Question

As used by GASB, interperiod equity refers to which of the following? Financial reporting should:

Select one:

a. Revenues are not necessarily indicative of demand for goods or services.

b. Provide information to determine whether current-year revenues were sufficient to pay for current-year services.

c. Demonstrate compliance with finance-related contractual requirements.

d. Provide information to assist users in assessing the government’s economy, efficiency, and effectiveness.

e. Demonstrate whether resources were obtained and used in accordance with the entity’s legally adopted budget.

Answer 1

Option B. Provide information to determine whether current-year revenues were sufficient to pay for current-year services is the answer.

Explanation:

For users of financial statements, the concept of interperiod equity is particularly important because it addresses the implications of fiscal decisions a government makes today but that may be felt well into the future.

It is Described as the state at which current-year taxpayers have provided adequate resources to pay for the cost of current-year services.