Question

For items 1 through 4, select from the first column option list provided the answer for each item that reflects how fund information is reported in the government-wide and fund financial statements. Each choice may be used once, more than once, or not at all.

In items 5 through 8, select from the second column option list provided the answer that indicates whether fund information about long-term liabilities and capital assets is reported in the government-wide and fund financial statements. Each financial statement component is reported in each fund.
Item
Information in governmental funds
Information in proprietary funds
Information in fiduciary funds
Government-wide financial statements:
1. Basis of accounting Accrual Accrual Modified cash
2. Measurement focus Current financial resources
Fund financial statements:
3. Basis of accounting Accrual
4. Measurement focus Current financial resources
Government-wide financial statements:
5. Long-term liabilities Yes
6. Capital assets Yes
Fund financial statements:
7. Long-term liabilities Yes
8. Capital assets

Answer 1

In government-wide financial statements, the basis of accounting is accrual and the measurement focus is current financial resources. In fund financial statements, the basis of accounting is accrual and the measurement focus is current financial resources. Long-term liabilities and capital assets information is reported in both the government-wide and fund financial statements.

Step-by-step explanation:

1. Government-wide financial statements: The basis of accounting is Accrual and Measurement focuses is Current financial resources.

2. Government-wide financial statements: The basis of accounting is Accrual and Measurement focuses is Current financial resources.

3. Fund financial statements: Basis of accounting is Accrual.

4. Fund financial statements: The measurement focus is Current financial resources.

5. Long-term liabilities information is reported in the Yes in the Government-wide financial statements.

6. Capital assets information is reported in the Yes in the Government-wide financial statements.

7. Long-term liabilities information is reported in the Yes in the Fund financial statements.

8. Capital assets information is reported in the Yes in the Fund financial statements.

Answer 2

1. Accrual

2. Modified Cash

3. Accrual

4. Current Financial resources

5. Yes

6. Yes

7. Yes

8. No

Step-by-step explanation:

Accrual basis of accounting is a technique in accounting where expenses and revenue are recorded when they are incurred instead of when they are paid. The basis of accounting is accrual concept which compensates the matching concept. Measurement focus is based in current available financial resources and modified cash basis.