Chap002 - Chapter 02 - Principles of Accounting and...

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Chapter 02 - Principles of Accounting and Financial Reporting for State and Local Chapter 02 Principles of Accounting and Financial Reporting for State and Local True / False Questions 1. Governmental funds are identical to governmental activities, proprietary funds are identical to business-type activities, and fiduciary funds are identical to fiduciary activities of a government. True False 2. An objective of the accounting system for a state or a local government is to make it possible both to present fairly the funds and activities of the government in conformity with generally accepted accounting principles and to demonstrate compliance with finance-related legal and contractual provisions. True False 3. Individual fund financial information is reported in separate columns of governmental and proprietary fund financial statements for only those funds that meet the GASB size-related criteria as major funds. True False 4. Economic resources are cash or items expected to be converted into cash during the current period, or soon enough thereafter to pay current period liabilities. True False 5. A fund is an accounting but not a fiscal entity. True False 6. The types of funds that may be used in governmental accounting are classified into the three categories of governmental, proprietary, and fiduciary. True False 2-1
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Chapter 02 - Principles of Accounting and Financial Reporting for State and Local 7. The governmental funds category includes the General Fund, special revenue funds, debt service funds, capital projects funds, and internal service funds. True False 8. Governments can, in part, demonstrate operational accountability by reporting proprietary and fiduciary fund financial information, as well as all government-wide financial information, using an economic resources measurement focus and the accrual basis of accounting. True False 9. All capital assets acquired by or used by a fund should be reported in the fund balance sheet or statement of net assets. True False 10. Because budgetary accounts are used by governments, their financial statements can never be said to be in accord with generally accepted accounting principles. True False Multiple Choice Questions 11. The accounting system used by a state or local government must make it possible A. To present fairly the financial position and results of financial operations of the government as a whole, as well as fund financial activity in conformity with GAAP, and to demonstrate compliance with finance-related legal and contractual provisions. B. To prepare financial statements as required by the Financial Accounting Standards Board. C. To prepare consolidated accrual basis statements for the government as a whole. D. To provide Web-based bond offering statements to investment firms.
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Chap002 - Chapter 02 - Principles of Accounting and...

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