In Addition to the Government-Wide Statements, Governments Are Required to Prepare

question 2

True/False

In addition to the government-wide statements, governments are required to prepare fund financial statements for governmental, proprietary and fiduciary funds.

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Definitions:

Pretax Income

The amount of income earned by an individual or corporation before taxes are deducted.

Benefits Principle

A taxation principle that states those who benefit from government services should pay in proportion to the amount they benefit.

Taxation

The system through which governments impose financial charges on citizens or corporates to fund public spending.

Tax Incidence

The study of the effect of a particular tax on the distribution of economic welfare, focusing on who ultimately pays the tax (the burden of the tax).