4. T, F. Arbitrage is a legal means that governments use in issuing low interest rate bonds and using the funds generated to invest in high-risk and high-interest generating investments. 5. Unlike other financing methods for capital projects, special assessments: Are subject to abuse b. Are not always advantageous to citizens Are indirect taxes to citizens d. All of the above e. Only b and c above 6. T, F. Most governments record pension costs on expenditure basis rather on economic basis that reflects the total cost of present and future requirements of Pension Fund. 7. LE. Government-wide financial statements should report all claims and judgments on an accrual basis. 8. T, F. Government-wide financial statements are reported on a modified or full accrual basis of accounting. 9. Other financing Sources refer to these items EXCEPT: Proceeds from long-term debt b. Proceeds from sale of property of government C. Levy on citizens Non-reciprocal transfers e. None of the above. 10. T, F. A capital lease is the equivalent of a purchase and borrowing transaction. 11. In government-wide statement of activities, program-specific activities are reported in: a. Charge for services b. Program-specific operating grants and contributions c. Program-specific capital grants d. All of the above e. Only b and above. 12. T, F. Because the modified accrual statements focus on expendable financial resources, revenues must be available to pay for liabilities before they can be recognized