Question

Which is true regarding FASB accounting and financial reporting for enterprise funds, as long as FASB standards do not conflict with GASB standards?

a. All FASB accounting principles prescribed for
business organizations must be followed.
b. FASB accounting principles prescribed for
business organizations on or before November
30, 1989, must be followed; FASB accounting
principles issued after that date may or may not be
followed, as long as a government applies those
accounting principles consistently.
c. FASB accounting principles may or may not be
followed, without any consideration of date.
d. FASB accounting principles may not be followed
in any case.

Answer 1

Enterprise funds must follow FASB accounting principles prescribed for business organizations before November 30, 1989, and may follow principles issued after that date if they do not conflict with GASB standards.

Step-by-step explanation:

The question asks which statement is true regarding the Financial Accounting Standards Board (FASB) accounting and financial reporting for enterprise funds, considering the relationship between FASB and the Governmental Accounting Standards Board (GASB) standards. The correct statement is that FASB accounting principles prescribed for business organizations on or before November 30, 1989, must be followed; FASB accounting principles issued after that date may or may not be followed, provided a government applies those accounting principles consistently. This means enterprise funds should apply all relevant FASB standards issued before November 30, 1989, but for FASB pronouncements after that date, they only need to comply with them if they do not conflict with GASB standards.