State and Local Governments
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CPA Financial Accounting and Reporting (FAR) › State and Local Governments
Which basis of accounting is required for a city's government wide financial statements?
Modified accrual
Accrual
Modified cash
Cash
Explanation
The government wide financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting.
ABC City uses an internal service fund for its central motor pool. The assets and liabilities account balances for this fund that are not eliminated normally should be reported in the government wide statement of net position as:
Fiduciary activities
Governmental activities
Business type activities
Note disclosures only
Explanation
For the purposes of government wide financial statements, internal service funds are normally reported in the governmental activities column of the government wide statement of net position and statement of activities since they are generally established to service the governmental funds.
Which of the following would be reported as program revenues on a local government's government wide statement of activities?
Taxes levied for a specific function
Proceeds from the sale of a capital asset used for a specific function
Charges for services
Interest revenues
Explanation
For a local government's government wide statement of activities, charges for services are reported as program revenue.
Taxes levied on citizens for infrastructure improvements should be reported in:
Functional revenues
None of the above
General revenues
Program revenues
Explanation
Program revenues would include charges for services and grants. Nonexchange revenues for governmental activities are general revenues.
The city of Carlton produces a comprehensive annual financial report which includes general purpose financial statements. Which of the following statements is true?
Government-wide financial statements must be included but fund-based financial statements are optional
Fund-based financial statements must be included but government-wide financial statements are optional
Either fund-based financial statements or government-wide financial statements must be included
Both fund-based financial statements or government-wide financial statements must be included
Explanation
The CAFR includes fund-base statements and government-wide statements.
Taxes levied on citizens for infrastructure improvements should be reported in:
Functional revenues
None of the above
General revenues
Program revenues
Explanation
Program revenues would include charges for services and grants. Nonexchange revenues for governmental activities are general revenues.
Which basis of accounting is required for a city's government wide financial statements?
Modified accrual
Accrual
Modified cash
Cash
Explanation
The government wide financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting.
Which of the following would be reported as program revenues on a local government's government wide statement of activities?
Taxes levied for a specific function
Proceeds from the sale of a capital asset used for a specific function
Charges for services
Interest revenues
Explanation
For a local government's government wide statement of activities, charges for services are reported as program revenue.
The city of Carlton produces a comprehensive annual financial report which includes general purpose financial statements. Which of the following statements is true?
Government-wide financial statements must be included but fund-based financial statements are optional
Fund-based financial statements must be included but government-wide financial statements are optional
Either fund-based financial statements or government-wide financial statements must be included
Both fund-based financial statements or government-wide financial statements must be included
Explanation
The CAFR includes fund-base statements and government-wide statements.
ABC City uses an internal service fund for its central motor pool. The assets and liabilities account balances for this fund that are not eliminated normally should be reported in the government wide statement of net position as:
Fiduciary activities
Governmental activities
Business type activities
Note disclosures only
Explanation
For the purposes of government wide financial statements, internal service funds are normally reported in the governmental activities column of the government wide statement of net position and statement of activities since they are generally established to service the governmental funds.