Why are separate operating statements prepared for governmental funds and proprietary funds in the fund-level financial statements?
A)because a single operating statement would require too many columns for the average reader to understand readily
B)because governmental funds use the full accrual basis of accounting in the fund financial statements,whereas proprietary funds use the modified accrual basis of accounting
C)because governmental funds have a different measurement focus and basis of accounting than proprietary funds in the fund-level financial statements
D)because governmental fund operating statements need to be read together with the "budget and actual" schedules,whereas proprietary fund operating statements do not

Question

Quizplus · Accepted Answer

Governmental funds have a current financial resources measurement focus and use the modified accrual basis of accounting, whereas proprietary funds have an economic resources measurement focus and use the accrual basis of accounting. Thus, separate operating statements are necessary to properly reflect the financial activity of each type of fund.

Why Are Separate Operating Statements Prepared for Governmental Funds and Proprietary