Question

Which of the following is true regarding the preparation of government-wide statements? Multiple Choice Balances from...

Which of the following is true regarding the preparation of government-wide statements?

Multiple Choice

  • Balances from enterprise funds’ statements are entered in the business-type activities sections of the government-wide statements without adjustment.

  • Interfund activities and balances within governmental activities are eliminated.

  • Both of the choices are true.

  • Neither of the choices is true.

Homework Answers

Answer #1

The correct answer will be option (c) Both of the choices are true. It is because balances from the enterprise funds' statements are entered directly to the business-type activities sections of the government-wide statements without any adjustment. No adjustment is necessary because enterprise funds use the accrual basis. Worksheet entries eliminate transactions and balances between governmental funds.

The other options (a), (b) are not selected because both of them are individually correct and so option (c) is selected.

And (d) are not correct because both of them are true.

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