What financial statement is required to show the fiscal status of a municipality at year-end?

What financial statement is required to show the fiscal status of a municipality at year-end?

• A. Budget Summary Report
• B. Comprehensive Annual Financial Report (CAFR)
• C. Monthly Financial Statement
• D. Statement of Cash Flows

Answer: (B)

The Comprehensive Annual Financial Report (CAFR) is the correct choice as it provides a detailed overview of a municipality's financial status at the end of the fiscal year. This report includes a variety of financial statements that comprehensively outline the municipality's financial position, including assets, liabilities, revenues, and expenditures, in accordance with governmental accounting standards. The CAFR serves multiple purposes: it not only presents the municipality's fiscal health to stakeholders, such as government officials, residents, and investors, but it also ensures transparency and accountability in financial reporting. The CAFR typically features three main sections: the Introductory Section, the Financial Section, and the Statistical Section. Each section contributes to a complete understanding of the municipality's finances. Other documents, while they may provide significant financial information, do not fulfill the comprehensive requirements or scope of a year-end fiscal status report like the CAFR does. The Budget Summary Report, for example, outlines budgeted figures rather than actual financial results. Meanwhile, a Monthly Financial Statement provides a snapshot of financial activity over a much shorter period and does not reflect the full year’s accomplishments and financial standing. The Statement of Cash Flows is specifically focused on cash inflows and outflows and does not encompass the broader details present in

The Comprehensive Annual Financial Report (CAFR) is the correct choice as it provides a detailed overview of a municipality's financial status at the end of the fiscal year. This report includes a variety of financial statements that comprehensively outline the municipality's financial position, including assets, liabilities, revenues, and expenditures, in accordance with governmental accounting standards.

The CAFR serves multiple purposes: it not only presents the municipality's fiscal health to stakeholders, such as government officials, residents, and investors, but it also ensures transparency and accountability in financial reporting. The CAFR typically features three main sections: the Introductory Section, the Financial Section, and the Statistical Section. Each section contributes to a complete understanding of the municipality's finances.

Other documents, while they may provide significant financial information, do not fulfill the comprehensive requirements or scope of a year-end fiscal status report like the CAFR does. The Budget Summary Report, for example, outlines budgeted figures rather than actual financial results. Meanwhile, a Monthly Financial Statement provides a snapshot of financial activity over a much shorter period and does not reflect the full year’s accomplishments and financial standing. The Statement of Cash Flows is specifically focused on cash inflows and outflows and does not encompass the broader details present in