Description
Unformatted Attachment Preview
Purchase answer to see full attachment
Explanation & Answer
Attached.
Running head: ADVANCED FINANCIAL ACCOUNTING
Advanced financial accounting
Name of student
Name of professor
Institution
1
ADVANCED FINANCIAL ACCOUNTING
2
Question 1
Yes, Metro city transport is government based this is because, during the establishment of the
law, the city was given an authorization to appoint Metro to act as the entire governing body.
Therefore, all expenses and revenues will be collected and experienced only by the government.
On the other hand, since the metro city transport is a government entity, it should prepare
cashflow statement in four categories mainly; operating activity, capital and related financing
activity, operating activity and non-capital financing activity.
a. Metro city transport is a governmental entity, this is because it was given authorization to
appoint Metro to act as the entire governing body. In addition, the entity has been set up
with an aim of benefitting people from transport issues such as traffic and the government
will run the entity due to its high revenue generation capacity. There are various activities
that governments do for their countries and they entail; expenditures activities, public
welfare activities, investment activities and activities aimed at raising the status of the
citizens. This question focusses mainly on public issues and there are various activities
that government does to end public issues and they entail; provision of health tests and
check-ups at affordable prices, provision of investments that bare risk free like the
treasury bills, provision of free education, initiates the construction of bridges, flyovers
and highways and offers travelling amenities at affordable costs.
b. The Metro city Transport makes use of the Government accounting standards board in
preparation of its cashflow statement. The government accounting standard board
establishes various accounting pri...