a. Explanation Based on the preliminary review of the given balance sheet and statement of activities, it can be said that Ms. R who is familiar with non-for profit accounting, has no knowledge of government accounting. The given statements do not obey the rules of generally accepted accounting principles (GAAP). This is because of the following reasons: The given statements do not present the government wide and government fund financial statements separately. The government wide activities should be separated into business type activities and governmental activities as the government has both governmental fund and the enterprise fund. Fund financial statement should provide separate columns for major or non-major fund activities and general fund activities. In Government-wide financial statements, statement of net position should be prepared instead of balance sheet. Also, the term net assets should not be used instead, net position should be used. Additionally, the net position should classify as net position-restricted and net position–net investment in capital assets... b. To determine Write the concerns about the given financial statements as a member of the town council or a citizen.

Accounting for Governmental & Nonprofit Entities

17th Edition

ISBN: 9780078025822

Author: Jacqueline L. Reck James E. Rooks Distinguished Professor, Suzanne Lowensohn, Earl R Wilson

Publisher: McGraw-Hill Education

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Question

Chapter 2, Problem 11C

To determine

Write the concerns about the given financial statement, based on the preliminary review. Identify with the reasons, whether the given statements appear to obey the rules of generally accepted accounting principles (GAAP).

To determine

Write the concerns about the given financial statements as a member of the town council or a citizen.

Expert Solution & Answer

Chapter 2 Solutions

Accounting for Governmental & Nonprofit Entities

Ch. 2 - Prob. 1Q Ch. 2 - Prob. 2Q Ch. 2 - Explain the modified accrual basis of accounting....Ch. 2 - Prob. 4Q Ch. 2 - What is the primary reason government entities use...Ch. 2 - What is meant by the terms deferred outflows of...Ch. 2 - How do expenses and expenditures differ?Ch. 2 - Prob. 8Q Ch. 2 - Prob. 9Q Ch. 2 - Prob. 10Q

Ch. 2 - Prob. 11C Ch. 2 - Prob. 12C Ch. 2 - Prob. 15.1EP Ch. 2 - Prob. 15.2EP Ch. 2 - Prob. 15.3EP Ch. 2 - The measurement focus and basis of accounting that...Ch. 2 - Which of the following amounts that are identified...Ch. 2 - Prob. 15.6EP Ch. 2 - Prob. 15.7EP Ch. 2 - Under the modified accrual basis of accounting a....Ch. 2 - Prob. 15.9EP Ch. 2 - A certain city reports the following year-end...Ch. 2 - Prob. 16EP Ch. 2 - Prob. 17EP Ch. 2 - Prob. 18EP Ch. 2 - Fund Balance Classifications. Section A provides a...Ch. 2 - Prob. 20EP

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