ch11 - Chapter 11 Issues of Reporting, Disclosure, and...

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ch11 Page 1 Chapter 11 Issues of Reporting, Disclosure, and Financial Analysis TRUE/FALSE (CHAPTER 11) 1. Governments must combine their blended component units into both the fund and government-wide statements. 2. Governments must combine their discretely presented component units into both the fund and the government-wide statements. 3. A related organization is a contractual arrangement whereby two or more participants agree to carry out a common activity and share its risks and rewards. 4. A primary government can impose its will on a potential component unit if it has the authority to modify or approve the unit’s budget. 5. The comprehensive annual financial report (CAFR) is divided into three main sections: the table of contents section, the auditors’ report section, and the financial section. 6. The typical audit is designed to cover all information included in the CAFR. 7. There are only two government-wide statements: the statement of net assets and the statement of activities. 8. Required notes are an essential element of the basic financial statements. 9. Required supplementary information (RSI) is considered part of the basic financial statements. 10. Public colleges and universities must adhere to the same GASB pronouncements as other types of governments.
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ch11 Page 2 MULTIPLE CHOICE (CHAPTER 11) 1. The financial reporting entity is composed of a) The primary government. b) The primary government and all legally separate governments for which the primary government is financial accountable. c) The primary government and all legally separate organizations for which the primary government is financially accountable. d) The primary government, all legally separate organizations for which the primary government is financially accountable and any organizations whose omission would cause the primary governments financial statements to be misleading or incomplete. 2. Which of the following is NOT a primary government? a) A state government. b) A general purpose local government with the ability to determine its own budget. c) A general purpose local government whose tax levies must be approved by the state. d) A special purpose local government whose tax levies must be approved by the state. 3. Which of the following is necessary for a special purpose local government to be considered a primary government? a) It must operate for a single purpose. b) It must have a separately elected governing body. c) It must tax its citizens with ad valorem taxes. d) It must be fiscally dependent on another government. 4. Which of the following is necessary for a governmental entity to be considered fiscally independent? a) It must be able to hire its own management. b)
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ch11 - Chapter 11 Issues of Reporting, Disclosure, and...

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