Which financial statements are required for a proprietary fund?

Question

Quizplus · Accepted Answer

Proprietary funds use the same set of financial statements used by businesses. Therefore, the required financial statements are the Statement of Revenues, Expenses and Changes in Fund Balance, Statement of Net Assets, and Statement of Cash Flows. Option A is incorrect because it omits the Statement of Revenues, Expenses and Changes in Fund Balance. Option C only includes a balance sheet and income statement, which are not enough to provide a complete picture of the fund's financial state. Option D leaves out the statement of cash flows, which is necessary to show how the fund generated and used its cash during the accounting period.

Which Financial Statements Are Required for a Proprietary Fund