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FAR cpa > Governmental Accounting > Flashcards

Governmental Accounting Flashcards

1
Q

6 characteristics of effective Gov financial reporting

A 
Timeliness 
Consistency 
Comparability 
Understandability 
Reliability
Relevance (difficult to achieve)
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2
Q

Accounting principles for
Gov
nfp

A 
Government = GASB
NFP = FASB
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3
Q

Separate fund financial statements should be presented for

A

Governmental and proprietary funds to report additional and detailed information about the primary government

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4
Q

The measurement focus for all governmental funds is

A

The flow of current financial resources

Modifies accrual basis is used

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5
Q

Primary users for governmental financial statements

A

Citizens/taxpayers, school boards, and investors and creditors. Internal users are not considered primary users.

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6
Q

Inter-period equity

A

Having current year revenues cover current year expenditures so that future taxpayers don’t end up paying for benefits provided to current tax payers

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7
Q

Modified accrual accounting

A

Revenues are recorded when they are measurable and available

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8
Q

Accrual accounting

A

Revenues are recorded when measurable and earned

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9
Q

Proprietary fund accounting

A

Accrual basis is used and measurement focus is the flow of economic resources

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10
Q

Government funds are MAC-GRSPP

A 
M - modified 
A - accrual accounting 
C - current financial resource measurement focus 
G- general funds 
R- special Revenue
S- debt Service 
P- capital Projects 
P- permanent
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11
Q

Proprietary and fiduciary funds have SPACE

SE-PAPI

A

SE- service ; enterprise
PAPI- pension, agency, private, investment
A- accrual accounting
C- carry fixed assets and long term debt
E- economic resources measurement focus

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12
Q

General fund

A

Accounts for everything not required to belong in another type of fund. Ordinary operations of a government unit

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13
Q

Special revenue fund

A

Account for revenue sources that are restricted or committed to be spent for specific purposes other than debt service or cap projects

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14
Q

Capital project funds

A

Funds that are restricted for construction or acquisition of capital facilities

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15
Q

Debt service funds

A

Fund restrictive or committed for debt service principal and interest expenditures

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17
Q

Enterprise fund (proprietary)

A

Accounts for business type activities that the public is the primary user on

(Often used for utilities, airports, and transit systems)

Accounts for fixed assets in a manner similar to a for profit organization

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18
Q

Internal service funds

A

Business type activities were other government agencies are the primary user

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19
Q

Fiduciary

A

Means money held for others

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20
Q

Pension trust funds

A

Assets held in trust to provide employee retirement benefits

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21
Q

Private purpose trust funds

A

Assets held in trust to benefit individuals

Not general public use
Statement of cash flows not required

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22
Q

Investment trust funds

A

Accounts for assets held in trust for other governments

Investment pools

23
Q

Agency funds

A

Collects cash to be held temporarily for an authorized recipient to whom it will be later disbursed

(Ex. Taxes collected for another governmental entity)
No gov monitoring

24
Q

Permanent funds

A

Accounts for endowments (donation of money or land) for which the earnings are restricted to support government programs dedicated for public purpose

25
Q

Budgetary
Activity
Encumbrance

A

B- used to control spendin
A- emphasizes the flow of CURRENT financial resource
E- used to record purchase orders and aid in the control of spending

26
Q

Accrued as receivable and revenue when collected within 60 days of year end (measurable and available)

A 
Imposed non-exchange revs
Billed/recorded =revenue 
-real estate taxes (due)
-fines and penalties 
Derived tax revenue 
Received= revenue 
-income taxes
-sales taxes 
Earned=revenue
-collected in advance 
-restricted grants (earned when spent)
27
Q

Voucher payable is recorded

A

DR expenditure

CR voucher payable

28
Q

Derived (non exchange) tax revenue

A

Represents taxes imposed on or derived from exchange transactions such as commercial sales (Sales taxes)

29
Q

JE to record budgeted amounts for estimated revenue and approved expenditures (appropriations)

A

DR estimated rev control
DR budgetary control (neg/deficit)
CR appropriations control
CR budgetary control (positive/surplus)

30
Q

Expenditure elements belong to which type of classification ?

A

Object.
Expenditures of governmental resources should be classified by object classes- according to the type of items purchased or services obtained.

Ex.(salaries and wages)

31
Q

Estimated revenues

A

Property taxes
Licenses
And fines
And intergovernmental revenues

32
Q

Fixed assets

A
  • not expected to contribute to the generation of revenue
  • treated as an expenditure.
  • will reduce the excess of revenue over expenditures.
33
Q

An exchange transaction

A

A RECIPROCAL transfer in which each party receives and sacrifices something of approximately equal value
Bargained value in transaction

34
Q

A non-exchange transaction

A

Involves giving/ receiving value without receiving/ giving equal value in return. No bargain value or arm’s-length transaction

NON-RECIPROCAL

35
Q

Purchase method

A
  • records expenditure when purchased
  • initially records additions to inventory as an expenditure
  • then establishes inventory balances and related non-spendable fund balance amounts based on physical count valuations at year-end
36
Q

Consumption method

A
  • record a current asset when purchased.

- record an expenditure as consumed during the period

37
Q

Outstanding encumbrance at year end

A

Treated as a component of an appropriate classification of fund balance (generally committed or assigned)

38
Q

Closing BAE BAE

A

Budget is booked, then closed for same amount.
Activity is booked and closed for actual amount
Encumbrance is booked then reversed for same amount

39
Q

Non spendable

A

(Inventories)
Non spendable fund balances represent resources in a form that can’t be spent or are legally or contractually required to remain whole.

40
Q

Unrestricted

Restricted

A

U- funds that army restricted or net investment in capital assets

R- the restriction needs to be due to an external reason such as creditors or legislation or debt covenants. “City council” would still be considered unrestricted

41
Q

Net investment in capital assets

A

Balance is equal to capital assets - accumulated depreciation- any debt related to the capital assets

42
Q

Committed

A

Constrained by the governments highest level of authority.

43
Q

Assigned

A

Intended to be used for specific purpose doesn’t meet restricted or committed criteria

44
Q

Unassigned

A

Resources available for any purpose

45
Q

Fund balance

Net position

A

FB- equity section for governmental fund types

NP- equity section for proprietary and fiduciary fund types

46
Q

Purchase order approved

A

DR encumbrances

CR budgetary control

47
Q

Reciprocal and non reciprocal activity

A

R- interfund loans / interfund services provided and used

NR- interfund transfers/ interfund reimbursements

48
Q

When a capital lease of a governmental unit represents the acquisition of a general fixed asset JE

A

DR expenditure- cap.lease

CR. other financing source-cap.lease

49
Q

Grants from state government are considered

A

Revenue

of capital projects fund

50
Q

Transfers are considered

A

Other financing sources

General

51
Q

Order of presentation of line items on a proprietary fund statement of rev,exp, and changes in fund net position

A 
I-income
N-non-operating income and exp
C-capital contributions
A-additions to endowments 
S-special items (unusual or infrequent)
E-extraordinary items 
T- transfers

FAR cpa (17 decks)

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