Which of the Following Statements Is False

question 58

Multiple Choice

Which of the following statements is false?

• A) Debt service funds are required to report accrued interest payable as current liabilities.
• B) All of the governmental funds use the modified accrual basis of accounting
• C) General fixed assets that are acquired with governmental fund resources are recorded as expenditures in the governmental funds but are displayed as capital assets in the governmental-wide financial statements
• D) Permanent funds reflect resources that are legally restricted so that principal may not be expended and earnings are used to benefit the government or its citizenry

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Definitions:

Operating Activities

The day-to-day activities of a company involved in producing and selling its products or providing services, which generate most of the company's cashflows.

Indirect Method

A technique used in cash flow statements to adjust net income for non-cash transactions, depreciation, and changes in working capital.

Depreciation Expense

The portion of an asset's initial cost allocated over a specific period as an expense, reflecting its usage and deterioration.

Operating Activities

Activities that relate directly to the business's primary operations, like selling products or services, as opposed to investment or financing activities.