Chap009 - Wilson and Kattelus, 13/e, Chapter 9 Chapter 9...

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Wilson and Kattelus, 13/e, Chapter 9 Chapter 9 Financial Reporting of State and Local Governments TESTBANK True/False 1. Service efforts and accomplishments (SEA) reporting helps citizens, elected officials, appointed officials, investors and creditors, and other interested parties evaluate the government's performance in the absence of a "bottom line" measure such as exists for for- profit entities. 2. State and local governmental units should prepare only those financial reports required by law —generally year-end financial statements. 3. Comprehensive annual financial reports of state and local governmental units should include (1) an introductory section, (2) a financial section, and (3) a supplemental section. 4. General purpose external financial statements of state and local governmental units should consist of auditor’s report, management’s discussion & analysis (MD&A), basic financial statements, notes to the financial statements, and, if there is more than one fund of a given type, combining statements for each such fund type. 5. Statistical tables included in comprehensive annual financial reports should include only financial data needed to support information given in the financial statements. 6. A component unit is dependent on the primary government when the primary government is obligated for its debt. 7. The accounting system used by a state or local government must make it possible to prepare financial statements as required by the Financial Accounting Standards Board. 8. Under GASBS 34, the financial statements that report on business-type activities at the government-wide level include the statement of net assets, statement of activities, and statement of cash flows. 9. GASBS 34 reporting requires combined financial statements as part of the general purpose external financial reports. 10. Fiduciary activities are not reported in the government-wide financial statements under GASBS 34. Page 1
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Wilson and Kattelus, 13/e, Chapter 9 Multiple Choice 11. The objective of financial reporting by state and local governments A) Is the same as the objectives of financial reporting by business enterprises. B) Is to assist governments to discharge their duty to be publicly accountable in a democratic society. C) Is defined in Statements of Governmental Accounting Concepts issued by the Financial Accounting Standards Board. D) Is to fulfill the government's statutory duty to report on cash received and cash disbursed. 12. A component unit is dependent on the primary government when the A) Primary government is entitled to its resources. B) Primary government is obligated to provide financial support. C) Primary government is obligated for its debt. D)
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Chap009 - Wilson and Kattelus, 13/e, Chapter 9 Chapter 9...

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