Which of the Following Statements Is True Regarding Governmental Fund

question 46

Multiple Choice

Which of the following statements is true regarding governmental fund financial statements?

• A) Governmental fund financial statements report a government's activities and financial position as a whole.
• B) Governmental fund financial statements should tell the amount spent this year on such services as public safety, education, health and sanitation, and the construction of a new road.
• C) Governmental fund financial statements utilize the accrual basis of accounting much like any for-profit entity.
• D) Governmental fund financial statements help to determine whether the government's overall financial position improved or deteriorated.
• E) Governmental fund financial statements report all assets and liabilities in a way comparable to business-type accounting.

---

Definitions:

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, resulting in net profit or loss.

Common-sized Balance Sheet

A balance sheet in which each line item is expressed as a percentage of total assets, facilitating comparison with other companies regardless of size.

Vertical Analysis

A method of financial statement analysis in which each line item is listed as a percentage of a base figure within the statement, allowing for easy comparison and analysis of different-sized companies.

Cost Of Goods Sold

Costs directly linked to the creation of products sold by a company, including expenses for materials, labor, and overhead.