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Chapter 10: Government-Wide Financial Statements

Multiple Choice

1. To what extent should fund or fund type data be displayed on the face of government-wide financial statements? a. Information should be displayed for the government as a whole, but individual funds or fund types should not be displayed. b. Information should be displayed by fund type, with a total for the government as a whole. c. Information should be displayed by major fund, with a total for the government as a whole. d. Information should be displayed by major fund, except for fiduciary funds.

Answer: a

2. Which measurement focus should be used in government-wide financial statements? a. the same measurement focus as that used in accounting for each fund type b. the current financial resources measurement focus

c. the economic resources measurement focus
d. the economic resources measurement focus for governmental fund types and the current financial resource measurement focus for proprietary and fiduciary fund types

Answer: c

3. How should the difference between assets and liabilities be characterized in government-wide financial statements? a. as fund balances
b. as net assets
c. as fund equity
d. as available for spending

Answer: b

4. How should component units be displayed in government-wide financial statements a. Component units should not be reported in government-wide financial statements. b. All component units should be included either in the column for governmental activities or in the column for business-type activities. c. Component units should be blended where appropriate; discretely presented component units should be reported in a separate column. d. All component units should be included with other business-type activities.

Answer: c

5. How should bonds payable be reported on government-wide financial statements? a. Bonds payable should be reported as an offset to capital assets in the assets section of the statement of net assets. b. Bonds payable should not be reported on the government-wide financial statements. c. Bonds payable should be separated between amounts due to be paid in one year and amounts due to be paid in more than one year. d. Bonds payable should be reported in the net assets section of the statement of net assets.

Answer: c

6. In accordance with a bond agreement, assets are being accumulated in a sinking fund to pay bonds due in 20 years. The assets are reported as Investments. What other information should be reported about that item on the face of the government-wide financial statements? a. It should be reported as part of net assets invested in capital assets, net of related debt. b. It should be reported as part of net assets restricted for debt service. c. It should be reported as part of net assets reserved for debt service. d. It should be reported as part of fund balance reserved for debt service.

Answer: b

7. A city health department charges fees for copies of birth certificates provided to its citizens. How should those fees be reported in the government-wide statement of activities? a. as a separate item of revenue in the revenue section b. as a direct reduction of the expenses of the health department c. as an element of program revenues, which reduce gross expenses of the health department d. as a special item

Answer: c

8. A city government levies property taxes that are recorded directly into a Debt Service Fund, rather than the General Fund. How should those property taxes be reported in the government-wide statement of activities? a. as...
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