The Governmental Accounting Standards Board (GASB) establishes ...

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The Governmental Accounting Standards Board (GASB) establishes financial reporting standards for state and local governmental entities. An entity possessing the following characteristics should follow GASB standards:
 
  a. The power to enact and levy a tax.
  b. The power to issue debt, for which its interest is exempt from federal taxation.
  c. The potential that a government could unilaterally dissolve the entity and assume their assets and liabilities.
  d. All of the above.
  e. Only a and b.

Question 2

All of the following statements regarding a horizontal analysis are true except:
 a. A horizontal analysis is used to compare an item in a current statement with the same item in priorstatements.
  b. A horizontal analysis can be performed on a balance sheet and income statement, but not on a statement ofcash flows.
  c. If fees earned in Year 1 are 125,000 and fees earned in Year 2 are 143,750, a horizontal analysis willindicate a 15 increase over this period.
  d. When two statement s are compared in horizontal analysis, the earlier statement is used as the base forcomputing the amount and the percent of change.

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Answer to Question 1

d

Answer to Question 2

b