Chapter 31 Flashcards
How should MD&A be classified for accounting and financial reporting purposes?
A. Part of the basic financial statements
B. Required supplementary information
C. Other supplementary information
B
Where should MD&A be located in a financial report?
A. Preceding the report of the independent auditor
B. Preceding the basic financial statements
C. Following the notes to the financial statements
B
Which of the following best describes the specific components identified for MD&A?
A. At a minimum the MD&A needs to address the required eight elements, if applicable to the government.
B. The maximum number of elements in the MD&A are the eight required by authoritative literature.
C. Both A and B
C
How many years of condensed comparative financial data should be included in MD&A if comparative financial statements are presented?
A. None
B. Two years
C. Three years
D. Four years
C
Which of the following statements best describes the proper use of graphs and charts to present condensed comparative financial data?
A. Graphs and charts can supplement the presentation of condensed comparative financial data in financial statement format
B. Graphs and charts can replace the presentation of condensed comparative financial data in financial statement format.
C. Both A and B
A
Which of the following statements would qualify as analysis?
A. Sales tax revenues decreased by 5 percent during the period.
B. Sales tax revenues decreased more sharply than revenues from fees and charges during the period.
C. Sales tax revenues decreased because of a substantial decline in motor vehicle sales at local car dealerships.
D. All of the above
C
What should be the focus of the analysis of balances and transactions in individual funds?
A. The general fund
B. Major governmental funds
C. Major enterprise funds
D. All of the above
D
What should be the focus of the analysis of budgetary variances?
A. The general fund
B. Major special revenue funds
C. All governmental funds
D. Both A and B
A
The analysis of budgetary variances should address:
A. Differences between the original budget and the final amended budget
B. Differences between the final amended budget and actual results
C. Both A and B
C
Which of the following might properly be addressed in MD&A?
A. The potential award of a major grant
B. Negotiations to attract a new employer
C. Plans to raise the local option sales tax
D. All of the above
E. None of the above
E
