Gov-Measurement Focus Flashcards
What are the measurement focus and basis of accounting for the government-wide financial statements?
Measurement focus=Economic Focus
Basis of Accounting=Accrual
Note: TRICK QUESTION, notice that it say GOV WIDE, which is accrual basis. Whereas the fund balance is modified accrual. Also Economic focus is accrual basis and current financial focus is modified accrual
Expenditures of a governmental unit for insurance extending over more than one accounting period:
Expenditures for insurance and similar services (prepaid items) extending over more than one accounting period need not be allocated between or among accounting periods, but may be accounted for as expenditures of the period of acquisition.”
The following information pertains to Comb City:
Year 3 real estate property taxes assessed and collected in Year 3 $14,000,000
Year 2 real estate property taxes assess in Year 1 and
collected in Year 3 1,000,000
Year 3 sales taxes collected by merchants in Year 3 but notrequired to be remitted to Comb until January of Year 4 2,000,000
For the year ending December 31, Year 3, Comb should recognize revenues of:
The first item, Year 3 property taxes, is collected in the same year and so would be recognized as revenue. The second item, Year 2 taxes collected in Year 3, is recognized in the year collected or Year 3. The third item, Year 3 taxes but not collected until January of Year 4, would be recognized as revenue in Year 3, as the collection happens within the 60-day limit:
The measurement focus of governmental-type funds is the determination of:
The measurement focus of governmental type funds is on both:
•the changes in financial position and
•financial position.
Which of the following fund types of a governmental unit have the income determination orientation?
A. General funds
B. Fiduciary funds
C. Both general funds and fiduciary funds
D. Neither general funds nor fiduciary funds
Not general fund, because it is modified accrual and there is no income determination. Even though Fiducuary funds is accrual based there is no income determination in fiduciary funds because fiduciary funds don’t report income, just assets and Liab
The governmental fund measurement focus is on the determination of:
Flow of financial resources
major exception to the general rule of expenditure accrual for governmental units relates to unmatured:
A. principal of general long-term debt and interest on general long-term debt.
B. principal of general long-term debt.
C. interest on general long-term debt.
D. neither principal of general long-term debt nor interest on general long-term debt.
Governmental units use a modified accrual basis of accounting. Expenditures should be recorded as fund liabilities are incurred or assets are expended. However, the expenditure rules will not apply to the principal or to the interest on debt as specified by the GASB.
Which of the following characteristics of service efforts and accomplishments is the most difficult to report for a governmental entity?
A. Comparability
B. Timeliness
C. Consistency
D. Relevance
Relevance encompasses all of the other characteristics listed. Consider for a minute that if the information provided in a financial report is not timely or reliable, it is not relevant. Furthermore, information can easily be developed that is timely, comparable, and consistent and, while it meets all of the characteristics, it still may not be relevant. In order for information to be judged relevant, there must be a close logical relationship between the information provided and its purpose. Based on the diversity of the needs of the audience of potential users, the cost of developing relevant information that is capable of making a difference in a user’s assessment of a problem, condition, or event may be illusive and/or cost prohibitive.
