Which Statement Below Is Incorrect with Respect to the Government-Wide

question 21

Multiple Choice

Which statement below is incorrect with respect to the Government-wide financial statements?

• A)All governmental fund categories must convert to the modified accrual basis of accounting.
• B)It is necessary to eliminate interfund balances within the governmental funds.
• C)Capital lease liabilities associated with governmental funds must be included on the Government-wide financial statements.
• D)All fixed assets and long-term debt for governmental funds must be included on the Government-wide financial statements.

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Definitions:

Tax Revenue

The income that the government receives from taxation of individuals and businesses.

Federal Government

The national government of a federal state, which holds sovereignty over broad aspects of governance, such as defense, foreign affairs, and monetary policy.

Payroll Taxes

Taxes imposed on employers and employees, based on the wages and salaries paid to workers, used to fund social security and healthcare services.

Negative Externality

A cost that affects a party who did not choose to incur that cost, often resulting from industrial activity, where the negative effects are felt by others, such as pollution.