Finance Test Questions with Answers
Chapter 2 Overview of Financial Reporting for State and Local Governments
True/False Questions
1. A Comprehensive Annual Financial Report (CAFR) would include an introductory section, management's discussion and analysis, basic financial statements, required supplementary information other than MD&A, combining and individual fund statements, narrative explanations, and statistical section.
Answer: True
2. The three major sections of a CAFR are the Introductory, Financial, and statistical sections.
Answer: True
3. The introductory and statistical sections of a CAFR are not audited.
Answer: True
4. State and local governments are required to prepare a CAFR.
Answer: False
5. Combining statements are required whenever a non-major column is used in one of the fund financial statements.
Answer: True
6. A complete CAFR includes combining financial statements to reflect major funds.
Answer: True
7. In addition to the government-wide statements, governments are required to prepare fund financial statements for governmental funds only.
Answer: False
8. In addition to the government-wide statements, governments are required to prepare fund financial statements for governmental, proprietary and fiduciary funds.
Answer: True
9. The General Fund is always considered to be a major fund when preparing fund basis financial statements.
Answer: True
10. With respect to fund basis financial statements, governmental funds are considered to be a major fund when total assets, liabilities, revenues and expenditures combined are at least 10% of the total for the governmental funds category.
Answer: False
11. With respect to fund basis financial statements, a government may only designate a fund to be a major fund if it meets the size thresholds established by GASB.
Answer: False
12. With respect to fund basis financial statements, a government may designate any fund to be a major fund if reporting
True/False Questions
1. A Comprehensive Annual Financial Report (CAFR) would include an introductory section, management's discussion and analysis, basic financial statements, required supplementary information other than MD&A, combining and individual fund statements, narrative explanations, and statistical section.
Answer: True
2. The three major sections of a CAFR are the Introductory, Financial, and statistical sections.
Answer: True
3. The introductory and statistical sections of a CAFR are not audited.
Answer: True
4. State and local governments are required to prepare a CAFR.
Answer: False
5. Combining statements are required whenever a non-major column is used in one of the fund financial statements.
Answer: True
6. A complete CAFR includes combining financial statements to reflect major funds.
Answer: True
7. In addition to the government-wide statements, governments are required to prepare fund financial statements for governmental funds only.
Answer: False
8. In addition to the government-wide statements, governments are required to prepare fund financial statements for governmental, proprietary and fiduciary funds.
Answer: True
9. The General Fund is always considered to be a major fund when preparing fund basis financial statements.
Answer: True
10. With respect to fund basis financial statements, governmental funds are considered to be a major fund when total assets, liabilities, revenues and expenditures combined are at least 10% of the total for the governmental funds category.
Answer: False
11. With respect to fund basis financial statements, a government may only designate a fund to be a major fund if it meets the size thresholds established by GASB.
Answer: False
12. With respect to fund basis financial statements, a government may designate any fund to be a major fund if reporting