In the Two-Worksheet Approach, What Type of Adjustment Will Be

question 11

Multiple Choice

In the two-worksheet approach, what type of adjustment will be necessary for interest expenditure/expense on the operating statement conversion worksheet?

• A) No adjustment is necessary for interest expenditure/expense. The amount of interest expenditure on the governmental fund financial statements is the same amount that will be reported as interest expense in the government-wide statements.
• B) Interest on long-term debt that has been incurred but not paid will need to be added to the interest expenditure reported on the governmental funds balance sheet.
• C) Interest paid this year that is attributable to the previous year accrual for long-term debt will need to be deducted from interest expenditure reported on the governmental funds balance sheet.
• D) An adjustment to the interest expenditure reported on the governmental funds operating statement will be necessary for the net change in accrued interest payable on long-term debt from the beginning of the year to the end of the year.

---

Definitions:

Supply Curve

A graph showing the relationship between the quantity of a good supplied and its price, typically upward sloping.

Movement

A change or development in a particular direction, often referred to in contexts ranging from physical relocation to shifts in opinions or trends.

Supply Curve

represents the relationship between the price of a good and the quantity of that good suppliers are willing to produce and sell, typically upward sloping because higher prices incentivize more production.

Shift

A change in demand or supply where the entire curve moves either right (increase) or left (decrease), signifying changes in market conditions.