📏CPA EXAM PREP

Governmental Transactions

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Question

Why do governmental funds recognize property-tax revenue differently from government-wide statements?

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Answer

Governmental funds use modified accrual and require revenue to be measurable and available.

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Question

Why is the modified approach allowed for infrastructure assets?

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Answer

If the government maintains the assets at a disclosed condition level, depreciation is not required.

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Question

How is net pension liability calculated?

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Answer

Total pension liability minus plan fiduciary net position.

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Question

Why are interfund services treated differently from interfund transfers?

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Answer

Interfund services are reciprocal; transfers are nonreciprocal.

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