Best Practices - Accounting Flashcards
GFOA recommends that individual state and local governments prepare their financial statements in accordance with…
A. GAAP
B. GAGAS
C. GAAS
D. Cash-basis
A
How often should accounting and related policies be reviewed?
Annually.
Who should be assigned to update the documentation over a control process?
A. the governing body
B. the audit committee
C. an employee knowledgeable about and has responsibility for oversight
C
What are capital assets?
Tangible or intangible assets that:
1) are used in operations
2) have initial useful lives longer than one year
True or false: Adequate controls should be in place for items not capitalized and:
1) require special attention to ensure compliance
2) require special attention to protect public safety or liability
3) require special attention to compensate for heightened risk of theft
True
At what level should a review of small and attractive assets take place?
A. entity-wide level
B. fund level
C. department level
D. workstation level
C
How often should inventory lists be updated? How often should the finance department validate the list?
Annually; at least every five years.
Can items less than two years be expensed rather than capitalized?
Yes
A government has a capitalization threshold of $10,000. It purchases an item that costs $12,000 in year A and is capitalized. In Year B, the same item costs $9,000. Is it expensed or capitalized?
Capitalized.
What is one way to forgo the annual inventory.
Establish a perpetual inventory system that updates in real-time and can provide management with up to date information.
How often does GFOA recommend full inventories of its assets?
At least every 5 years.
On what basis should full cost-accounting be based upon?
A. Full-Accrual
B. Modified-Accrual
C. Cash-basis
D. The same basis as the financial statements.
A
What is an example of an “activity,” and, “path,” in a solid waste disposal’s full cost accounting?
Activity (collection, transfer station, transport, sales) and path (recycle, compost, disposal)
When determining the full cost of providing governmental services, should the government include:
A. Direct costs
B. Indirect costs
C. Both A & B
C
What are examples of direct and indirect costs?
Direct costs (salaries, wages, benefits of employees working solely on the delivery of a service, as well as materials and supplies and services associated with that service) and indirect costs (formulaic costs not associated with providing a single service, like legal, finance, human resources, maintenance, technology, etc.)
