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FAR Exam > 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?

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?

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
19
Q

What are the types of Fiduciary Funds?

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 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

Into Governmental Activities and Business Activities

24
Q

How are activities presented in a Statement of Activities?

A

They are divided by function

If the activities of a component are distinguishable from the rest of the governmental entity; then discreet presentation is required

If the activities of the component cannot be identified and separated from the rest of the governmental activities; then blended presentation is warranted.

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?

A

Statement of Fiduciary Net Position and 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 Outfows; Liabilities; 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 and Net Investment Income) - Deductions (Benefits Payments and 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

What are the three sections included in the Comprehensive Annual Financial Report (CAFR)?

A

Indiana - Intro Section
Farms - Financial Section
Soybeans - Statistical Section

31
Q

What is required to be included in the Intro Section for the CAFR?

A

Lots - Letter
Of - Organizational Chart
Nutrients - Names

32
Q

What is required to be included in the Financial Section for the CAFR?

A 
Many - MD&A and Auditor's Report
Green - Government-Wide Statements
Fields - Fund Financial Statements
Never - Notes
Brown - Budgetary Schedules
33
Q

What is required to be included in the Statistical Section for the CAFR?

A 
Farmers' - Financial Trends
Revenues - Revenue Capacity
Decrease - Debt Capacity
During - Demographics
October - Operating Information
34
Q

What are the Governmental funds financial statements?

A 
Balance Sheet (with reconciliation to government-wide statement of net position)
Statement of revenues, expenditures, and changes in fun balances (with reconciliation to government-wide statement  of activities)
35
Q

What are the Government-wide financial statements?

A

Statement of net position

Statement of Activites

36
Q

What are the Proprietary funds financial statements?

A

Statement of new position
Statement of revenues, expenses, and changes in fund net position
Statement of cash flows

37
Q

What are the Fiduciary funds financial statements (and fiduciary component units)?

A

Statement of fiduciary net position

Statement of changes in fiduciary net position

38
Q

When is a state or local government reported as a special-purpose government?

A

If it is engaged in one governmental program

39
Q

When is a state or local government reported as a general-purpose government?

A

If it has governmental and business-type activities or engages in two or more governmental programs.

40
Q

How does the Statement of Net Position for the Government-wide financial statements calculate net position?

A

Assets + Deferred outflows of resources
- Liabilities + Deferred inflows of resources
= Net Position

  • The statement reports all financial and capital resources. Net position, not equity or fund balance, is reported.
41
Q

What are the three components of Net Position?

A

1) Net investment in capital assets - includes unrestricted and restricted capital assets, net of accumulated depreciation, and related liabilities and deferred inflows and outflows of resources.
2) Restricted net position - includes restricted assets minus related liabilities and deferred inflows of resources.
3) Unrestricted net position - the net of assets, deferred outflows of resources, liabilities, and deferred inflows of revenue not included in the other components of net position.

42
Q

What are the components of Program revenues?

A

1) Charges for services
2) Program-specific operating grants and contributions
3) Program-specific capital grants and contributions

43
Q

When should any individual government or enterprise fund be reported as major?

A

1) Total assets, liabilities, revenues, or expenditures or expenses (excluding extraordinary items) of the fund are at least 10% of the corresponding element total (assets, etc.)
AND
2) An element that met the 10% standard is at least 5% of the corresponding element total for all governmental and enterprise funds.

FAR Exam (18 decks)

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