Briefly describe the kinds of information that should be reported in the statistical section of the CAFR.

What measurement focus and basis of accounting should be used in reporting each of the three fund categories in fund financial statements?

What are the requirements for a fund to be classified as a major fund in the fund financial statements?

Discuss the difference between fund financial statements and government-wide financial statements, covering (a) the scope of the statements and (b) the measurement focus and basis of accounting used in each set of statements.

Which groups are the major external users of governmental financial reports?

The Building Authority was created by the city and organized as a separate legal entity. The authority is governed by a five-person board appointed for 6-year terms by the mayor, subject to city council approval. The authority uses the proceeds of its tax-exempt bonds only to finance the construction or acquisition of general capital assets and only for the city. The bonds are secured by the lease agreement with the city and will be retired through lease payments from the city. Is the Building Authority a component unit of the city? If so, how should the city report the financial activities of the Building Authority? (GASB Statement 14, par. 134)

Multiple Choice

1. Which of the following types of governments is always considered to be a primary government for financial reporting purposes?

• a. A school district with a separately elected governing body
• b. A state university whose board members are appointed by the governor without the approval of the state legislature
• c. A town
• d. A legally separate public authority or public benefit corporation

2. Which of the following is an example of a “benefit or burden” relationship for purposes of determining whether a primary government is financially accountable for another organization?

• a. Primary government is authorized to audit the other organization.
• b. Primary government is obligated in some manner for the other organization’s debt.
• c. Primary government is required to approve the other organization’s debt issuances.
• d. Primary government is authorized to remove members of the other organization’s governing board.

3. Which basis of accounting is used in preparing the budgetary comparison statement?

• a. The budgetary basis
• b. The accrual basis
• c. The modified accrual basis
• d. The cash receipts and disbursements basis

4. In fund financial statements, where are the revenues and expenditures (expenses) of governmental-type and proprietary-type funds reported?

• a. On different financial statements
• b. On the same financial statement
• c. On the same financial statement, provided all the funds are major funds
• d. On the same financial statement where fiduciary funds are reported

5. Fund financial statements have columns for which of the following?

• a. Major funds only, with separate columns for each fund
• b. All funds combined in a single column
• c. Each major fund plus a column for nonmajor funds combined
• d. All funds, with separate columns for each fund

6. Which of the following is an example of required supplementary information?

• a. Listing of revenues and expenditures for the current year and 9 previous years
• b. Statement of changes in fiduciary net assets for each nonmajor fiduciary fund
• c. Combining financial statement of Internal Service Funds
• d. Budgetary comparison schedule

7. Which of the following is part of the minimum requirements established by the GASB for general purpose external financial reports?

• a. An introductory section
• b. Management’s discussion and analysis
• c. A statistical section
• d. A schedule of cash receipts and disbursements for all funds

8. The process of blending is accomplished by reporting a component unit’s funds in which manner?

• a. In the notes to the primary government’s financial statements
• b. In a separate column to the left of the primary government’s funds
• c. As if they were fiduciary funds of the primary government
• d. As if they were the funds of the primary government

9. Which of the following situations would be defined as a special item?

• a. The amount of a revenue item or an expenditure item increased by at least 10 percent over the previous year.
• b. A significant transaction within the control of management is either unusual in nature or infrequent in occurrence.
• c. A significant event outside the control of management causes the expenses or expenditures of a fund to exceed its revenues.
• d. A vibrant economy causes an entity’s tax revenues to rise by an extraordinary amount over the budgetary estimate.

10. Which of the following must be included when an entity issues general purpose financial reports separately from a CAFR?

• a. Notes to the financial statements
• b. Combining financial statements of nonmajor funds
• c. Statistical section
• d. Combining statement of blended component units

11. In fund financial statements, where are the categories capital assets, less accumulated depreciation and long-term bonds payable likely to appear?

• a. The General Fund, but not an Enterprise Fund
• b. An Enterprise Fund, but not a Capital Projects Fund
• c. Both an Enterprise Fund and a Capital Projects Fund
• d. An Enterprise Fund and a Capital Projects Fund or a Debt Service Fund

Multiple choice

1. From the following, select the two conditions that together will cause an entity to be reported as a component unit of a primary government:

• a. The primary government’s director of finance serves as a member of the entity’s governing body.
• b. The primary government can appoint a voting majority of the entity’s governing body.
• c. The primary government is required by law to finance the entity’s deficits.
• d. The primary government is required by law to purchase its electricity from the entity, which also supplies electricity to the residents of the community. e. The primary government is authorized by law to bill the entity for the cost of police and fire protection.

2. What items are compared in a budgetary comparison schedule for the General Fund?

• a. Last year’s final budget; current year’s original budget; current year’s final budget
• b. Last year’s final budget; current year’s final budget; current year’s actual inflows and outflows on the budgetary basis of accounting
• c. Current year’s original budget; current year’s final budget; current year’s actual inflows and outflows on the modified accrual basis of accounting
• d. Current year’s original budget; current year’s final budget; current year’s actual inflows and outflows on the budgetary basis of accounting

3. Which of these items should be reported as “other financing uses” in a governmental funds statement of revenues, expenditures, and changes in fund balances?

• a. Transfers out
• b. Repayment of long-term debt principal
• c. Capital outlays
• d. Interest on long-term debt

4. Which of these items is normally reported as an “operating expense” in a proprietary fund statement of revenues, expenses, and changes in fund net position?

• a. Interest expense on long-term debt
• b. Transfers out
• c. Repayment of long-term debt principal
• d. Depreciation expense

5. In addition to the financial statements and notes, which two of the following items must be prepared to meet the minimum requirements for external financial reporting?

• a. Statistical data
• b. Management’s discussion and analysis
• c. Combining statements for nonmajor funds
• d. Required supplementary information
• e. Schedules showing object-of-expenditure data for major departments or programs

6. In fund financial statements, for which category/categories of funds is depreciation reported?

$$\begin{array}{lcc} &\text{Governmental}&\text{Proprietary}\\ \text{a.}&\text{No}&\text{Yes}\\ \text{b.}&\text{Yes}&\text{No}\\ \text{c.}&\text{Yes}&\text{Yes}\\ \text{d.}&\text{No}&\text{No}\\ \end{array}$$

7. For which of the following sets of funds is the modified accrual basis of accounting used for reporting in the fund financial statements?

• a. Special Revenue Funds and Pension Trust Funds
• b. Enterprise Funds and Internal Service Funds
• c. General Fund and Debt Service Funds
• d. All funds that meet the definition of major

8. How should the proceeds of debt be reported in a governmental fund’s statement of revenues, expenditures, and changes in fund balances?

• a. As a revenue
• b. As an “other financing source”
• c. As an extraordinary item
• d. As an addition to the fund balance at the beginning of the period

What is the budgetary equation? Briefly describe the components of each side of the equation.

Explain briefly how the contribution margin differs from the segment margin.

Briefly explain its connection to the Industrial Revolution. 9.Karl Marx

Consider the surfaces defined by the given equations.

Identify and briefly describe the surface.

Briefly explain the phenomenon of cooperativity exhibited by the hemoglobin molecule in binding oxygen.

Consider the surfaces defined by the following equations.

Identify and briefly describe the surface.