Problem 4: True / false questions

1.According to the GASB, there should not be more than 5 major governmental funds reported on the financial statements of governmental funds.

2.If a component unit is reported discretely, its financial statements are reported in a separate column next to the government-wide financial statements of the primary government.

3.If a blended component unit is reported as an enterprise fund, its financial statements will be reported in both the proprietary fund financial statements as well as in the business-type activities column on the government-wide financial statements of the primary government.

4.For an individual special revenue, debt service, capital projects, or permanent fund to be reported as a major fund, the individual fund must satisfy both the 10% and the 5% tests for at least one of the four line items specified by the GASB.

5.Similar to the letter of transmittal found in a CAFR, the auditor's opinion is addressed to the citizens residing in the government.

6.The certificate of achievement for excellence in financial reporting is reported in the financial section of a CAFR.

7.If a component unit is reported discretely, its fund financial statements are not reported along with the fund financial statements of the primary government.

8.The 10% and the 5% tests to determine major funds are referred to as "fiat measurements" that relieve professional accountants from having to make subjective decisions on whether individual funds are major or nonmajor.

9.The statistical section of a CAFR for a village government reports the expected population growth of the village over the next 10 years, increases in future property tax rates for the village over the next 5 years, and the need for additional funding for the village's single employer pension plans.

10.According to the GASB, infrastructure capital assets financed from expenditures made by governmental funds must be depreciated.