Governmental Fund Statements Are Prepared Using

question 69

Multiple Choice

Governmental fund statements are prepared using:

• A) Economic resources measurement focus and modified accrual basis of accounting.
• B) Current financial resources measurement focus and modified accrual basis of accounting.
• C) Economic resources measurement focus and accrual basis of accounting.
• D) Current financial resources measurement focus and accrual basis of accounting.

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Definitions:

Profitability Index

A calculation used to determine the relative profitability of an investment, computed by dividing the present value of future cash inflows by the initial investment cost.

Payback Technique

A method of evaluating investments by determining the length of time it will take to recoup the original investment amount.

NPV

Net Present Value, a calculation that discounts future cash flows to their present value to evaluate the profitability of an investment or project.

Resource Constraint

Limitations on the availability of resources such as time, money, and labor that can restrict project progress or business growth.