Exam 11: Issues of Reporting, Disclosure, and Financial Analysis

The Friends of the City Public Library Foundation is a legally separate, tax-exempt 501c3 entity organized for the purpose of raising funds to provide financial assistance to the Library.Members of the board of the Foundation are elected by the existing Foundation board members.The Foundation provides financial assistance to the Library, but the Foundation receives no financial support from the Library.If dissolved, all of the Foundation assets would revert to the Library.In what manner should the Foundation be presented in the financial statements of the Library?

The County Commission appoints a voting majority of the members of the Board of a particular organization.The County Commission cannot impose its will upon the organization.There is no potential for the organization to provide any financial benefit to the County nor is there any potential for the organization to impose any financial burden on the county.The organization is an example of an:

Which of the following is a necessary characteristic of a component unit?

Two cities entered into a contractual agreement to operate a landfill.The cities each contributed the necessary assets to operate the landfill in proportion to their populations.First City has the ability to appoint five members of the seven-person governing body of the landfill.The appointees serve for six-year terms, cannot be reappointed, and can be removed only for cause.First City has no obligation to contribute to the landfill if the landfill revenues are insufficient to cover current operating costs.The landfill would be considered an

The County created a legally separate County Hospital authority.Members of the board of the County Hospital are elected in county-wide elections.The County must approve the budget of the Hospital, but the hospital receives no financial support from the County, except that the County pays the hospital bills for county indigents.All revenues of the Hospital are user fees.In what manner would the Hospital be included in the County's Basic Financial Statements?

Which of the following is necessary for a governmental entity to be considered fiscally independent?

The State University Foundation is a legally separate, tax-exempt 501c3 entity organized for the purpose of raising funds to provide scholarships only to academically qualified students at the State University.The existing University Foundation board members elect new members of the board.The Foundation provides scholarships to students of the State University, but the Foundation receives no financial support from the University.The Foundation is an example of:

The University Foundation is a legally separate, tax-exempt 501c3 entity organized for the purpose of raising funds to provide scholarships only to academically qualified students at State University.Members of the board of the University Foundation are elected by the existing Board of Trustees.The Foundation provides scholarships to students of State University, but the Foundation receives no financial support from the University.In what manner would State University include the Foundation in its financial statements?

Two cities entered into a contractual agreement to operate a landfill.The cities each contributed the necessary assets to operate the landfill in proportion to their populations.Each city has the ability to appoint two members of the governing body of the landfill, and each has an equity interest in the arrangement.The assets contributed by First City were primarily in the form of property and equipment that had been used in general government activities.In what manner would the landfill be included in First City's government-wide financial statements?

The Marsh River School District, a legally separate school district that has a separately elected governing body, cannot enter into any debt agreements without the approval of the County Commission.Marsh River School District would be considered an:

The comprehensive annual financial report CAFR is divided into three main sections: the table of contents section, the auditors' report section, and the financial section.

The auditor's report generally includes an opinion on which of the following sections of the CAFR?

Two cities entered into a contractual agreement to operate a landfill.The cities each contributed the necessary assets to operate the landfill in proportion to their populations.Each city has the ability to appoint two members of the governing body of the landfill.The assets contributed by First City were primarily in the form of property and equipment that had been used in general government activities.In what manner would the landfill be included in First City's fund financial statements?

The financial section of a CAFR includes:

A primary government can impose its will on a potential component unit if it has the authority to modify or approve the unit's budget.

There are only two government-wide statements: the statement of net assets and the statement of activities.

Required supplementary information RSI is considered part of the basic financial statements.

Which of the following is NOT a primary government?

The City created a legally separate Housing Authority to provide low-income housing to residents of the City.The City issues debt for the Housing Authority in the name of the City, but the Housing Authority is responsible for repayment of the debt.The Housing Authority is governed by a board composed of all 5 members of the City Council.Actions can be taken by the Authority upon receiving an affirmative vote by a simple majority of the board.The Housing Authority would be considered an:

Governments must combine their discretely presented component units into both the fund and the government-wide statements.