Exam 9: Financial Reporting of State and Local Governments

Under GASB standards,if a government only has six governmental funds and two enterprise funds how many basic financial statements would it prepare?

Explain why other comprehensive bases of accounting (OCBOA)may be used by a state or local government instead of GASB standards which are generally accepted accounting principles (GAAP).

In reconciling the total fund balances of the governmental funds to the net position of governmental activities,which of the following would be added to the net position of governmental activities?

For the following items that require reconciliation between governmental funds financial statements and governmental activities financial statements at the government-wide level according to GASB standards,indicate whether the reconciliation will (A)always be subtracted from fund balances-governmental funds,(B)always be added to fund balances-governmental funds,or (C)may be added to or subtracted from fund balances-governmental funds in arriving at net position of governmental activities. _____ 1.Capital assets used in governmental activities _____ 2.Long-term liabilities that are not payable in the current period _____ 3.Net position of internal service funds that are primarily governmental in nature _____ 4.Accrued interest payable not due in the current period

Which of the following kinds of information would not be provided by management's discussion and analysis (MD&A)?

Fiduciary activities are not reported in the government-wide financial statements under GASB standards.

A government is financially accountable for another entity if it appoints the voting majority of the entity's governing board.

To be reported as a major component unit,a component unit must meet the same 10 percent and 5 percent size requirements as major funds.

A discretely presented component unit is presented as a major fund on the governmental fund financial statements.

One of the required reconciliations in converting governmental fund financial statements to governmental activities statements at the government-wide level is an adjustment for internal service funds' assets,liabilities,operating income (loss),and transfers.

What is meant by the term "reporting entity" in accounting for state and local governments?

A financial reporting entity is defined as a primary government,as well as all other organizations that have an operational relationship with the primary government.

According to GASB Concepts Statement 1 a primary objective of financial reports is to provide information useful in determining the accountability of the government.

The three sections of the comprehensive annual financial reports of state and local governments are (1)an introductory section,(2)a financial section,and (3)a supplemental section.

Under GASB standards,only proprietary funds prepare a statement of cash flows.

Which of the following is one of the three sections of a comprehensive annual financial report?

On the statement of revenues,expenditures,and changes in fund balance for governmental funds,how are capital outlays reported?

An example of information found in the statistical section of the comprehensive annual financial report (CAFR)is demographic information such as unemployment rates,and personal income of citizens.

Statistical tables included in comprehensive annual financial reports should provide social and economic data,in addition to financial data,to assist financial statement users in better understanding the activities and condition of the government.

Balsam City's library board is appointed by the city council,which has agreed to subsidize the operating costs of the library at a material amount to be determined each year.In addition,the city is paying debt service on general obligation bonds issued to construct the library.Based on generally accepted accounting principles (GAAP)criteria for defining the reporting entity: