Problem 17-1 Reporting under GASB Statement No. 34. Select the best answer to the following multiple-choice questions: 1. In the statement of activities, a. All expenses are subtracted from all revenues to get net income. b. It is possible to determine the net program expense (revenue) for major functions and programs of the primary government and its component units. c. Some tax revenues are considered program revenues, and others are considered general revenues. d. Extraordinary items are those that are either unusual in nature or infrequent in occurrence. 2. Which of the following is true regarding financial reporting under GASB Statement No. 34? a. A comparison of budget and actual revenues and expenditures for the general fund is required as part of the basic financial statements. b. Infrastructure must be recorded and depreciated as part of the statement of activities in the basic financial statements. c. Public colleges and universities are to report in exactly the same manner as private colleges and universities. d. Special purpose governments that have only business-types activities are permitted to report only the financial statements required for enterprise funds. 3. Which of the following is true regarding the government-wide financial statements? a. The government-wide financial statements include the statement of net assets and the statement of activities. b. The government-wide financial statements are to be prepared using the economic resources measurement focus and the accrual basis of accounting. c. The government-wide financial statements include information for governmental activities, business-types activities, the total primary government, and its component units. d. All for the above are true. 4. Which of the following is not part of the basic financial statements? a. Governmental funds statement of revenues, expenditures, and changes in fund balances b. Budgetary comparison schedules-general and special revenue funds c. Government-wide statement of activities d. Notes to the financial statements 5. Which of the following is not part of the basic financial statements? a. Government-wide statement of net assets b. Proprietary funds statement of revenues, expenses, and chages in fund net assets c. Combining balance sheet-nonmajor governmental funds d. Notes to the financial statements 6. Which of the following is true regarding the organization of the comprehensive annual financial report? a. The three major sections are introductory, financial, and statistical. b. The management's discussion and analysis is considered to be part of the introductory section. c. The auditor's report is considered to be part of the statistical section. d. Basic financial statements include the government-wide statements, the budgetary statement, and the notes to the financial statements. 7. Which of the following is true regarding the government-wide financial statements? a. The government-wide financial statements include the statementof net assets and the statement of activities. b. The government-wide financial statement are prepared on the financial resources measurement focus for governmental activities and the economic resources measurement focus for business-type activities. c. Prior-year data must be presented. d. Works of art, historical treasures, and similar assets must be capitalized. 8. Under GASB Statement No. 34, which of the following is true of infrastructure? a. Infrastructure must be recorded and depreciated unless a modified approach is used, in which case, depreciation is not required. b. Infractructure must be recorded and depreciated in all cases. c. Infractructure is not to be recorded and depreciated. d. The state and local governments have the option, but are not required, to record and depreciate infrastructure. 9. Which statement is true regarding the "major" funds? a. The general fund is always considered major. b. Other funds are considered major if both of the following conditions exist: (1) total assets, liabilities, revenues, or expenditures/expenses of that individual governmental or enterprise fund constitute 10% of the governmental or enterprise categories, and (2) total assets, liabilities, revenues, or expenditures/expenses are 5% of the total of the governmental and enterprise categories. c. A government may choose to reflect a fund as major even if it does not meet the criteria for major funds. d. All of the above are true. 10. Which of the following groups sets standards for audits of federal financial assistance recipients? a. U.S General Accounting Office b. U.S Office of Management and Budget c. Governmental Accounting Standards Board d. Financial Accounting Standards Board