Which Statement Is False Regarding the Balance Sheet for Fund-Based

question 43

Multiple Choice

Which statement is false regarding the Balance Sheet for Fund-Based Statements?

• A) The Balance Sheet for Fund-Based Statements measures only current financial resources of the governmental entity.
• B) The Balance Sheet for Fund-Based Statements uses the modified accrual method for timing purposes.
• C) Capital assets are not reported on the Balance Sheet for Fund-Based Statements.
• D) The Balance Sheet for Fund-Based Statements measures only long-term financial resources of the governmental entity.
• E) Long-term debts are not reported on the Balance Sheet for Fund-Based Statements.

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Definitions:

Annually Compounded

The process where interest is calculated on both the initial principal and the accumulated interest over the year.

Fair Market Value

A price established by competitive bidding among many buyers and sellers.

Compounded Monthly

Refers to the calculation of interest where the amount earned or paid is added to the principal balance each month, causing future interest calculations to be based on the increased balance.

Perpetuity

A type of annuity that receives an infinite series of identical cash flows.