Question

Major adjustments required when converting from fund financial statements to government-wide financial statements include which of the following?

A. Eliminating construction expenditures in governmental funds and recording them as capital assets
B. Eliminating proceeds of bonds sold and recording the liabilities incurred
C. Making adjustments for expense accruals
D. All of the above are true
E. Only A and B are true

Answer 1

The correct answer is letter "C": Making adjustments for expense accruals.

Step-by-step explanation:

Government funds are balanced for transactions related to capital assets, long-term debt-related transactions, revenues, and expenditures are transferred to an accrual basis. Besides, internal service funds are added and internal fund operations are removed.