Which of the Following Is True Regarding the Reporting of Major

question 2

Multiple Choice

Which of the following is true regarding the reporting of major funds in the governmental funds financial statements?

• A) The General Fund is always considered a major fund.
• B) A fund is considered major if its revenues, expenditures, assets, or liabilities exceed 10% of the total governmental fund categories and if the same element (revenues, expenditures, assets, or liabilities) exceeds 5% of the governmental and enterprise funds combined.
• C) Both of the above.
• D) Neither of the above.

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Definitions:

Current Ratio

The current ratio is a liquidity ratio that measures a company's ability to cover its short-term liabilities with its short-term assets.

Short-Term Debt

Borrowings that are due for repayment within one year, used to finance immediate expenses or working capital requirements.

Common-Sized Income Statement

A financial statement in which all items are expressed as a percentage of sales, facilitating comparison with other periods or companies.

Total Assets

The sum of all assets owned by a company, including both current and non-current assets.