PROBLEMS Problem 17-1 (LO 1, 3) 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. the net program expense (revenue) for major functions and programs of the primary gov- ernment and its component units are presented before general revenues. c. tax revenues designed to benefit the whole government are considered program 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-type 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 position 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 activi- ties, business-type activities, the total primary government, and its component units. d. All of 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 position b. Proprietary funds statement of revenues, expenses, and changes in fund net position 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.