L Governments that are subject to legal reporting requirements that differ from GAAP: A. are required to maintain their accounts on a GAAP basis. B. C. are required to maintain their accounts on the basis of accounting consistent with the legal reporting basis. must design their accounting system to permit reporting in accordance with both GAAP and legal requirements, but need not maintain two sets of accounts. D. must maintain two sets of accounts-one on the legal basis and one on the GAAP basis. Submit Answers A judgment was awarded this year against a government associated with a general government related lawsuit. The judgment was for a total of $1 million. It is expected that nothing will be paid until at least two years from the balance sheet date. What amount of governmental fund expenditures should be reported this year as a result of the judgment? O O O A. SO B. $1,000,000 C. $500,000 D. $750,000 Submit Answers A government has an outstanding 20-year serial bond issue that requires repayment of $1 million of principal and payment of $400,000 of interest on the last day of its current fiscal year. What is the effect of the principal and interest payments on the fund balance of which governmental fund during the year? A. Reduces fund balance of the debt service fund by $1.4 million O B. Reduces fund balance of the debt service fund by $400,000 0 C. Reduces fund balance of the general fund by $1 million 0 D. Reduces fund balance of the general fund by $400,000 Submit Answer What is the single most significant difference between notes to the financial statements and narrative explanations? A. B. C. Narrative explanations are used to present both narrative and quantitative information, but notes to the financial statements are used only to present quantitative information. Notes are used to present both narrative and quantitative information, but narrative explanations can be used only to present narrative rather than quantitative information. Notes are used to present quantitative data, and narrative explanations are used to present Information that does not lend itself to quantification. Notes to the financial statements are associated with the basic financial statements, and D. narrative explanations are associated with the other combining or individual fund financial statements included in a CAFR. Submit Arawers