Which of the Following Is One of the Criteria to Determine

question 48

Multiple Choice

Which of the following is one of the criteria to determine if a governmental fund is considered to be a major fund?

• A) Total assets, liabilities, revenues or expenditures of the individual governmental fund constitutes 10 percent of the governmental funds category.
• B) Total assets, liabilities, revenues or expenditures/expenses are 5 percent of the total of the governmental and enterprise category. Other funds may be designated major funds at the discretion of management.
• C) Both A and B are required
• D) Either A or B will qualify a fund to be a major fund

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Definitions:

Capital Intensity Ratio

A measure of how much capital is used in production, often expressed as the ratio of total assets to sales revenue.

Full Capacity

The maximum level of production or output that a facility can achieve under normal operating conditions.

Operating Capacity

The maximum output a company can produce under normal working conditions.

Earnings Retention Ratio

The proportion of net income that a company retains to reinvest in its business rather than distributing it to shareholders as dividends.