You Are Assessing the Financial Condition of a County

question 12

Multiple Choice

You are assessing the financial condition of a county.Its financial statements have captions for "transfers in" and "transfers out," both containing significant amounts.What consideration should you give to these transfers in assessing financial condition?

• A)do not consider them in your analysis,because transfers in will equal transfers out
• B)see if transfers in equal transfers out.Then,check the balance sheet to see if the captions "due to" and "due from" also are equal.If so,no further review is needed
• C)see if the transfers are recurring,rather than one-shots.If they are recurring,no further inquiry is needed
• D)only transfers in should be considered