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:

Financial Instruments

Contracts that give rise to both a financial asset of one entity and a financial liability or equity instrument of another entity.

Discounted Note

A promissory note that is sold or issued for less than its face value and upon maturity pays out its full face value, effectively generating interest for the holder.

Nonsufficient Funds Checks

Nonsufficient funds checks are checks that cannot be processed because the check writer's account does not have enough money to cover the amount.