When the Proceeds of General Long-Term Debt Are Received by a Governmental

question 34

True/False

When the proceeds of general long-term debt are received by a governmental fund, rather than reporting a liability on the balance sheet, the inflow of resources is treated as an other financing source on the operating statement.

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Definitions:

Ledger

A compilation or record of financial transactions kept in a book or collection of accounts.

Financial Statements

Formal records of the financial activities and position of a business, individual, or other entity, including the balance sheet, income statement, and cash flow statement.

Chart of Accounts

A systematic listing of all accounts used in the accounting system of a company, categorizing all financial transactions.

Net Income

Represents the total earnings of a company after all expenses and taxes have been deducted from revenue.