Question

True or False

1. Activities a local government can engage in are classified as governmental, business-type, or fiduciary.

2. Only those governmental and proprietary funds that meet the GASB size criteria for major funds are reported in separate columns of the governmental and proprietary fund financial statements.

3.Governmental funds account for assets but not the liabilities.

4. The types of funds that may be used in governmental accounting are classified into the three categories of governmental, proprietary, and fiduciary.

Answer 1

1. False - Activities a special purpose local government can engage in are classified as governmental, business-type, or fiduciary.

2. False - all governmental and proprietary funds are reported in separate columns of the governmental and proprietary fund financial statements.

3. False - Under the system of modified accrual basis of accounting, governmental funds account for current assets and liabilities but not long-term assets or liabilities.

4. True - Funds are classified as governmental, proprietary, and fiduciary.