Question

Which of the following types of adjustments to the government fund financial statements are necessary to prepare the governmental activities portion of the government-wide financial statements?

A)Capital assets and related depreciation must be recorded

B) Proceeds from issuing long-term debt must be recorded as liabilities

C) Expenses must be recognized when incurred so noncurrent liabilities from current transactions and events must be reported

D) Revenues must be recognized on the accrual basis of accounting so the governmental fund “measurable and available” rule is discarded

E) All of the above

Answer 1

The adjustments to the government fund financial statements to prepare the governmental activities portion are:

Capital assets and depreciation related to these assets must be recorded

Proceeds from issuing long-term debt are recorded as liabilities

Expenses must be recognized when incurred so noncurrent liabilities from current transactions and events must be reporte

Revenues must be recognized on the accrual basis of accounting so the governmental fund “measurable and available” rule is discarded

Option E All of the above is correct option