chapter 2 Smart Book

Which of the following statements regarding the Statement of Cash Flows are correct?

-The reconciliation of income to cash flows begins with operating income for proprietary fund statements. -The FASB format has three sections and the GASB format has four. -Cash flows from interest do not appear in operating activities under the GASB format.

Specific items that must be included in MD&A include a(n) ______.

-brief discussion of the financial statements -analysis of overall financial position and results of operations -description of significant capital assets and long-term debt activity during the year

The GASB format cash flow statement ______.

-does not report cash flows from interest revenue and expense in the operating activities section -begins the reconciliation of income to cash flows from operating activities with operating income -requires cash flows from operating activities to be prepared using the direct method -has four sections instead of three -includes cash received from investment income as an investing activity

A Statement of Fiduciary Net Position ______.

-includes all trust and agency fund types -reports fiduciary funds by fund type

The statistical section of the CAFR ______.

-is not audited -helps users assess a government's economic condition

The summary of significant accounting policies note typically includes the ______.

-policy regarding restricted and unrestricted resources when an expense is incurred for both purposes -policy for capitalizing assets and estimating useful lives -revenue recognition policies used in fund financial statements

The summary of significant accounting policies note typically includes a description of ______.

-the government-wide statements including measurement focus and basis of accounting -the types of transactions included in program revenues -component units and their relationship to the reporting entity

Fiduciary funds ______.

-use accrual accounting -are not included in government-wide financial statements

In a complete CAFR, the total column in the combining statements will be the same as the ______ ______ column in the basic financial statements.

Blank 1: nonmajor Blank 2: funds

On the classified balance sheet for proprietary funds, net position is reported as (1) net investment in capital assets, (2) ___________, or (3) ________________.

Blank 1: restricted Blank 2: unrestricted

When governments use the modified approach for reporting infrastructure, ______.

a schedule comparing estimated and actual maintenance costs is required

A complete CAFR presents _______ statements to reflect its nonmajor funds whenever a nonmajor column is used in one of the fund statements.

combining

On the proprietary fund Statement of Revenues, Expenses, and Changes in Fund Net Position, interest revenue and expense are ______.

considered nonoperating items

The governmental Statement of Revenues, Expenditures, and Changes in Fund Balance reports ______.

expenditures only

GASB requires that trust fund investments be reported at ______.

fair value

On the governmental funds Statement of Revenues, Expenditures, and Changes in Fund Balance, within the current category, expenditures are reported by ______.

function

When governments use the ______ approach for reporting infrastructure, a schedule of the assessed conditions of infrastructure assets must be included in RSI.

modified

If separate GAAP basis financial statements for individual pension and other employee benefit plans are not issued, GASB ______.

requires the reports be included in notes to the basic financial statements

Failure to include the statistical section in an annual financial report ______ result in a modified or adverse audit opinion.

will not