If State Law Requires That Local Governments Prepare General Fund

question 79

Multiple Choice

If state law requires that local governments prepare General Fund and special revenue fund budgets on a basis that differs from the basis of accounting required by GAAP, then the budgetary comparison schedule or statements should

• A) Not be included as part of the basic financial statements.
• B) Be included with the actual figures presented on the budget basis and then reconciled to the GAAP basis.
• C) Be included with budget figures and actual figures adjusted to the GAAP basis.
• D) Be included as part of management's discussion and analysis (MD&A).

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Definitions:

Paradox Of Thrift

The economic theory that suggests individual savings can lead to a decrease in aggregate demand, thus hindering economic growth.

Thrifty

Showing care and consideration in managing resources and finances to avoid waste.

Deficit Reduction Legislation

Laws enacted to reduce the size of the budget deficit by increasing revenue or decreasing government spending.

Excise Tax

A tax levied on certain goods, services, or transactions, often with the aim of reducing consumption of the taxed items.