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Financial Accounting and Reporting > Governmental Accounting > Flashcards

Governmental Accounting Flashcards

1
Q

What are the three major types of funds in governmental accounting?

A

Governmental, Proprietary, Fiduciary

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2
Q

Which two accounting bases are used in governmental accounting?

A

Accrual basis - current economic resources focus (revenues recognized when earned)

Modified accrual basis - current financial resources focus (revenues recognized when available and measurable)

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3
Q

What is a budget appropriation?

A

The highest amount allowed for a particular expenditure under a budget.

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4
Q

What is an encumbrance?

A

Records purchase and reserves it for the encumbrance.

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5
Q

What is the opening budgetary entry?

A

Dr Estimated Revenues Control
Cr Appropriations Control
Dr/Cr Budgetary Fund Balance (plug)

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6
Q

What is the closing budgetary entry?

A

Dr Appropriations Control
Dr/Cr Budgetary Fund Balance (plug)
Cr Estimated Revenues Control

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7
Q

What are the types of governmental funds?

A 
General Fund
Special Revenue Fund
Permanent Fund
Capital Projects Fund
Debt Service Fund
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8
Q

What is a General Fund?

A

The operating fund of the governmental unit

Records Significant Revenues: Taxes; Tickets; Fines; Licenses

Records Significant Expenditures: Police; Education; Fire Dept

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9
Q

What is a Special Revenue Fund?

A

Restricted for a specific purpose such as street repair.

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10
Q

What is a Permanent Fund?

A

Legally restricted fund; where only earnings can be used to fund programs.

Principal remains intact.

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11
Q

What is a Capital Projects Fund?

A

Used to acquire and build facilities.

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12
Q

What is a Debt Service Fund?

A

Handles repayment of long-term debt and related interest.

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13
Q

Which fund statements are issued in Governmental Accounting?

A

Balance Sheet

Statement of Revenues; Expenditures; and Changes in Fund Balance

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14
Q

When is Revenue recorded in Governmental Accounting?

A

When it is BOTH available and measurable; regardless of when it is spent.

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15
Q

What is Derived Tax Revenue?

A

Money collected from people doing things:

Sales tax (buying cars) or income tax (people working)

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16
Q

What is Imposed Tax Revenue?

A

Tax assessed just because things exist

Example: property tax on a car (even if it’s never driven); real estate tax

Recorded as a revenue when BUDGETED.

Estimated uncollectible property tax revenues don’t offset revenues; so don’t net them.

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17
Q

What are the types of Proprietary Funds? S-E

A

Internal Service Funds - to serve the needs of other governmental units (i.e. motor pool)

Enterprise Funds - provide goods or services to external users (i.e. post office)

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18
Q

What are the Fund Balance Types?

NU-CAR

A 
Restricted - Restricted by Contributor 
 Committed - Restricted by Government
 Assigned - Intended for a purpose
 Unassigned - Available to be spent
 Non-spendable - Not in a spendable state
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19
Q

What are the types of Fiduciary Funds? fiduciary=trustee, gov is trustee for…

A

Agency Fund - government acts as an agent or custodian

Pension Trust Fund - Government is a trustee for a pension plan

Investment Trust Fund - Government is a trustee over a series of investments

Private Purpose Trust - Trust that benefits various individuals and entities

20
Q

How are Assets & Liabilities presented on the Statement of Net Position?

A

Assets: (Current & Non-Current)+Deferred Outflows of Resources

Liabilities: (Current & Non-Current)+Deferred Inflows of Resources

21
Q

How are Capital Assets shown on a governmental (G) Statement of Net Assets?

A

They are shown net of debt

Asset Cost
- Accumulated Depreciation
- Asset Liabilities
=Net Assets

22
Q

How is infrastructure reported on a governmental Statement of Net Assets?

A

Modified approach:

Reported at cost; no accumulated depreciation

23
Q

How is a Statement of Net Assets divided?

A

Governmental Activities and Business Activities

24
Q

How are activities presented in a Statement of Activities?

A

divided by function

If the activities of a component are distinguishable then discreet presentation is required

If the activities of the component cannot be identified and separated –blended presentation

Component units are reported in the Entity-Wide Financial Statements and not the Fund Financial Statements.

25
Q

What is the primary objective of governmental accounting?

A

To provide information that is useful and benefits a wide range of users including:

Costs of services provided

Sufficiency of revenues to cover costs

Financial position of entity

26
Q

What Financial Statements are required for Defined Benefit Pension plans? think pension are what type…of the three

A

Statement of Fiduciary Net Position

Statement of Changes in Fiduciary Net Position

27
Q

What are the components of the Statement of Fiduciary Net Position for Defined Benefit Pension Plans?

A

Assets + Deferred Outflows

=(Fiduciary) Net Position

28
Q

What are the components of the Statement of Changes in Fiduciary Net Position for Defined Benefit Pension plans?

A

Additions: Contributions/Net Investment Income
< Deductions:Benefits Pmts Admin Expense >

=Net Change in Fiduciary Net Position

29
Q

What should be included in the Financial Statement notes for Defined Benefit Pension Plans?

A

Types of Benefits; Plan Member Classes; Board Information; Investment Policies and FV Determination

30
Q

Statement Rev, Expend, Changes in Fund Bal…think about which type of the 3 Gov funds this is

A

Revenues

Other Fin Sources

=Net Change fund assets

31
Q

Proprietary funds…what type of activities?

A

Business type, similar to commercial accounting

32
Q

Statement Rev, Expend, Changes in NET POSITION for Proprietary…think about which type of the 3 Gov funds this is

A

Operating Revenue

NonOp Revenue

=Change in net position

33
Q

Statement Rev, Expend, Changes in NET POSITION for Fiduciary…think about which type of the 3 Gov funds this is

-think back to tax accounting for trusts

A

Additions

=Change in net position

34
Q

Governmental funds are MAC-GraSPP

A

Modified
Accrual
Current fin resources measurement
GRASPP

35
Q

Proprietary and fiduciary funds have “SPACE”

A 
SE 
PAPI
Accrual
Carry fixed assets/ LTD
Economic resources measurement
36
Q

Are fixed assets or non-current liabilities reported for GRaSPP funds? Deferred outflows and inflows?

A

NO (have to do reconciliation later)

Sometimes…only if

37
Q

Are fixed assets or non-current liabilities reported for Proprietary and Fiduciary (SE,PAPI) funds? Deferred outflows and inflows?

A

YES

Yes

38
Q

For Fiduciary/Proprietary (SE, PAPI) what are the components of net position? (3)

A
  1. Net Inv–Capital Assets
  2. Restricted
  3. Unrestricted
39
Q

Revenue recognition criteria for G, P, F

A

G: when measurable and available (modified accrual)

P, F: when earned (full accrual)

40
Q

Constraint categories/hierarchy?

A

NUCAR

Non-spendable
Unassigned
Committed
Assigned
Restricted
41
Q

Non-Spendable

A

Money has been spent. Assets are maturing or expiring (investment v prepaid)

42
Q

Restricted

A

Externally restricted:

Legislation, grantor, creditor requirement like bond covenants must be satisfied

43
Q

Committed

A

Internal restriction:
highest gov authority sets aside money

Examples:
Encumbered—Appropriations (obligation to spend)

44
Q

Assigned

A

Internal

Intention without formal commitment (designation)

45
Q

Unassigned

A

Not C,A,R, N

Governmental Funds (GRaSPP)

funds might have negative unassigned fund balances if expenditures > restricted or committed

General Funds = Positive balance always

46
Q

what section can you find types of fund BALANCES

A

GASB 54

Financial Accounting and Reporting (4 decks)

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