When a Governmental Entity Adopts a Basis of Accounting Other

question 60

Multiple Choice

When a governmental entity adopts a basis of accounting other than full accrual and a measurement focus that excludes long-lived assets and liabilities in its governmental fund types:

• A) It is in violation of the law.
• B) It is in violation of GAAP.
• C) It has reported in accordance with GAAP for governmental fund financial statements.
• D) It can better measure the results of operations.

---

Definitions:

Wool Suits

Garments made from wool fabric, typically worn for formal occasions or professional settings, prized for their durability and comfort.

Import Quota

A government-imposed limit on the quantity of a specific good that can be imported into a country, aimed at protecting domestic industries.

Tariff

A tax imposed on imported goods, often used to protect domestic industries from foreign competition and to raise government revenue.

Tax Revenue

The income that is gained by governments through taxation, which is used to fund public expenses.