Which statements are required for Proprietary Funds?

Proprietary funds, which are used by entities to account for activities that are similar to those of for-profit businesses, require specific financial statements to accurately present their financial position and operational results. The correct choice mentions the Statement of Net Position, Statement of Revenues, Expenses, and Changes in Fund Net Position, and Statement of Cash Flows.

The Statement of Net Position serves a purpose similar to that of a balance sheet in private sectors, presenting the assets, liabilities, and net position of the proprietary fund. This gives stakeholders a clear view of what the fund owns and owes at a specific point in time.

The Statement of Revenues, Expenses, and Changes in Fund Net Position outlines the financial performance over a particular period, detailing earned revenues and incurred expenses, thus allowing an evaluation of the fund's operational effectiveness.

Lastly, the Statement of Cash Flows provides critical information about the cash inflows and outflows, helping assess the fund's liquidity and ability to generate cash over time. This statement corresponds to the operational cash flow dynamics seen in business entities.

This combination of statements is crucial for understanding the overall financial health and operational performance of proprietary funds, reflecting the intent behind their establishment.