When a Component Unit Is Blended into the Financial Statements

question 36

True/False

When a component unit is blended into the financial statements of a primary government, the resulting fund financial statements will include two general funds.

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Definitions:

Capital Expenditures

Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment.

Free Cash Flow

The cash that a business produces after deducting cash outflows needed for operational activities and the upkeep of its fixed assets.

Cash Dividends

Distributions of earnings paid to shareholders in the form of cash.

Free Cash Flow

The amount of cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.