FAR 17 Flashcards
Which of the following is a required financial statement for an investment trust fund?
Investment trust funds are one of the fiduciary fund types for state and local governments. Two financial statements are required for fiduciary funds—a statement of fiduciary net position and a statement of changes in fiduciary net position. (The statement of changes in fiduciary net position is not required for agency funds.)
Which of the following accounts should Moon City close at the end of its fiscal year?
Expenditures. Balance sheet items are not closed out at the end of the year.
In the government-wide financial statements, what is the correct revenue classification of fines and forfeitures?
Charges for services
Business combinations accounted for as an acquisition should treat expenses related to the combination as follows:
Out-of-pocket costs such as fees of finders and consultants are expensed.
Issuance costs such as SEC filing fees are charged to the paid-in-capital account.
Do major fund reporting requirements apply to internal service funds?
No.
What is the appropriate treatment for goods held on consignment?
Goods out on consignment have not been sold and should be included in the inventory of the consignor (owner).
Treasury stock is considered issued but not?
Outstanding.
Proprietary funds (including enterprise funds and internal service funds) are reported using the?
Economic resources measurement focus and the accrual basis of accounting.
Fund equity (fund net position) is reported in three categories:
net investment in capital assets, restricted, and unrestricted.
Do both U.S. GAAP and IFRS allow a separate statement of comprehensive income or a combined statement?
Yes.
Marta City’s school district is a legally separate entity, but two of its seven board members are also city council members and the district is financially dependent upon the city. The school district’s financial activity should be reported in the city’s financial statements by:
discrete presentation
What measurement focus does governmental funds use?
All of the other listed funds are governmental funds that use the current financial resources measurement focus and the modified accrual basis of accounting.
A transaction is considered to have commercial substance if
future cash flows will change as a result of the transaction
Equipment used in research and development activities that has alternative future uses is
Capitalized and depreciated over it’s useful life.
Which of the following is the paramount objective of financial reporting by state and local governments?
Accountability.
