Problem 4: True / false questions

1.Basic financial statements consist of government-wide financial statements, the fund financial statements, and the combining financial statements of nonmajor funds.

2.When a local government does not report its financial information in a CAFR, the GASB's minimum disclosure requirements for a government's general purpose external financial reports consist of an introductory section, government-wide financial statements, fund financial statements, and notes to the financial statements.

3.Pension trusts for police and firefighters are reported as blended component units of a primary government.

4.An example of a state's ability to impose its will on the operations of a legally separate toll road which is reported as an enterprise fund is its ability to approve the toll road's proposed increases in toll rates.

5.A primary government can be a component unit of another primary government.

6.When a component unit is an integral part of a primary government's financial reporting entity, the financial statements of the component unit should be "blended" with the financial statements of the primary government.

7.An important part of management's discussion and analysis is management's forecast and projections regarding what could occur in the future if certain current unknown, but plausible, events occur.

8.When preparing governmental fund financial statements for a city, the general fund is considered a major fund if one of the 10% and 5% line item tests is met.

9.Financial statements for fiduciary funds require major fiduciary funds to be reported in separate columns and all nonmajor fiduciary funds to be reported in the aggregate in one column.

10. The combining financial statements of nonmajor governmental funds disclose the detailed amounts that total to the aggregate amounts reported in the nonmajor fund column on the governmental funds financial statements.

11. Management's discussion and analysis is required supplementary information.