Chapter 2 Overview of Financial Reporting for State and Local

1. Which of the following is true regarding the proprietary fund
financial statements?
A) The Statement of Net Assets (or Balance Sheet)
reflects equity as contributed equity and retained earnings.
B) Normally, a reconciliation is required
between the proprietary fund financial statements and the business-type
activities column in the government-wide financial statements.
C) Statements include the Statement of Net
Assets, Statement of Revenues, Expenses, and Changes in Fund Net Assets, and
Statement of Cash Flows.
D) The Statement of Cash Flows may be prepared
using either the direct or indirect methods.

2. Which of the following is true regarding the fiduciary fund financial
statements?
A) Fiduciary fund financial statements include
the Statement of Fiduciary Net Assets and Statement of Changes in Fiduciary Net
Assets.
B) Fiduciary fund financial statements are
prepared using the current financial resources measurement focus and modified
accrual basis of accounting.
C) Fiduciary fund financial statements reflect
equity as reserved and unreserved.
D) Agency funds are reported only on the
Statement of Changes in Fiduciary Net Assets.

3.
Which of the following is notconsidered Required
Supplementary Information (RSI)?
A) Management’s Discussion and Analysis.
B) Budgetary Comparison Schedule.
C) Notes to the financial statements.
D) None of the above; all are considered RSI.

4.
Which of the following is
considered Required Supplementary Information (RSI)?
A) Management’s Discussion and Analysis.
B) Budgetary Comparison Schedule.
C) Schedule of Risk Management Activities.
D) All of the above are considered RSI.

5.
Governmental-type funds label the excess of
assets over liabilities on the balance sheet as:
A)
Net Assets
B)
Net Fund Balance and
Liabilities
C)
Fund Balance
D)
Assets Net of Liabilities

6.
In addition to the
government-wide statements, governments are required to prepare fund financial statements
for which of the following category of funds?
A)
Proprietary funds
B)
Governmental type funds
C)
Fiduciary funds
D)
All of the above

7. Which of the following is true regarding the Comprehensive Annual
Financial Report (CAFR)?
A) The CAFR has three main sections:
introductory, financial, and statistical.
B) Required Supplementary Information includes a
Budgetary Comparison Schedule for the General Fund and all major special
revenue funds that have a legally adopted annual budget (unless a statement is
prepared).
C) Both of the above.
D) Neither of the above.