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All of the following statements regarding notes to the basic financial statements of governmental entities are true except:

A. They provide additional information.
B. They enhance the understanding of financial statements.
C. They are required by law.
D. They may include details on significant accounting policies.

User Batwad
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Final answer:

One statement about notes to governmental financial statements that is not necessarily true is that they are required by law, as the requirement can vary by jurisdiction.

Step-by-step explanation:

The question revolves around identifying which statement about notes to basic financial statements of governmental entities is not true.

The except here points to a statement that doesn't align with the established understanding of these notes. Let's address the options provided:

  • Notes provide additional information - This is true as notes are used to give more context to the figures in the financial statements.
  • They enhance the understanding of financial statements - Also true, they help users better comprehend the financial position and operations of the governmental entity.
  • They may include details on significant accounting policies - This is correct; notes often include explanations of the accounting principles and policies applied in the financial statements.

The one statement that is not necessarily true is that these notes are required by law.

While governmental accounting standards typically require notes to accompany the financial statements for clarity and completeness, whether they are legally required can vary by jurisdiction and might not be a legal mandate.

User Allenph
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