Solutions Manual_Ch2

Solutions Manual_Ch2 - 2.1. THE SOLUTION TO THIS AND THE...

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2.1. T HE SOLUTION TO THIS AND THE FIRST EXERCISE OF C HAPTERS 1 AND 3 THROUGH 9 WILL DIFFER FROM STUDENT TO STUDENT ASSUMING EACH HAS A DIFFERENT CAFR. 2-2. A. A FINANCIAL REPORTING ENTITY IS A PRIMARY GOVERNMENT , ORGANIZATIONS FOR WHICH THE PRIMARY GOVERNMENT IS FINANCIALLY ACCOUNTABLE , AND OTHER ORGANIZATIONS FOR WHICH THE NATURE AND SIGNIFICANCE OF THEIR RELATIONSHIP WITH THE PRIMARY GOVERNMENT ARE SUCH THAT EXCLUSION WOULD CAUSE THE REPORTING ENTITY ' S FINANCIAL STATEMENTS TO BE MISLEADING OR INCOMPLETE . B. A PRIMARY GOVERNMENT IS A STATE GOVERNMENT OR GENERAL PURPOSE LOCAL GOVERNMENT . A N EXAMPLE OF A PRIMARY GOVERNMENT WOULD BE ANY STATE , MUNICIPALITY , OR COUNTY ( GENERAL PURPOSE GOVERNMENTS ) AND ANY SPECIAL - PURPOSE LOCAL GOVERNMENT THAT MEETS THE CERTAIN CRITERIA . I N SOME STATES , SCHOOL DISRICTS ARE GENERALLY PRIMARY GOVERNMENTS AS THE GOVERNING BOARDS ARE INDEPENDENTLY ELECTED , LEVY THEIR OWN TAXES , AND ARE FINANCIALLY INDEPENDENT . C. A COMPONENT UNIT IS A LEGALLY SEPARATE ORGANIZATION FOR WHICH THE ELECTED OFFICIALS OF THE PRIMARY GOVERNMENT ARE FINANCIALLY ACCOUNTABLE . I N ADDITION , A COMPONENT UNIT CAN BE ANOTHER ORGANIZATION FOR WHICH THE NATURE AND SIGNIFICANCE OF ITS RELATIONSHIP WITH A PRIMARY GOVERNMENT ARE SUCH THAT EXCLUSION WOULD CAUSE THE REPORTING ENTITY ' S FINANCIAL STATEMENTS TO BE MISLEADING OR INCOMPLETE . A N EXAMPLE MIGHT BE A LIBRARY WITH A SEPARATE BOARD APPOINTED BY A CITY COUNCIL AND IN WHICH THE CITY COUNCIL MUST APPROVE ITS BUDGET AND MAKE UP ITS DEFICITS . D. T HE TWO PRIMARY METHODS FOR REPORTING COMPONENT UNITS IN THE FINANCIAL STATEMENTS OF A PRIMARY GOVERNMENT ARE BLENDING AND DISCRETE PRESENTATION . B LENDING REPORTS THE COMPONENT UNIT AS ONE OF THE FUNDS OF THE PRIMARY GOVERNMENT , WHICH THEN RESULTS IN INCLUDING THE COMPONENT UNIT AS PART OF THE BASIC FINANCIAL STATEMENTS . B LENDING IS USED ONLY WHEN COMPONENT UNITS ARE SUFFICIENTLY INTERTWINED WITH THE PRIMARY GOVERNMENT THAT THEY ARE , IN SUBSTANCE , THE SAME AS THE PRIMARY GOVERNMENT . D ISCRETE PRESENTATION INVOLVES REPORTING THE COMPONENT UNIT IN A COLUMN TO THE RIGHT OF THE PRIMARY GOVERNMENT IN THE GOVERNMENT - WIDE FINANCIAL STATEMENTS OF THE REPORTING ENTITY . 2-1
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2-3. A. T HE THREE MAJOR SECTIONS OF THE C OMPREHENSIVE A NNUAL F INANCIAL R EPORT ARE THE INTRODUCTORY , FINANCIAL , AND STATISTICAL SECTIONS . B. T HE G OVERNMENT -W IDE F INANCIAL S TATEMENTS ARE THE S TATEMENT OF N ET A SSETS AND THE S TATEMENT OF A CTIVITIES . G OVERNMENT -W IDE S TATEMENTS ARE PRESENTED USING THE ECONOMIC RESOURCES MEASUREMENT FOCUS AND THE ACCRUAL BASIS OF ACCOUNTING . C. T HE G OVERNMENTAL F UND S TATEMENTS ARE THE B ALANCE S HEET AND THE S TATEMENT OF R EVENUES , E XPENDITURES , AND C HANGES IN F UND B ALANCES . G OVERNMENTAL F UND S TATEMENTS ARE PRESENTED USING THE CURRENT FINANCIAL RESOURCES MEASUREMENT FOCUS AND MODIFIED ACCRUAL BASIS OF ACCOUNTING . D.
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This note was uploaded on 01/19/2012 for the course ACCT 2302 taught by Professor Smith,s during the Spring '09 term at HCCS.

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Solutions Manual_Ch2 - 2.1. THE SOLUTION TO THIS AND THE...

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