Which of the Following Statements Regarding Fund Accounting Is True

question 98

Multiple Choice

Which of the following statements regarding fund accounting is true?

• A) A typical town or county government has approximately the same number of funds as cities and states.
• B) Fund-basis statements are presented for three categories of activities: government-wide, proprietary, and fiduciary
• C) Each fund requires its own journal, but all funds post the information to a common general ledger.
• D) While a business will typically have a single general ledger, the activities of governments are broken down into accounting subunits called funds.

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Definitions:

Standard Cost

A predetermined cost of manufacturing a product or performing a service under normal conditions, used for budgeting and performance evaluation.

Direct Labour

The wages paid to workers who are directly involved in the manufacturing of products or providing services.

Standard Variable Overhead Rate

is a predetermined rate used to allocate variable overhead costs to each unit of production based on a particular activity, such as labor hours.

Ideal Standards

Standards that assume perfect operating conditions with no inefficiencies, waste, or delays, used for benchmarking or motivating improvement.