Problem 3: Answer each of the following questions true or false.

a. When a blended component unit is a fiduciary fund, its financial statements are reported in both the government-wide and fund financial statements.

b. When a local government does not report its financial information in a CAFR, the Governmental Accounting Standards Board requires a local government, at a minimum, to report managements discussion and analysis, its basic financial statements, and required supplementary information other than MD&A.

c. A primary government cannot be a component unit of another primary government.

d. An important part of managements discussion and analysis for CAFRs issued for 2022 will be to discuss the economic effects on the primary government in 2023 from an economic recession that is expected to happen.

e. When preparing governmental fund financial statements for a city, the general fund has to meet one of the 10% and 5% line item tests for it to be reported as a major fund.

f. Financial statements for internal service funds require major internal service funds to be reported in separate columns and all nonmajor internal service funds to be reported in the aggregate in one column.

g. The combining financial statements of nonmajor governmental funds disclose the detailed amounts that total to the aggregate amounts reported in the nonmajor fund column on the governmental funds financial statements.

h. According to the Governmental Accounting Standards Board, there should not be less than 3 and no more than 5 major governmental funds reported on the financial statements of governmental funds.

i. If a blended component unit is reported as a governmental fund, its financial statements will be reported in both the governmental fund financial statements as well as in the governmental activities column on the government-wide financial statements of the primary government.