In Order to Convert the Governmental Fund Statement of Revenues

question 10

Multiple Choice

In order to convert the governmental fund statement of revenues, expenditures, and changes in fund balances to a government wide statement of activities, which of the following activities is necessary? 1)
Eliminate capital outlay expenditures
2)
Reclassify revenues between program revenues and general revenues
3)
Record bad debt expenses
4)
Convert from Economic flow of resource method of account to current financial resources modified accrual based accounting

• A) 1, 3, 4
• B) 1, 2, 3
• C) 1, 2, 3, 4
• D) 1, 2, 4

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Definitions:

Total Revenue

The entire amount of income received by a firm from selling its goods or services before any expenses are deducted.

Total Cost

The sum of fixed and variable costs incurred by a firm in producing and offering a product or service for sale.

Fixed Cost

Costs that do not change with the level of output or sales, such as rent, salaries, and insurance premiums.

Economic Profit

The difference between the total revenue earned by a business and the total costs (both explicit and implicit) of all resources used.