Question

Assets of governmental-type funds include cash and investments, but not capital assets. Select one: True False

Answer 1

1) TRUE

Reason: Capital Assets used in the governmental activities are not financial resources. Hence they are not reported in the Funds.

2) TRUE

Reason: Capital Projects Funds account for Construction, Renovation and Acquisition of Capital Assets such as Equipment, Roads etc. Governments are not required to account for all the capital expenditures in this type of fund. Therefore they appear in General fund or even special revenue funds. Hence Long-term borrowing is not required to be reported as a liability of the Capital Projects Fund as they will be reported in General fund or Special Revenue funds.

3) TRUE

Reason: Reporting of Fiduciary activities on the fiduciary fund financial statements is to be done based on requirements of GASB 84. As per this, the following financial statements are to be used to present fiduciary fund financial information.

i) Statement of fiduciary net position - To report Assets, Deferred outflows of resources, Liabilities, etc.

ii) Statement of changes in fiduciary net position - To report additions to and deductions from pension (and other employee benefits) trust funds, investment funds, etc.