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Chapter 2 Overview of Financial Reporting for State and Local Governments True/False Questions 1. In addition to the government-wide statements, governments are required to prepare fund financial statements for proprietary funds only. Answer: False 2. In addition to the government-wide statements, governments are required to prepare fund financial statements for governmental, proprietary and fiduciary funds. Answer: True 3. The General Fund is always considered to be a major fund when preparing fund basis financial statements. Answer: True 4. With respect to fund basis financial statements, governmental funds are considered to be a major fund when total assets, liabilities, revenues and expenditures combined are at least 10% of the total for the governmental funds category. Answer: False 5. With respect to fund basis financial statements, a government may designate any fund to be a major fund if reporting that fund separately would be useful. Answer: True 6. When preparing fund basis financial statements, any funds not reported separately are aggregated and reported in a single column under the label non-major funds . Answer: True 7. When preparing fund basis financial statements, any funds not reported separately are reported individually by function. Answer: False 8. Governmental fund statements are prepared using the current financial resources measurement focus and modified accrual basis of accounting. Answer: True 1 Chapter 2 Overview of Financial Reporting for State and Local Governments 9. Governmental fund statements are prepared using the current financial resources measurement focus and modified accrual basis of accounting. Answer: True 10. The total fund balances reported in the total column of the fund basis statements must be reconciled to the total net assets presented in the governmental activities column of the government-wide Statement of Net Assets Answer: True 11. A Comprehensive Annual Financial Report (CAFR) would include an introductory section, management's discussion and analysis, basic financial statements, required supplementary information other than MD&A, combining and individual fund statements, narrative explanations, and statistical section. Answer: True 12. According to GASB, a primary government can only be a state or a general-purpose local government, such as a city or county. Answer: False 13. Blending of financial information is done only when component units and the primary government are so intertwined that they are essentially the same. Answer: True 14. The statistical section of the CAFR contains the combining schedules of non-major funds. Answer: False 15. The government-wide financial statements present the government as a whole, excluding component units and including fiduciary activities. ... View Full Document

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