Determine whether each of the following statements is true or false, and explain why.

1. The government-wide financial statements, not the fund financial statements, will disclose the pension trust fund.

2. Permanent funds are disclosed as one of the governmental funds.

3. A police department requisitions $40,000 in equipment. The cost of the equipment received is $41,600. As required for fund financial statements, a $40,000 encumbrance is recorded at the time the order was placed. A $41,600 expenditure is recorded upon receipt of the equipment.

4. The government reports a biomass energy plant as an enterprise fund. At the end of the first year, the cost for clean-up after eventual project closure was estimated at $875,000. The current expenditure was 12%. At the end of the second year, and an expenditure of 20%, the estimate was revised upward to $960,000. Payments are not due for several years. An $87,000 expense should be reported on fund financial statements for the second year.