Question

Combining financial statements for nonmajor funds of a government should be included:

A. In the basic financial statements.
B. In the notes to the financial statements.
C. As a part of the financial section of the CAFR.
D. As part of the statistical section of the CAFR.

Answer 1

Combining statements for nonmajor government funds should be included as part of the financial section of the CAFR, offering detailed information while keeping the main financial statements focused on major funds.

Step-by-step explanation:

The question relates to the preparation and reporting of government financial statements, a topic covered under governmental accounting practices. In the context of government financial accounting, the nonmajor funds should be presented as part of the combining statements that supplement the basic financial statements. Hence, the appropriate location for combining financial statements for nonmajor funds of a government is:

C. As a part of the financial section of the Comprehensive Annual Financial Report (CAFR).

This approach allows users to get detailed information about individual nonmajor funds without cluttering the main financial statements, which typically focus on major funds due to their higher level of significance.