The Financial Statements of Fiduciary Funds

question 36

Multiple Choice

The financial statements of fiduciary funds:

• A)include a Statement of Cash Flow.
• B)are prepared using the modified accrual method of accounting.
• C)do not include Fund Balances.
• D)do not require any additional disclosures in the Notes to the Financial Statements.

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Definitions:

Retired Bonds

Bonds that have been paid off or redeemed by the issuer before their maturity date.

Bond Sinking Fund

A separate fund established by an issuer of bonds to repay principal on the debt over time, ensuring the bond's eventual maturity is financially manageable.

Early Retirement

Opting to retire before the conventional retirement age, often with specific eligibility criteria.

Gain or Loss

Represents the difference between the sale price and the purchase price of an asset, where it is a gain if the sale price is higher and a loss if the purchase price is higher.