With Respect to the Preparation of Fund Basis Financial Statements

question 55

Multiple Choice

With respect to the preparation of fund basis financial statements, governmental funds other than the General Fund are considered to be major when which of the following conditions exist?

• A) With respect to fund basis financial statements, governmental funds are considered to be a major fund when total assets, liabilities, revenues, or expenditures of that individual governmental fund constitutes 10% of the total for the governmental fund category.
• B) With respect to fund basis financial statements, governmental funds are considered to be a major fund when total assets, liabilities, revenues, or expenditures of that individual governmental or enterprise fund are 5% of the total of the governmental and enterprise categories, combined.
• C) Both A and B are required for a governmental fund to be a major fund.
• D) Either A or B would fulfill the requirements.

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Definitions:

Peak Efficiency

The state of operating at maximum productivity with the least waste of resources.

Dollar-based Cost Drivers

Factors that cause a change in the cost of an activity, measured in monetary terms, such as labor hours, machine hours, or raw material quantities.

Cost Allocation Process

The method by which overhead or indirect costs are systematically assigned to various cost objects like products, services, or departments.

Accounting System

A systematic process of recording, summarizing, and reporting the financial transactions of a business or organization.