Which of the Following Is True Regarding the Proprietary Fund

question 71

Multiple Choice

Which of the following is true regarding the proprietary fund financial statements?

• A) The Statement of Net Assets (or Balance Sheet) reflects equity as contributed equity and retained earnings.
• B) Normally, a reconciliation is required between the proprietary fund financial statements and the business-type activities column in the government-wide financial statements.
• C) Statements include the Statement of Net Assets, Statement of Revenues, Expenses, and Changes in Fund Net Assets, and Statement of Cash Flows.
• D) The Statement of Cash Flows may be prepared using either the direct or indirect methods.

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Definitions:

Sales

The total amount of goods or services sold by a company, a primary source of revenue for businesses.

Net Income

The profit of a company after all expenses, taxes, and deductions have been subtracted from total revenue.

Debt Ratio

A financial ratio that measures the proportion of a company's assets that are financed by debt.

Assets

Economic resources owned or controlled by an individual or entity that are expected to produce value or benefit in the future.