Governmental and Fund Accounting: Week 1 Exercises and Financial Statement Reporting

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Governmental and Fund Accounting: Week 1 Exercises and FinancialStatement ReportingHomework week 110/28/12Exercise 2-31.Activities of a general purpose government that provide the basis for GASB’sfinancial accounting and reportingframework consist of governmental, business-type,and fiduciary. True2.The permanent fund is one of the several types of governmental funds. True3.Government-wide financial statements report financial transactions related to thegovernmental, business-type, and fiduciary activities of the government.False,becausefiduciary activities are omitted from the government-wide financial statements and onlyreported in the fiduciary fund financial statements.4.A statement of revenues, expenditures, and changes in fund balances is used to reportthe inflows and outflows of current financial resources of governmental funds.True5.The accounting system for proprietary funds should provide for integration ofbudgetary accounts.False,becausepropriety funds are designed for business-typeactivities where fees are associated. Therefore it is not suggested for propriety funds.6.Financial information for component units must be reported by discrete presentation.False. Reporting thefinancial information of component units in a separate column ofthe government-wide financial statements is referred to as a discrete presentation.Discrete presentation is the most common method used to report component units andshould be used unless the financial activities of the component unit are so intertwinedwith those of the primary government that they are, in substance, the same as the primarygovernment. In such cases the component unit’s financial information should be reportedin the same columns as the financial information of the primary government itself. Thismethod of reporting is known as a blended presentation.7.All assets, both current and noncurrent, and all liabilities, both current and noncurrent,are reported in the government-wide financial statements.True8.All proprietary fund financial information is reported in the Business-type Activitiescolumn of the government-wide financial statements.False,becausethe Business-typeActivities column of the government-wide financial statementsisdesigned for services orgoodsand includes charges to customers or others for both governmental and business-

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