ACCY 407- Chapter 7, Top Questions and answers, 100% Accurate. VERIFIED.

ACCY 407- Chapter 7, Top Questions and answers, 100% Accurate. VERIFIED. What are the required financial statements for proprietary funds? - 1)Statement of *net position* (or balance sheet) 2)Statement of *revenues, expenses, and changes in fund net position* (operating statement) 3)Statement of *cash flows* (differs under GASB) What are three accounting characteristics of proprietary funds? - 1) * Accrual Basis* - * not* modified accrual -capital assets and long-term liabilities * recorded* within the funds -* Depreciation* expense and * accumulated depreciation* are recorded and reported 2)Flexible rather than fixed budgets recommended: -budgetary accounts are not integrated into the general ledger. What is the accounting equation for proprietary funds? - (Assets + Deferred Outflows)-(Liabilities + Deferred Inflows) = Net Position What is the statement of net position? - a statement prepared with current assets shown in the order of liquidity What are the three categories net position is divided into? - 1)*Net investment in capital assets*—calculated as the value of net capital assets less any outstanding debt related to capital asset acquisitions or construction 2)*Restricted*— restrictions are placed on asset use by external parties through contracts, legal requirements, or donor stipulation