When a Governmental Enterprise Fund Has Restricted Assets on Its

question 25

Multiple Choice

When a governmental enterprise fund has restricted assets on its balance sheet, 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 Assets" 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:

Balance Sheet

A financial report that captures a company's financial status at a particular moment, detailing its assets, liabilities, and shareholders' equity.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) that guide the preparation and presentation of financial statements on a global scale.

GAAP Format

The presentation of financial statements in accordance with Generally Accepted Accounting Principles, ensuring consistency and comparability.

Fair Value

The estimated price at which an asset could be bought or sold in a current transaction between willing parties, other than in a liquidation sale.