Question 1

Management's Discussion and Analysis (MD&A)in The Comprehensive Annual Financial Report (CAFR)is part of the Financial Section.

Accepted Answer

A) True 
 B)False

Question 2

The Governmental Accounting Standards Board considers the financial reporting entity to include the primary government,but not its component units.

Accepted Answer

A) True 
 B)False

Question 3

Prior-year data is required for government-wide financial statements.

Accepted Answer

A) True 
 B)False

Question 4

List the fund financial statements required by GASB Statement 34 for proprietary type funds.

Accepted Answer

The answer of List the fund financial statements required by...

Question 5

Fiduciary fund statements are prepared using the current financial resources measurement focus and modified accrual basis of accounting.

Accepted Answer

A) True 
 B)False

Question 6

With respect to the preparation of fund basis financial statements,governmental funds other than the General fund are considered to be major when which of the following conditions exist?

Accepted Answer

A)  With respect to fund basis financial statements, governmental funds are considered to be a major fund when total assets, liabilities, revenues, or expenditures of the individual governmental fund under consideration constitutes 25% of the total for the governmental fund category. 
B)  With respect to fund basis financial statements, governmental funds are considered to be a major fund when total assets, liabilities, revenues, or expenditures of individual governmental or enterprise fund under consideration are 15% of the total of the governmental funds and enterprise categories, combined. 
C)  Both A and B are required for a governmental fund to be a major fund. 
D)  Neither A nor B are correct.

Question 7

The fund balance reported in the Governmental Funds Balance Sheet must equal the total Net Position in the governmental activities column of the government-wide Statements of Net Position.

Accepted Answer

A) True 
 B)False

Question 8

A complete CAFR includes combining financial statements to reflect major funds.

Accepted Answer

A) True 
 B)False

Question 9

A statement of Cash Flows is required for which type of Fund?

Accepted Answer

A)  Governmental 
B)  Fiduciary 
C)  Proprietary 
D)  All of the above

Question 10

Governmental-type funds label the excess of assets over liabilities on the balance sheet as:

Accepted Answer

A)  Net Position 
B)  Net Fund Balance and Liabilities 
C)  Assets Net of Liabilities 
D)  Fund Balance

Question 11

The total fund balances presented in Governmental Funds Statements are different from the total Net Position on the government-wide Statement of Net Position.Which of the following is not a reason for this difference?

Accepted Answer

A)  The two statements have different bases of accounting 
B)  Capital assets used in government operations are not financial resources and therefore are not reported in the funds 
C)  Some liabilities are not due and payable in the current period and are not reported in fund liabilities 
D)  Accrued Wages Payable at year end are reported on the statement of Net Position but are not reported in the fund statements

Question 12

Government-wide statements are to be prepared using the current financial resources measurement focus and modified accrual basis of accounting.

Accepted Answer

A) True 
 B)False

Question 13

Identify three items often found in Required Supplementary Information.

Accepted Answer

The answer of Identify three items often found in Required...

Question 14

GASB Statement 34 requires supplementary information (RSI)for what two major areas?

Accepted Answer

The answer of GASB Statement 34 requires supplementary information (RSI)for...

Question 15

Which of the following is true regarding the proprietary fund financial statements?

Accepted Answer

A)  Statements include the Statement of Net Position, Statement of Revenues, Expenses, and Changes in Fund Net Position, and Statement of Cash Flows. 
B)  Normally, a reconciliation is required between the proprietary fund financial statements and the business-type activities column in the government-wide financial statements. 
C)  The Statement of Net Position reflects equity as contributed equity and retained earnings. 
D)  The Statement of Cash Flows may be prepared using either the direct or indirect methods.

Question 16

Which of the following is true regarding Management's Discussion and Analysis (MD&A)?

Accepted Answer

A)  MD&A is not considered part of Required Supplementary Information (RSI). 
B)  MD&A takes the place of footnotes. 
C)  MD&A should present an analysis of significant variations between the original and final budget. 
D)  All of the above are true.

Question 17

Which part of the financial section of the CAFR is considered "Required Supplementary Information? "

Accepted Answer

A)  Auditor's Report 
B)  Management's Discussion and Analysis 
C)  Government-Wide Financial Statements 
D)  Fund Financial Statements

Question 18

Which of the following is true regarding the government-wide Statement of Activities?

Accepted Answer

A)  In the government-wide Statement of Activities, "special items" are those items that are both unusual and infrequent and are not under the control of management. 
B)  Transfers between governmental and business type activities are eliminated and do not appear on the government-wide Statement of Activities. 
C)  The Statement of Activities includes depreciation expense. 
D)  Taxes levied, including those restricted to a particular purpose, are reported as program revenue.

Question 19

The fund balance reported in the Governmental Funds Balance Sheet must be reconciled to the total Net Position in the governmental activities column of the government-wide Statements of Net Position.

Accepted Answer

A) True 
 B)False

Question 20

A reconciliation from Enterprise funds statements to government-wide statements is not necessary because …

Accepted Answer

A)  They both use the same measurement focus and basis of accounting (economic resources, accrual) 
B)  They both use the same measurement focus and basis of accounting (current financial resources, modified accrual) 
C)  They use a different measurement focus and basis of accounting. 
D)  Enterprise funds are not included in the government-wide statements

Exam 2: Overview of Financial Reporting for State and Local Governments

Management's Discussion and Analysis (MD&A)in The Comprehensive Annual Financial Report (CAFR)is part of the Financial Section.

The Governmental Accounting Standards Board considers the financial reporting entity to include the primary government,but not its component units.

Prior-year data is required for government-wide financial statements.

List the fund financial statements required by GASB Statement 34 for proprietary type funds.

Fiduciary fund statements are prepared using the current financial resources measurement focus and modified accrual basis of accounting.

With respect to the preparation of fund basis financial statements,governmental funds other than the General fund are considered to be major when which of the following conditions exist?

The fund balance reported in the Governmental Funds Balance Sheet must equal the total Net Position in the governmental activities column of the government-wide Statements of Net Position.

A complete CAFR includes combining financial statements to reflect major funds.

A statement of Cash Flows is required for which type of Fund?

Governmental-type funds label the excess of assets over liabilities on the balance sheet as:

The total fund balances presented in Governmental Funds Statements are different from the total Net Position on the government-wide Statement of Net Position.Which of the following is not a reason for this difference?

Government-wide statements are to be prepared using the current financial resources measurement focus and modified accrual basis of accounting.

Identify three items often found in Required Supplementary Information.

GASB Statement 34 requires supplementary information (RSI)for what two major areas?

Which of the following is true regarding the proprietary fund financial statements?

Which of the following is true regarding Management's Discussion and Analysis (MD&A) ?

Which part of the financial section of the CAFR is considered "Required Supplementary Information? "

Which of the following is true regarding the government-wide Statement of Activities?

The fund balance reported in the Governmental Funds Balance Sheet must be reconciled to the total Net Position in the governmental activities column of the government-wide Statements of Net Position.

A reconciliation from Enterprise funds statements to government-wide statements is not necessary because …