True False Questions

Chapter 02 Principles of Accounting and Financial Reporting for State and Local Governments

True / False Questions

• Governmental funds are further classified as governmental or business-type.

True False

• 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

• 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

Accounting for Governmental and Nonprofit Entities 16th Edition Reck Test Bank Visit TestBankDeal.com to get complete for all chapters

• 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

• 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

• Governmental funds account for assets but not the liabilities.

True False

• The types of funds that may be used in governmental accounting are classified

into the three categories of governmental, proprietary, and fiduciary.

True False

• The governmental funds category includes the General Fund, special revenue

funds, debt service funds, capital projects funds, and internal service funds.

True False

• 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

• All capital assets acquired by or used by a fund should be reported in the fund

balance sheet or statement of net position.

True False

• 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

• Governments must present three sets of fund financial statements.

True False

• When revenues are legally restricted by external resource providers or committed

by enabling legislation for particular operating purposes, a private purpose trust fund is created.

True False

• A debt service fund is used to account for financial resources segregated for the

purpose of making principal and interest payments on general long-term debt.

True False

• A deferred inflow is defined as “an acquisition of net assets by the government

that is applicable to a future reporting period.”

True False

• Expenditures are never recorded in governmental funds.

True False

Multiple Choice Questions