When a Government Enterprise Fund Has Restricted Assets on Its

question 39

Multiple Choice

When a government enterprise fund has restricted assets on its statement of net position, which of the following is a true statement?

• A) The total of the restricted assets in the asset section will be equal to the "restricted net position" amount in the equity section.
• B) The total of the restricted assets will be offset by a liability of an equal amount.
• C) The total of the restricted assets less related liabilities will be equal to the "restricted net assets" amount in the equity section.
• D) None of the above statements is true.

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Definitions:

Unearned Revenue

Funds paid to a person or corporation for goods or services that are to be provided or delivered in the future.

Patent

A legal document granted by the government giving an inventor exclusive rights to make, use, and sell an invention for a certain number of years.

Office Supplies

Items used in an office on a regular basis, such as paper, pens, and envelopes, which are consumed in use and need regular replenishment.

Temporary Accounts

Accounts used to record transactions within a specific accounting period, which are then closed and transferred to permanent accounts at the end of the period to prepare the company's financial statements.