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Chapter 17--Financial Reporting Issues Key
1. The GASB Statement No. 34 reporting model includes, but is not limited to which of the following reports?
2. Required supplementary information includes all of the following except for:
3. Which of the following statements relating to the requirements for financial reporting is not true?
4. Which of the following could be considered a component unit of a primary government unit?
5. When operations of component units of government are blended with the primary government unit, they are
reported by
6. Which of the following were innovations in financial reporting introduced by GASB Statement No. 34?
7. The purpose of the Management Discussion and Analysis section is
8. Which of the following is/are reporting requirements in funds-based statements under GASB Statement
No.34?
9. Major funds are described as
10. GASB Statement No. 34 requires the reporting for internal service funds by
11. Which of the following is not a classification of the net asset accounts of a proprietary fund?
12. Under the requirements for a Statement of Cash Flow, what sections must be included in the statement?
1)
Operating cash flows
2)
Cash Flows from noncapital financing
3)
Capital and related financing cash flows
4)
Investing cash flows
13. GASB Statement No. 34 requirements for the reporting for general fixed assets include
14. Reciprocal interfund activities include all but which of the following?
15. Key characteristics of the statement of net assets include all of the following except:
16. Which of the following combination of items reported is included on the statement of activities?
Revenue
Direct Allocated specifically Program
expenses by indirect connected to general
program expenses programs fixed assets
17. GASB Statement No.34 requires the reporting for infrastructure assets. Special provisions for reporting
include
18. The most common difference between funds-based and government-wide financial statements is
19. Converting the governmental fund balance sheet to a government-wide statement of net assets requires
which of the following activities?
1)
Add general fixed assets, net of accumulated depreciation
2)
Add general long-term debt, using the effective interest method
3)
Eliminate the assets and liabilities of most internal service funds (those whose primary customer is the general government)
4)
Eliminate the fund balance and classify the net assets into invested in capital assets, restricted net assets, and unrestricted net assets
20. In order to convert the governmental fund statement of revenues, expenditures, and changes in fund
balances to a government wide statement of activities, which of the following activities is necessary?
1)
Eliminate capital outlay expenditures
2)
Reclassify revenues between program revenues and general revenues
3)
Record bad debt expenses
4)
Convert revenues from the economic flow of resources accrual basis to the current financial resources modified accrual basis
21. Which of the following is not a purpose of the financial audit that accompanies statements?
22. The Single Audit Act requires that a governmental unit have a single audit if they
23. Audit reports prepared under the Single Audit Act include which of the following?
24. Which of the following is not a category included in the statistical section of government’s audit report?
25. From the following information, prepare a statement of net assets for the city of Franklin as of June 30,
20X3:
Cash and Cash equivalents, Governmental
$ 500,000
Cash and Cash equivalents, Business Activities
300,000
Receivables, net, Governmental
280,000
Inventories, Business Activities
135,000
Capital Assets, net, Governmental
1,330,000
Capital Assets, net, Business Activities
750,000
Accounts Payable, Governmental
158,000
Accounts Payable, Business Activities
96,000
Noncurrent liabilities, Governmental
1,005,000
Noncurrent liabilities, Business Activities
585,000
Net Assets invested in Capital Assets (net of Debt)
Governmental
733,000
Business activities
465,000
Net Assets Restricted:
Governmental
132,000
Business Activities
93,000
Net Assets Unrestricted:
Governmental
82,000
Business Activities
(54,000)
City of Franklin
Statement of Net Assets
June 30, 20X3
26. The City of Terrytown reports the following information:
Government Activities:
General-Direct Expenses
$ 85,000
Police-Direct Expenses
115,000
Fire Safety-Direct Expenses
95,000
Public Works-Direct Expenses
185,000
Recreation-Direct Expenses
75,000
Library-Direct Expenses
140,000
Interest on Long term Debt-Direct
30,000
Police-Indirect Allocation
20,000
Fire Safety-Indirect Allocation
25,000
Public Works-Indirect Allocation
25,000
Recreation-Indirect Allocation
10,000
Library-Indirect Allocation
20,000
Charges for Police service
90,000
Charges for Fire Safety
50,000
Charges for Public Works
105,000
Charges for Recreation
45,000
Charges for Library
25,000
Operating Grants for Fire Safety
15,000
Capital Grants for Library
75,000
There are no business type activities for this city or other component units. Taxes raised for general revenues equal $200,000 and taxes raised for
debt service equal $25,000. Other general revenues were generated through fines, fees, and permits that total $100,000. The city also sold a plot of
land for a gain of $10,000. The beginning of the year net assets totaled $155,000.
Required:
Prepare a statement of activities schedule for the city.
27. GASB Statement No. 34 requires a separate set of financial statements for each of the three categories of
funds. Prepare an analysis of the basic types of fund categories, what the measurement focus is and the basis of
accounting, and which basic financial statements are needed.
28. Briefly discuss the minimum requirements of the Management Discussion and Analysis section in the
comprehensive annual financial report.
29. Governmental entities are required to present fund financial statements for the governmental funds based on
the modified accrual basis of accounting and government-wide financial statements where all funds, included
the governmental funds, are presented using the accrual basis of accounting. Explain the required
reconciliations and describe the major reconciling items.
