Question

A county’s 2019 operating statement for governmental funds reports transportation expenditures of $19,000,000. The government-wide statement of activities reports transportation expenses of $55,000,000. Which one of the following items would not explain why the government-wide statement reports a higher number than the governmental funds statement?

a. The $19,000,000 does not include depreciation on transportation-related equipment.

b. The $55,000,000 includes accrued pension costs earned this year by transportation-related employees.

c. The $19,000,000 does not include expenses not paid in cash this year.

d. The $55,000,000 includes temporary loans made by the transportation-related funds.

Answer 1

ANSWER The government-wide statements bring the financial activity together in one place and report accrual-based economic government-wide statements organize information by whether it relates to governmental activitics or busincss-typc activities. The fiduciary funds such as pcnsion trusts and agcncy funds) arc not includcd in the govcrnment-widc statemcnts, bccausc thc resources thcy account for do not bclong to the resources information. The government. The governmental and business-typc activitics combine to represent the total primary government. Additionally, discretely presented component units-legally separate entities for which the primary government is financially accountable-are shown on the face of the government-wide statements but are not included in the total for the primary government That means government wide statement of activities reports expenses on accrual basis. Hence, b. The 55,000,000 includes accrued pension costs earned this year by transportation related employees