Question

Governmental fund statements are prepared using:

	A.	Economic resources measurement focus and modified accrual basis of accounting.
	B.	Current financial resources measurement focus and modified accrual basis of accounting.
	C.	Current financial resources measurement focus and accrual basis of accounting.
	D.	Economic resources measurement focus and accrual basis of accounting

Answer 1

ans-B

Explanation:

The financial statements of governmental fund include:

1.   Balance sheet( position statement):

Balance sheet = (Assets + deferred outflows of resources) = (liabilities + deferred inflows of resources) + (fund balance).

1. Statement of activities: Statement of revenues, expenditures and changes fund balances (statement   of activities). The order to present it can be described in the following manner:

Revenues

Expenditures

Excess (deficiency) of revenues over expenditures

Other financing sources and uses (including transfers)

Special items

Extraordinary items

Net change in total fund balance

Fund balance beginning of period

Fund balance end of period