Exam 15: Financial Reportingthe Comprehensive Annual Financial Report and the Financial Reporting Entity

In the basic financial statements, separate sets of fund financial statements should be presented for

Wakefield Village and Wakefield County were partners in the development of the Wakefield Water Authority, which is a separate legal entity. Neither the village nor the county will share in any profits of the Authority. Both, however, are obligated to fund any deficits or debt defaults that may occur, though this scenario is considered to be highly unlikely. Both the village and the county appoint three of the seven Water Authority board members. The seventh is appointed by another village in the county. Both the Wakefield Village and Wakefield County should report the Authority as

A "dual opinion" audit is one where

What is the maximum number of columns that could appear on the statement of fiduciary net position in the fund financial statements presented as part of the basic financial statements?

Information about related party transactions must be disclosed by a state or local government for which of the following? I. Related organizations II. Jointly governed organizations III. Joint ventures

How should information about each major discretely presented component unit be presented in the financial statements?

In reviewing their governmental funds, a local municipality determines that three of the funds (including the General Fund) are considered major funds and the remaining six governmental funds are nonmajor. However, management prefers to report all of its governmental funds as major funds. What is the maximum number of fund columns that could be presented on the governmental fund balance sheet?

Which fund type would be reported in the Statement of Revenues, Expenditures, and Changes in Fund Balances?

Which of the following potential component units would not be reported as blended component unit of the county?

Assume that a blended component unit of the town has its own General Fund, Special Revenue Fund, and Capital Projects Fund. All funds meet the major fund criteria. The primary government has a General Fund, three Special Revenue Funds, one Permanent Fund, one Debt Service Fund, and three Capital Projects Funds. All but the Permanent Fund and two Special Revenue Funds of the primary government are major funds. How many major Special Revenue Funds would the primary government report in the governmental funds financial statements?

If a governmental entity has a blended component unit, the note disclosures should include all of the following except

Which of the following financial statements would not be reported anywhere in the fund financial statements presented as part of the basic financial statements?

Statistical tables are

Castlewood City School District has a separately elected governing body that administers the public school system. Although the district's budget is subject to the approval of the city council, the city is not obligated in any manner to provide financial support to the school district nor can the city access the resources of the school district. The district's financial activity should be

Assume that a government has three nonmajor Enterprise Funds. Which of the following statements regarding the reporting requirements in a CAFR is false?

A city has three related entities. Its finance and accounting staff is trying to determine which, if any, of those entities must be included in the city reporting entity. Also, for the entities that are included the staff must determine whether they are to be blended or discretely presented. Explain how each of the related entities should be treated and why. $\underline{\text{ Situations: }}$ 1. The first entity is the city school district. The district has a separately elected board and is legally separate from the city. The school board can establish its own budget except that its property tax levy must be approved by the city council. The city does not guarantee the debt of the schools or have any other authority over the school district. 2. The second entity is the municipal gas utility. The city appoints the seven members of the utility governing board and can remove them at will. The city must approve the budget and the rate structure of the utility. The utility cannot issue bonded debt without the city council's prior approval. The city is entitled to, and regularly receives, the operating surpluses of the utility. 3. The third entity is the City Library Commission. According to the commission's charter, the commission board consists of the city mayor, the city finance director, and the superintendent of the city schools, and two other members of city council besides the mayor. City council consists of the mayor and four other council members. The library commission budget must be approved by the city council, and all long-term debt issued by the Library Commission is to be repaid by the city.

Footnote information that duplicates information in financial statements included in the CAFR

$\underline{\text{ Requirements: }}$ 1. Describe discrete presentation in the context of the government-wide statements. Assume that a government has five major discretely presented component units. Include the reporting and disclosures required for each of the major component units. 2. Describe blending. When is it required? Is it permitted under other circumstances-i.e., when is it not required?

In discrete presentation, component unit

Which fund types report the results of operations using a Statement of Revenues, Expenditures, and Changes in Fund Balances?