Chap002a - Chapter 02 - Principles of Accounting and...

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Unformatted text preview: Chapter 02 - Principles of Accounting and Financial Reporting for State and Local 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. 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 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. 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. FALSE 5. A fund is an accounting but not a fiscal entity. 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 7. The governmental funds category includes the General Fund, special revenue funds, debt service funds, capital projects funds, and internal service funds. 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....
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This note was uploaded on 02/20/2012 for the course ACCTG 471 taught by Professor Muthannette during the Fall '08 term at Pennsylvania State University, University Park.

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Chap002a - Chapter 02 - Principles of Accounting and...

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