide Statements: Capital Assets; Long-Term Debt