Which of the Following Is True Regarding the Government-Wide Statement

question 53

Multiple Choice

Which of the following is true regarding the government-wide Statement of Activities?

• A) The government-wide Statement of Activities may reflect expenses either by function general government, public safety, etc. or by object or natural classification salaries, supplies, etc..
• B) The government-wide Statement of Activities reflects taxes as general revenues.
• C) The government-wide Statement of Activities is prepared using the modified accrual basis of accounting for governmental activities and using the accrual basis of accounting for business-type activities.
• D) Indirect program expenses may not be allocated to the other functional areas.

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Definitions:

Net Income

The earnings left for a company after paying off all its costs and tax obligations from its revenue.

Times Interest Earned Ratio

A financial metric used to determine a company's ability to meet its debt obligations by comparing its income before interest and taxes to its interest expenses.

Interest Expense

The cost incurred by an entity for borrowed funds over a period, reported on the income statement.

Income Before Taxes

The earnings of a company before taxes have been deducted.