A governmental financial reporting entity includes:
The primary government
Legally separate organizations for which the primary government is financially accountable Other organizations whose exclusion would render the financial statements misleading or incomplete (per GASB Statement No. 14 and No. 61) Merely keeping records for an organization does not make it part of the financial reporting entity unless there is financial accountability or a significant relationship.
Relevant References:
GASB Statement No. 14 - The Financial Reporting Entity
GASB Statement No. 61 - Omnibus Amendments to GASB No. 14
GASB Codification Section 2100 - Reporting Entity
B). any organization for which records are kept by the primary government
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Separate fund financial statements are required for:
Governmental Funds (e.g., general fund, special revenue)
Proprietary Funds (e.g., enterprise, internal service funds)
Fiduciary Funds (reported separately but not combined with government-wide statements) Long-term debt and capital assets are components within the financial statements-not fund types.
Relevant References:
GASB Statement No. 34 - Financial Reporting Model
GASB Codification Section 2200 - Financial Reporting
GFOA Fund Reporting Framework
B). governmental and proprietary funds

GASB Statement No. 62 (based on FASB ASC 450-20) provides guidance on recognizing loss contingencies.
If a loss is probable and the amount can only be estimated as a range, and no single amount within the range is better, the minimum amount in the range should be accrued.
The remainder of the range should be disclosed in the notes to the financial statements.
Thus:
Accrue: $100 million
Disclose: Additional exposure up to $200 million
Relevant References:
GASB Statement No. 62 - Paragraph 96
GAAP Implementation Guide - Loss Contingencies
AICPA Audit Guide - Government Auditing Standards
A). $100 million and disclose in the notes the exposure to an additional $200 million loss

We calculate straight-line depreciation for each asset using the formula:
Depreciation = Cost ÷ Useful Life
Given:
Refrigerators: $150,000 ÷ 20 = $7,500
Heating system: $500,000 ÷ 15 = $33,333.33
Buses: $1,000,000 ÷ 5 = $200,000
Total Depreciation:
$7,500 (Refrigerators)
$33,333.33 (Heating system)
$200,000 (Buses)
= $240,833.33
So the correct depreciation expense (rounded to the nearest dollar) is:
D). $240,833
Note: Option B ($207,500) is incorrect because it does not reflect total depreciation based on the useful lives provided.
Relevant References:
GASB Statement No. 34 - Capital Asset Reporting
GFOA Best Practices - Capital Assets and Depreciation
FASAB SFFAS No. 6 - Accounting for Property, Plant, and Equipment
D). $240,833

The governmental funds (e.g., general fund, special revenue fund, capital projects fund) are reported using the modified accrual basis and current financial resources measurement focus. Required financial statements for governmental funds include:
Balance Sheet
Statement of Revenues, Expenditures, and Changes in Fund Balances
There is no requirement for a statement of cash flows for governmental funds. The statement of cash flows is only required for proprietary funds (e.g., enterprise and internal service funds) and is prepared using the direct method.
Relevant References:
GASB Statement No. 34 - Basic Financial Statements
GASB Codification Section 2200
GFOA Governmental Fund Reporting Guidelines
D). statement of cash flows