Problem 4: Answer True or False for the following statements:

a. The statistical section of a CAFR for a village government reports the expected population growth of the village over the next 5 years, increases in future property tax rates for the village over the next 2 years, and the need for additional funding for the villages single employer pension plans.

b. In Illinois, counties, cities, and villages are primary governments.

c. Special purpose governments in Illinois cannot be primary governments.

d. When a primary government states that it has chosen to report a fund as a major fund, it means that the governing body of the primary government has chosen to report a governmental or enterprise fund as major even though all four line item tests were failed.

e. Reporting all major funds in separate columns and reporting all nonmajor funds in the aggregate in one column is based on the notion that reporting all funds in separate columns on the fund financial statements would cause users to be on the negative slope of their learning curves.

f. When a component unit is an integral part of a primary government's financial reporting entity, the financial statements of the component unit should be reported in a separate column on the government-wide financial statements of the primary government.

g. According to guidance provided by the Governmental Accounting Standards Board , a general purpose government is always a primary government.

h. If a component unit is reported discretely, its fund financial statements are not reported in the fund financial statements of the primary government.

i. The 10% and the 5% tests to determine major funds are referred to as fiat measurements which relieve CPAs from having to make subjective decisions on whether individual funds are major or nonmajor.

j. In the CAFR for the City of Rockford, the Metro Centre is reported as a component unit because the Centre is legally separate from the City of Rockford.