Question

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.

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 only when those component units are, in substance, part of the primary government.

            D) All of the above are true.

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.

Which of the following would not be a nonexchange transaction for a state government?

            A) Fines and forfeits.

            B) Property taxes.

            C) Sales of lottery tickets.

            D) Income taxes.

Answer 1

Which of the following statements is false? Answer is (C) When preparing fund basis financial statements, any funds not reported separately are reported by function. Fund financial statement reports primary government major funds individually and nonmajor fund in aggregate. Which of the following is true regarding GASB's definition of the financial reporting entity? Answer is (D) All of the above are true. GASB definition of financial reporting entity applies to primary governments, governmental joint ventures, jointly governed organizations, and other stand-alone governments also it applies to the separately issued financial statements of governmental component units. Which of the following is true regarding the governmental fund statements? Answer is C) Both of the above. Governmental fund statement prepared using current financial resources focus and modified accrual basis of accounting Which of the following would not be a nonexchange transaction for a state government? Answer is (c) Sale of lottery tickets Non exchange transaction are trsactions in which one entity received something from another entity without directly providing something of approximately of equal value in return, therefore sale of lottery tickets would not be nonexchange transaction as it involves cash receipt in exchange.