Question

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

A. Program revenues include charges for services, operating grants and contracts, capital grants and contracts, and taxes levied for specific purposes.
B. The accrual basis of accounting is used to calculate revenues and expenses.
C. Both of the above.
D. Neither of the above.

Answer 1

The correct answer is A. Program revenues include charges for services, operating grants and contracts, capital grants and contracts, and taxes levied for specific purposes.

Step-by-step explanation:

The correct answer is A. Program revenues include charges for services, operating grants and contracts, capital grants and contracts, and taxes levied for specific purposes.

The government-wide Statement of Activities provides a comprehensive view of the government's financial activities, including its revenues and expenses. Program revenues are generated by specific programs or services provided by the government, such as charges for services, operating grants and contracts, capital grants and contracts, and taxes levied for specific purposes.

The accrual basis of accounting is used to calculate revenues and expenses in the government-wide Statement of Activities, making statement more accurate and reflecting the economic reality of the government's financial transactions.