Ch2 - Overview of Financial Reporting for State and Local Governments
The statistical section typically presents ____ years of information in each table or schedule. A) 3 B) 5 C) 10 D) 12
C)
A reconciliation from Enterprise funds statements to government-wide statements is not necessary because ... A) They both use the same measurement focus and basis of accounting (economic resources, accrual) B) They both use the same measurement focus and basis of accounting (current financial resources, modified accrual) C) They use a different measurement focus and basis of accounting. D) They use a different measurement focus and basis of accounting.
A)
In addition to a Statement of Net Assets, what statements are required in the government-wide Financial Statements? A) Statement of Activities. B) Statement of Cash Flows. C)Both of the above. D)Neither of the above.
A)
Under GASB rules for the financial reporting entity: A)component units are included if the primary government is financially accountable for their operations. B)counties are component units of the State Government. C)blended and discretely presented component units are to be reported in government-wide financial statements but not in fund financial statements. D)component units must be reported in columns (discrete presentation) separate from the funds of a primary government.
A)
What are the three major sections of the Comprehensive Annual Financial Report? A) Introductory Section, Financial Section, Statistical Section B) Introductory Section, Financial Section, Management Discussion and Analysis. C) Introductory Section, Financial Section, Budgetary Comparison D) Introductory Section, Financial Section, Reporting Infrastructure
A)
Which of the following is not true regarding the Statement of Cash Flows for proprietary funds? A) At the bottom of the statement, net income is reconciled to cash flows from operations. B) Interest and dividends received are recorded as investing activities. C) The direct method is required for reporting cash flows from operations. D) Four categories of cash flows are used.
A)
Which of the following is true about the combining financial statements? A) They are used whenever a non-major column is used in one of the fund financial statements B) The total column in the combining statements is not always the same as the non-major funds column in the basic financial statements C) Both of the above D) Neither of the above
A)
Which of the following is true regarding Government-wide financial statements? A) A Statement of Cash Flows is not required for Government-wide statements. B) Prior year data must be presented C) Depreciation can be reported in the statements or disclosed in footnotes. D) Fiduciary activities are only reported if they qualify as a major fund.
A)
Which of the following is true regarding fiduciary fund statements? A)Fiduciary fund statements include the Statement of Fiduciary Net Assets and the Statement of Changes in Fiduciary Net Assets. B)Fiduciary fund statements are prepared using the current financial resources measurement focus and modified accrual basis of accounting. C)Both of the above. D)Neither of the above.
A)
Which of the following is true regarding fiduciary funds? A)Fiduciary funds are reported in the fiduciary fund financial statements but not in the government-wide financial statements. B)Agency funds would be reported in both the Statement of Fiduciary Net Assets and the Statement of Changes in Fiduciary Net Assets. C)Both of the above. D)Neither of the above.
A)
Which of the following is true regarding financial reporting of governmental funds? A)Governmental funds include the General Fund, special revenue funds, capital projects funds, debt service funds, and permanent funds. B)The Fund Balance of governmental funds reports fund balance as reserved and unreserved. C)Both of the above. D)Neither of the above.
A)
Which of the following is true regarding the Comprehensive Annual Financial Report? A)The basic financial statements consist of the government-wide, the governmental fund, the proprietary fund, and the fiduciary fund financial statements (and the notes to the financial statements). B)The government-wide financial statements include the Statement of Net Assets, the Statement of Activities, and the Statement of Cash Flows. C)Both of the above. D)Neither of the above.
A)
Which of the following is true regarding the fiduciary fund financial statements? A)Fiduciary fund financial statements include the Statement of Fiduciary Net Assets and Statement of Changes in Fiduciary Net Assets. B)Fiduciary fund financial statements are prepared using the current financial resources measurement focus and modified accrual basis of accounting. C)Fiduciary fund financial statements reflect equity as reserved and unreserved. D)Agency funds are reported only on the Statement of Changes in Fiduciary Net Assets.
A)
Which of the following is true regarding the financial reporting entity of a state or local government? A)Many component units are discretely presented, rather than blended. B)A school district could never be a primary government. C)Only a primary government is reported in the government-wide statements. D)All of the above are true.
A)
Which of the following is true regarding the government-wide Statement of Activities? A)The Statement of Activities includes depreciation expense. B)Transfers between governmental and business type activities are eliminated and do not appear on the government-wide Statement of Activities. C)In the government-wide Statement of Activities, "special items" are those items that are both unusual and infrequent and are not under the control of management. D)Taxes levied for specific functions may be reported as program revenue.
A)
Which of the following is true regarding the government-wide Statement of Net Assets? A)Discretely presented component units are included in a separate column (or columns). B)Net assets are broken down into three categories: invested in capital assets, reserved, and unreserved. C)Both of the above. D)Neither of the above.
A)
Which of the following is true regarding the government-wide Statement of Net Assets? A)The government-wide Statement of Net Assets reflects capital assets, net of accumulated depreciation, for both governmental and business-type activities. B)The government-wide Statement of Net Assets must be prepared in a classified format; that is, both assets and liabilities must be separated between current and long-term categories. C)The government-wide Statement of Net Assets includes all resources entrusted to the government; including governmental, proprietary, and fiduciary. D)A reporting entity (primary government plus component units) total column is required.
A)
Which of the following is true regarding the government-wide financial statements? A)The government-wide financial statements include the Statement of Net Assets and the Statement of Activities. B)The government-wide financial statements are prepared using the current financial resources measurement focus and the modified accrual basis of accounting. C)Both of the above. D)Neither of the above.
A)
Which of the following is true regarding the government-wide statements? A)The government-wide statements include a Statement of Net Assets and a Statement of Activities. B)The governmental activities portion of the government-wide statements is prepared using the current financial resources measurement focus and modified accrual basis of accounting. C)Both of the above. D)Neither of the above.
A)
Which of the following is true regarding the proprietary fund financial statements? A)The proprietary fund financial statements include the Statement of Net Assets, the Statement of Revenues, Expenses, and Changes in Fund Net Assets, and the Statement of Cash Flows. B)The proprietary funds include enterprise, internal service, and permanent funds. C)Both of the above. D)Neither of the above
A)
GASB provides which method(s) for including component unit financial information with that of the primary government? A) Discrete Presentation B) Blending C) A and B D) None of the above
C)
Which of the following is not one of the major sections of the Comprehensive Annual Financial Report (CAFR)? A. Budgetary B. Financial C. Introductory D. Statistical
A.
An example of an expenditure classification by function would be: A)Current. B)Public safety. C)Police Department. D)Salaries.
B)
The modified approach for infrastructure requires schedules and disclosures to be included in which part of the CAFR? A) Notes to the Financial Statements B) Required Supplementary Information C) Other Supplementary Information D) Proprietary Fund Statements
B)
Which Statement is presented using the Accrual Basis of Accounting? A) Governmental Fund Balance Sheet B) Government-Wide Statement of Activities C) Statement of Revenues, Expenditure and changes in Fund Balances D) A and C
B)
Which of the following is true regarding component units? A)Component units could include towns, school districts, counties, and municipalities. B)Component units may be reported discretely in the government-wide statements or may be blended as a fund in the fund financial statements (and thus also included in the government-wide financial statements). C)Both of the above. D)Neither of the above.
B)
Which of the following is true regarding the proprietary funds statements? A)Major enterprise and internal service funds are reported in separate columns; a column is presented for all non-major enterprise and internal service funds (combined), and a total column is presented. B)Financial statements include a Statement of Net Assets (or balance sheet), Statement of Revenues, Expenses, and Changes in Fund Net Assets, and Statement of Cash Flows. C)Both of the above. D)Neither of the above.
B)
Which of the following sections of the CAFR is audited? A) Introductory section B) Financial section C) Statistical section D) Management Discussion and Analysis section
B)
Which part of the financial section of the CAFR is considered "Required Supplementary Information?" A) Auditor's Report B) Management's Discussion and Analysis C) Government-Wide Financial Statements D) Fund Financial Statements
B)
Which of the following is true regarding the composition of the Comprehensive Annual Financial Report (CAFR)? A)The CAFR is required in order to be in conformity with Generally Accepted Accounting Principles (GAAP). B)The CAFR is to include both blended and discretely presented component units. C)The CAFR contains four major sections: introductory, financial, supplementary, and statistical. D)All of the above are true.
B)T
Governmental fund statements are prepared using: A. Economic resources measurement focus and modified accrual basis of accounting. B. Current financial resources measurement focus and modified accrual basis of accounting. C. Economic resources measurement focus and accrual basis of accounting. D. Current financial resources measurement focus and accrual basis of accounting.
B.
Which of the following funds require a Statement of Cash Flows? A. Governmental funds B. Proprietary funds C. Fiduciary Funds D. Governmental and Fiduciary Funds
B.
Which of the following is true with respect to the General Fund A. The General Fund is considered to be a major fund if the combined total of assets, liabilities, revenues and expenses exceeds 10% of the total of all governmental funds B. The General Fund is always considered to be a major fund when preparing fund basis financial statements. C. The General Fund is considered to be a major fund when preparing fund basis financial statements if it bears a financial benefit or burden to the primary government. D. The General Fund is not reported as part of the CAFR.
B.
With respect to Government-wide financial statements, which of the following is not required by GASB Statement 34? A. Statement of Net Assets B. Statement of Cash Flow C. Statement of Activities D. All of the above are required by GASB Statement 34
B.
In addition to a Statement of Net Assets, Proprietary Fund level financial statements include which of the following? A) Statement of revenues, expenses, and changes in fund net assets. B) Statement of cash flows. C)Both of the above. D)Neither of the above.
C)
A statement of Cash Flows is required for which type of Fund? A) Governmental B) Fiduciary C) Proprietary D) All of the above
C)
Where in the CAFR would one find the long-term liability for revenue bonds (paid from the revenues of an enterprise fund)? A)The proprietary funds Statement of Net Assets only. B)The government-wide Statement of Net Assets only. C)The government-wide Statement of Net Assets and the proprietary funds Statement of Net Assets. D)The government-wide Statement of Net Assets and the RSI Schedule of Bonds Payable.
C)
Which of the following is not considered Required Supplementary Information (RSI)? A)Management's Discussion and Analysis. B)Budgetary Comparison Schedule. C)Notes to the financial statements. D)None of the above; all are considered RSI.
C)
Which of the following is true regarding Management's Discussion and Analysis (MD&A)? A)MD&A is not considered part of Required Supplementary Information (RSI). B)MD&A takes the place of footnotes. C)MD&A should present an analysis of significant variations between the original and final budget. D)All of the above are true.
C)
Which of the following is true regarding the Comprehensive Annual Financial Report (CAFR)? A)The CAFR has three main sections: introductory, financial, and statistical. B)Required Supplementary Information includes a Budgetary Comparison Schedule for the General Fund and all major special revenue funds that have a legally adopted annual budget (unless a statement is prepared). C)Both of the above. D)Neither of the above.
C)
Which of the following is true regarding the government-wide Statement of Activities? A)The government-wide Statement of Activities may reflect expenses either by function (general government, public safety, etc.) or by object or natural classification (salaries, supplies, etc.). B)The government-wide Statement of Activities is prepared using the modified accrual basis of accounting for governmental activities and using the accrual basis of accounting for business-type activities. C)The government-wide Statement of Activities reflects taxes as general revenues. D)Indirect program expenses may not be allocated to the other functional areas.
C)
Which of the following is true regarding the governmental fund financial statements? A)The governmental fund financial statements include the Balance Sheet and the Statement of Revenues, Expenditures, and Changes in Fund Balances. B)The governmental fund financial statements are prepared using the current financial resources measurement focus and the modified accrual basis of accounting. C)Both of the above. D)Neither of the above.
C)
Which of the following is true regarding the governmental fund statements? A)The Governmental Funds Balance Sheet does not reflect capital assets or long-term debt. B)The Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances reports columns for major funds, non-major funds (in total), and total. C)Both of the above. D)Neither of the above.
C)
Which of the following is true regarding the proprietary fund financial statements? A)The Statement of Net Assets (or Balance Sheet) reflects equity as contributed equity and retained earnings. B)Normally, a reconciliation is required between the proprietary fund financial statements and the business-type activities column in the government-wide financial statements. C)Statements include the Statement of Net Assets, Statement of Revenues, Expenses, and Changes in Fund Net Assets, and Statement of Cash Flows. D)The Statement of Cash Flows may be prepared using either the direct or indirect methods.
C)
Which of the following is true regarding the proprietary fund financial statements? A)The proprietary fund financial statements include the Statement of Net Assets, the Statement of Revenues, Expenses, and Changes in Fund Net Assets, and the Statement of Cash Flows. B)The proprietary fund financial statements are prepared using the economic resources measurement focus and the accrual basis of accounting. C)Both of the above. D)Neither of the above.
C)
Which of the following is true regarding the reporting of Budget-Actual Comparisons? A)A Budget-Actual Comparison Schedule is required for the General Fund and all major special revenue funds that have a legally adopted annual budget. B)A Budget-Actual Comparison Statement may be prepared in lieu of the Schedule. C)Both of the above. D)Neither of the above.
C)
Which of the following is true regarding the reporting of major funds in the governmental funds financial statements? A)The General Fund is always considered a major fund. B)A fund is considered major if its revenues, expenditures, assets, or liabilities exceed 10% of the total governmental fund categories and if the same element (revenues, expenditures, assets, or liabilities) exceeds 5% of the governmental and enterprise funds combined. C)Both of the above. D)Neither of the above.
C)
Governmental-type funds label the excess of assets over liabilities on the balance sheet as: A. Net Assets B. Net Fund Balance and Liabilities C. Fund Balance D. Assets Net of Liabilities
C.
Which of the following is one of the criteria to determine if a governmental fund is considered to be a major fund? A. Total assets, liabilities, revenues or expenditures of the individual governmental fund constitutes 10 percent of the governmental funds category. B. Total assets, liabilities, revenues or expenditures/expenses are 5 percent of the total of the governmental and enterprise category. Other funds may be designated major funds at the discretion of management. C. Both A and B are required D. Either A or B will qualify a fund to be a major fund
C.
Which of the following statements is false? A. With respect to fund basis financial statements, a government may designate any fund to be a major fund if reporting that fund separately would be useful. B. When preparing fund basis financial statements, any funds not reported separately are aggregated and reported in a single column under the label non-major funds. C. When preparing fund basis financial statements, any funds not reported separately are reported by function. D. In addition to the government-wide statements, governments are required to prepare fund financial statements for governmental, proprietary and fiduciary funds.
C.
With respect to the preparation of fund basis financial statements, governmental funds other than the General Fund are considered to be major when which of the following conditions exist? A. With respect to fund basis financial statements, governmental funds are considered to be a major fund when total assets, liabilities, revenues, or expenditures of that individual governmental fund constitutes 10% of the total for the governmental fund category. B. With respect to fund basis financial statements. governmental funds are considered to be a major fund when total assets, liabilities, revenues, or expenditures of that individual governmental or enterprise fund are 5% of the total of the governmental and enterprise categories, combined. C. Both A and B are required for a governmental fund to be a major fund. D. Either A or B would fulfill the requirements.
C.
A budgetary comparison schedule is required for? A) The General Fund. B) Each special revenue fund that has a legally adopted annual budget. C) Enterprise funds. D) (A) and (B) only.
D)
Funds other than the General Fund must be considered a major fund when A)total assets, liabilities, revenues, or expenditures/expenses of that fund constitute 10 percent of either the governmental or enterprise category. B)total assets, liabilities, revenues, or expenditures/expenses of that fund are 5 percent of the total of the governmental and enterprise category. C) conditions of either A or B exist. D) conditions of both A and B exist.
D)
GASB requires which of the following (if applicable) to be included in the Notes to Financial Statements? A) Outstanding encumbrances B) The definition of cash and cash equivalents used in the statement of cash flows for proprietary funds. C) Interfund receivables and payables. D) All of the above.
D)
Which of the following funds requires a Budgetary Comparison Schedule? A) Enterprise Funds B) Internal Service Funds C) Investment Trust Funds D) General Fund
D)
Which of the following is considered Required Supplementary Information (RSI)? A)Management's Discussion and Analysis. B)Budgetary Comparison Schedule. C)Schedule of Risk Management Activities. D)All of the above are considered RSI.
D)
Which of the following is false regarding major fund reporting for governmental funds? A)The General Fund is always a major fund. B)Each fund that is considered major must be reported in a separate column in the governmental funds financial statements. C)A government may designate any fund as major if it feels that reporting that fund in the basic financial statements would be useful. D)None of the above, all are true.
D)
Which of the following is included in Required Supplementary Information (RSI)? A)Management's Discussion and Analysis (MD&A). B)Budgetary Comparison Schedule. C)The Schedule of Funding Progress and Schedule of Employer Contributions when the government reports a pension trust fund. D)All of the above.
D)
Which of the following is true egarding the government-wide financial statements? A)The government-wide financial statements are not required to present prior-year data. B)The government-wide financial statements include a Statement of Net Assets, Statement of Activities, but not a Statement of Cash Flows. C)The government-wide financial statements include infrastructure, and reflect depreciation, except for infrastructure using the modified approach. D)All of the above are true.
D)
Which of the following is true regarding GASB's definition of the financial reporting entity? A)The financial reporting entity might include a primary government, component units, joint ventures, or a jointly governed organization. B)Primary governments may be general-purpose governments (such as states, cities, and counties) or special-purpose governments that have separately elected governing bodies, are legally separate and are fiscally independent of other state or local governments. C)Blending is used to incorporate component units when those component units are, in substance, part of the primary government. D)All of the above are true.
D)
Which of the following is true regarding fiduciary fund financial statements? A)Fiduciary fund financial statements include the Statement of Fiduciary Net Assets, the Statement of Changes in Fiduciary Net Assets, and the Statement of Cash Flows prepared on the direct method. B)Fiduciary fund financial statements are prepared on the current financial resources measurement focus and modified accrual accounting. C)Both of the above. D)Neither of the above.
D)
Which of the following is true regarding the Budgetary Comparison Schedule? A)The Budgetary Comparison Schedule compares the actual results to the original budget, but display of variances is optional. B)The Budgetary Comparison Schedule must be prepared for the General Fund and each major special revenue fund that has a legally adopted budget. C)The Budgetary Comparison Schedule is considered part of the basic financial statements. D) Both A and B
D)
Which of the following is true regarding the government-wide Statement of Activities? A)General revenues include items such as charges for services and program fees. B)Fiduciary activities are included. C)Both of the above. D)Neither of the above.
D)
Which of the following is true regarding the governmental fund financial statements? A)The governmental fund financial statements include the Balance Sheet, and the Statement of Revenues, Expenditures, and Changes in Fund Balances. B)The governmental fund financial statements are prepared on the current financial resources measurement focus and modified accrual basis of accounting. C)The governmental fund Balance Sheet reflects the difference of assets minus liabilities as Fund Balance. D)All of the above are true.
D)
Which of the following is true regarding the governmental fund statements? A)The governmental fund statements include a Statement of Cash Flows prepared on the direct method. B)The governmental fund statements are prepared using the economical financial resources measurement focus and modified accrual accounting. C)Both of the above. D)Neither of the above.
D)
Which of the following items would likely appear in the reconciliation between the governmental fund financial statements and the governmental activities column in the government-wide financial statements? A)The inclusion of long-term liabilities in the government-wide financial statements and not in the governmental fund financial statements. B)The inclusion of depreciation of capital assets in the governmental activities column of the government-wide financial statements and not in the governmental fund statements. C)The additional accrual of some revenues and expenses in the government-wide financial statements that were not made in the governmental fund financial statements. D)All of the above.
D)All of the above.
In addition to the government-wide statements, governments are required to prepare fund financial statements for which of the following category of funds? A. Proprietary funds B. Governmental type funds C. Fiduciary funds D. All of the above
D.
The total fund balances presented in Governmental Funds Statements are different from the total net assets on the government-wide Statement of Net assets. Which of the following is not a reason for this difference? A. The two statements have different bases of accounting B. Capital assets used in government operations are not financial resources and therefore are not reported in the funds C. Some liabilities are not due and payable in the current period and are not reported in fund liabilities D. Accrued Wages Payable at year end are reported on the statement of net assets but are not reported in the fund statements
D.
With respect to the preparation of fund basis financial statements, governmental funds other than the major fund are considered to be major when which of the following conditions exist? A. With respect to fund basis financial statements, governmental funds are considered to be a major fund when total assets, liabilities, revenues, or expenditures of the individual governmental fund under consideration constitutes 25% of the total for the governmental fund category. B. With respect to fund basis financial statements, governmental funds are considered to be a major fund when total assets, liabilities, revenues, or expenditures of individual governmental or enterprise fund under consideration are 15% of the total of the governmental and enterprise categories, combined. C. Both A and B are required for a governmental fund to be a major fund. D. Neither A nor B are correct.
D.