Which of the Following Activities of a Government Should Be

question 66

Multiple Choice

Which of the following activities of a government should be accounted for in a fiduciary fund?

• A) Funds received from the federal government to support public transportation activities.
• B) Funds received from an individual who specified that the principal must be kept intact but the income can be used to support families of police officers killed in the line of duty.
• C) Funds received from the state government that must be used to purchase capital assets.
• D) Funds received from a contractor to assist with the development of utility infrastructure.

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Definitions:

Operating Activities Section

A part of a company's cash flow statement that shows the cash flow from its core business operations.

Direct Method

A method of computing the net cash provided by operating activities in which the income statement is reconstructed on a cash basis from top to bottom.

Indirect Method

A method of computing the net cash provided by operating activities that starts with net income and adjusts it to a cash basis. It is also known as the reconciliation method.

Inventory

Raw materials, work-in-process, and finished goods that a company holds with the intent to sell or use in production.