Question 1

Combining statements are required whenever a non-major column is used in one of the fund financial statements.

Accepted Answer

This statement is true. Combining statements are required whenever a non-major column is used in one of the fund financial statements in order to present information on a basis consistent with the primary statements.

Question 2

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.

Accepted Answer

Both A and B are required for a governmental fund to be considered a major fund for the purposes of preparing fund basis financial statements. The 10% threshold set forth in option A applies specifically to governmental fund categories, while the 5% threshold in option B applies to both governmental and enterprise funds combined. Therefore, both criteria must be met for a governmental fund to be classified as "major" for financial reporting purposes.

Question 3

The fund balance reported in the Governmental Funds Balance Sheet must match the total net assets in the governmental activities column of the government-wide Statements of Net Assets.

Accepted Answer

The fund balance in the Governmental Funds Balance Sheet is based on a modified accrual basis, while the total net assets in the governmental activities column of the government-wide Statements of Net Assets are based on a full accrual basis, leading to differences in reporting.

Question 4

Fund balance is an account title used only in governmental funds to indicate the excess of assets over liabilities.

Accepted Answer

Fund balance is an account title used exclusively in governmental funds to represent the difference between assets and liabilities.

Question 5

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.

Accepted Answer

The answer of With respect to the preparation of fund...

Question 6

Governmental-wide financial statements use the economic resources measurement focus and the accrual basis of accounting.

Accepted Answer

This is true. Governmental-wide financial statements are prepared utilizing the economic resources measurement focus and the accrual basis of accounting in order to provide users with a better understanding of a government's overall financial performance and position.

Question 7

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.

Accepted Answer

When preparing fund basis financial statements, any funds not reported separately are NOT reported by function. Rather, they are aggregated and reported in a single column under the label non-major funds.

Question 8

Under GASB Statement 35,public colleges and universities are permitted to report as special purpose governments engaged in:
A) Business-type activities only.
B) Both governmental and business-type activities.
C) Governmental activities only.
D) Any one of the above.

Accepted Answer

The answer of Under GASB Statement 35,public colleges and universities...

Question 9

A government may designate any fund to be a major fund if reporting the fund separately would be useful.

Accepted Answer

According to Governmental Accounting Standards Board (GASB) Statement No. 34, a government may designate any fund to be a major fund if reporting the fund separately would be useful.

Question 10

The Fund Balance reported in the Governmental Funds Balance Sheet must be reconciled to the Net Assets of Governmental Activities in the Statement of Net Assets.

Accepted Answer

The Fund Balance reported in the Governmental Funds Balance Sheet represents the current financial resources of a government, while the Net Assets of Governmental Activities in the Statement of Net Assets represent the total financial position of the government. Therefore, a reconciliation is necessary to ensure consistency between the two statements.

Question 11

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

Accepted Answer

In addition to the government-wide statement, governments are required to prepare fund-level financial statements within the three categories of funds; governmental, proprietary and fiduciary.

Question 12

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 never considered to be a major fund when preparing fund basis financial statements.
D) The General Fund is not reported as part of the CAFR.

Accepted Answer

The General Fund is always considered a major fund in governmental accounting because it is the primary operating fund of a government, used to account for all financial resources except those required to be accounted for in another fund.

Question 13

Capital assets must be itemized on governmental fund balance sheets.

Accepted Answer

Governmental fund balance sheets do not report capital assets; they are reported in the government-wide financial statements.

Question 14

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

Accepted Answer

Governmental-type funds use the term "fund balance" to indicate the difference between assets and liabilities. This represents the amount of resources that remain after specific obligations and restrictions have been satisfied. Choice A, net assets, is used in proprietary funds, and Choice D, assets net of liabilities, is not a term commonly used in governmental-type accounting. Choice B, net fund balance and liabilities, is not a commonly used term either.

Question 15

The Comprehensive Annual Financial Report (CAFR)contains four major sections:
 introductory,financial,supplementary,and statistical.

Accepted Answer

The CAFR has three major sections: introductory, financial and statistical.

Question 16

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.

Accepted Answer

Governmental fund statements are prepared using the current financial resources measurement focus and the modified accrual basis of accounting.

Question 17

A Comprehensive Annual Financial Report for a state or local governmental unit should contain an introductory section,a financial section,and a statistical section.

Accepted Answer

This is true. The introductory section typically includes a letter of transmittal, organizational chart, and a list of government officials. The financial section includes information about the government's financial position and activities, such as the balance sheet, income statement, and statement of cash flows. The statistical section provides additional data and information about the government's financial and economic condition.

Question 18

The fund balance reported in the Governmental Funds Balance Sheet must be reconciled to the total net assets in the governmental activities column of the government-wide Statements of Net Assets.

Accepted Answer

This is true. The government-wide financial statements provide a summary of the government's financial position, while the fund financial statements show financial information related to specific funds. Therefore, reconciling the two is necessary to gain a complete understanding of the government's financial position.

Question 19

A government may not designate a fund to be a major fund if it does not meet specified criteria.

Accepted Answer

The answer of A government may not designate a fund...

Question 20

A complete CAFR includes combining financial statements to reflect major funds.

Accepted Answer

A complete CAFR includes combining financial statements to reflect major funds, as well as presenting non-major funds and other information about the government's financial activities.

Quiz 2: Overview of Financial Reporting for State and Local Governments

Combining statements are required whenever a non-major column is used in one of the fund financial statements.

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?

The fund balance reported in the Governmental Funds Balance Sheet must match the total net assets in the governmental activities column of the government-wide Statements of Net Assets.

Fund balance is an account title used only in governmental funds to indicate the excess of assets over liabilities.

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?

Governmental-wide financial statements use the economic resources measurement focus and the accrual basis of accounting.

Which of the following statements is false?

Under GASB Statement 35,public colleges and universities are permitted to report as special purpose governments engaged in:

A government may designate any fund to be a major fund if reporting the fund separately would be useful.

The Fund Balance reported in the Governmental Funds Balance Sheet must be reconciled to the Net Assets of Governmental Activities in the Statement of Net Assets.

In addition to the government-wide statements,governments are required to prepare fund financial statements for which of the following category of funds?

Which of the following is true with respect to the General Fund.

Capital assets must be itemized on governmental fund balance sheets.

Governmental type funds label the excess of assets over liabilities on the balance sheet as:

The Comprehensive Annual Financial Report (CAFR)contains four major sections: introductory,financial,supplementary,and statistical.

Governmental fund statements are prepared using:

A Comprehensive Annual Financial Report for a state or local governmental unit should contain an introductory section,a financial section,and a statistical section.

The fund balance reported in the Governmental Funds Balance Sheet must be reconciled to the total net assets in the governmental activities column of the government-wide Statements of Net Assets.

A government may not designate a fund to be a major fund if it does not meet specified criteria.

A complete CAFR includes combining financial statements to reflect major funds.