Which Statement Is Incorrect with Respect to Proprietary Funds

question 55

Multiple Choice

Which statement is incorrect with respect to proprietary funds?

• A) The required financial statements of proprietary funds include a Statement of Net Position, a Statement of Revenues, Expenses, and Changes in Fund Net Position, and a Statement of Cash Flows.
• B) The net position i.e., fund equity) section of the Statement of Net Position is displayed within three categories: 1) Net Investment in Capital Assets, 2) Restricted, and 3) Unrestricted Net Position.
• C) The Statement of Cash Flows must be prepared using the direct method and includes cash flows from operating activities, investing activities, capital and related financing activities, and noncapital-related financing activities.
• D) Proprietary funds follow FASB rules and may follow GASB rules if not addressed by FASAB