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Flashcards in Chapter 2 Deck (171):

Funds established to account for resources held by a government in a purely custodial capacity for others.

Agency Fund


The city of Hannah has established a trust to provide resources to offset the costs of maintenance of the city-owend cemetery. The majority of the resources of this trust will be cemetery plot sales and donations from families of those buried in the cemetery. The trust corpus is nonexpendable in nature. Transactions associated with this trust activity would most likely be accounted for in a ____.

Permanent Fund


The notes to the financial statements typically are notes to bot the ____ and ____ financial statements.

fund and government wide


Funds established to account for the external portion of investment pools held by the sponsoring government.

Investment Trust Funds


Governmental accounting systems must provide data ____.

both for external reporting in conformity with GAAP and for controlling and reporting on finance-related legal compliance matters


For most governments, the majority of their general government activities and the largest number and dollar amount of their transactions are reported in the ____.

General Fund


Many other governments voluntarily accumulate amounts to repay the principal and interest on general long-term debt. These governments use ____ to maintain accountability over resources that are to be used to repay debt.

Debt Services Fund


Donation to the city where the principal is to remain intact forever and the earnings are to be used to benefit the Boy Scout and Girl Scout organizations in the city.

Private Purpose Trust Fund


True or false: The GASB does not specify how to maintain the nonfund accounts for general capital assets and general long-term liabilities.



The activities of a municipal employee retirement plan that is financed by equal employer and employee contributions should be accounted for in ___.

a Trust Fund


What are the four types of interfund activies?

Interfund loans, interfund services provided and used, Interfund reimbursements, and Interfund transfers


School buildings are accounted for in ____.

General Capital Assets 


Cash and investments of a bond sinking fund established to service general governemnt long-term debt are accounted for in ___.

General Service Fund


Collects taxes withheld from employees throughout the government and makes payments to the appropriate government for these withholdings.

Agency Fund


A transaction in which a municipal electric utility issues bonds (to be repaid from its own operations) requires accounting recognition in ___.

Enterprise Fund


Grant proceeds that are restricted for a specific purpose are recorded in a ____.

special revenue funds account


Unrestricted tax revenues should be accounted for in ____.

General Fund


What is typically accounted for in the "water and sewer" Enterprise Fund?

municipal governments and special district operations of utilities. Example: Water treatment and sanitary sewage facilities for which they charge a fee to customers


Used to account for acquisition of major capital assets.

Capital Projects Fund


What are the two types of proprietary Funds?

Enterprise Funds; Internal Service Funds


The ____ of a state or local government are secured by the general credit and revenue raising powers of the government rather than by the assets acquired or specific fund resources.

General Long-Term Liabilities


The city would account for the actuates of a central garage in the ____.

Internal Service Funds


Governments must comply with the many _____.

finance-related legal and contractual requirements, regulations, restrictions, and agreements


The actiities of a central motor pool that provides and services vehicles for the official use of municipal employees from several city departments and charges them a fee to recover costs incurred should be accounted for in _____.

Internal Service Fund


GAAP based financial statements are necessary to ensure ____.

proper external financial reporting and a reasonable degree of comparability among the annual financial statements of governments across the nation


Where would the payment of cash to employees for monthly salaries be recorded?

General Funds


_____ financial statements are highly summarized.



Bond proceeds fund (to account for proceeds or bonds issued to finance street construciton) are accounted for in ___.

Capital Projects Funds


The montly remittance to an insurance company of the lump sum of hospital-surgical insurance premiums collected as payroll deductions from employees should be recorded in ____.

Agency Fund


The ____ financial statements are more detailed than the ____ statements.

fund; government-wide


Recognized in governmental fund financial statements: Generally net financial assets expended during a period for current operations, capital outlay, long-term debt principal retirement, and interest.




What are the 5 types of local governments?

Counties; Municipalities; Townships; School Districts; Special Districts


A government's accounting system must be designed to _____.

maintain and provide information to accomplish multiple purposes


Which of the following should be reported as expenditures in governmental funds? Which should be accounted for as Expenses?

A. Salaries

B. Interst on short-term debt

C. Purchae of Equipment

D. Long-term liability principal retirement

E. Depreciation

F. Short-Term Liability Principal Retirement

Expenditures: Salaries, Interest on Shert-term debt, Purchase of equipment, Long-term liability principal retirement


Expenses: depreiation, short-term liability principal retirement


Where would the receipt of a bill from the contractor for construction costs on a building be recorded?

Capital Projectes


What are the three required financial statements included in the basic financial statements?

Government-Wide Statements Fund Financial Statements Notes to the Financial Statements Retained Earnings


Tax revenues resturcted for road maintenace should be recorded in ___.

Special Revenue Fund


Not accounted for in governmental financial statements.

General long-term liabilities


Electric Fund (to account for revenues received from the sale of electricity to the public) are accounted for in which accounts?

Enterprise Funds


General government activities commonly reported in the general fund include what?

Police protection, fire protection, general administration, street maintenance, and public park maintenance.


The financial reporting model has been called a ____ model.

Duel Perspective


A county may use an ____ to account for the activities of a central duplicating and printing department that serves various county departments.

Internal Service Funds


The transactions of a Community Development Block Grant that must be used to finance rehabilitation of privately owned housing in an economically depressed neighborhood of the city typically would be reported in which funds and or nonfund accounts?

Special Revenue Fund only


General government liabilities (except unmatured general long-term liabilities) payable from governmental funds

Related Liabilities


A transaction in which a municipal electric utility paid $150,000 out of its earnings for new equipment requires accounting recognition in ____>

Enterprise Fund


The portion of general government bods payable that matures in the next fiscal year are accounted for in __.

General Capital Assets & General Long-Term liability


Receipts from a special fishing tax restricted to maintain the (no-charge) public fishing pier.

Special Revenue Fund


Bond redemption fund (to account for taxes and other revenues to be used in retiring bonds) is accounted for in ___.

Debt Services Fund


Long-term note for the government's entral motor pool that "rents" vehicles to other departments and agencies of the government at a rate that reimburses its costs is accounted for ___.

Internal Service Fund


Funds used to account for assets held by a government in a trustee or agency capacity for the benefit of others.

Fiduciary Funds


_____ accounting measures net position, changes in net position, and cash flows.

Proprietary Fund


Operating Fund (to account for unrestricted revenues not related to any other fund) is accounted for in ___.

General Fund


In governmental funds, cash, investments, and receivables.

Financial Assets


What is the main difference between expenditures and expenses?

Expenditures typically reflect the net financial assets expended to acquire goods or services, whereas expenses reflect the costs of goods sold or services used


Bonds payable issued in a prior year for general government purposes is accounted for in ____.

General Capital Assets & General Long-Term Liabilities Funds


Amounts owed to general government bondholdersthat must be paid in the future.

General Long-Term Liability Accounts


A transaction in which a municial electric utility paid $150,000 out of its earnings for new equipment requires accounting recognition in a ___ fund.

Enterprise Fund


What are common activities that may be accounted for in the Internal Service Funds.

Central stores, health care and other self-insurance activities, and computer services departments


Internal Services Funds are classified as ___.

Proprietary Funds


Who is the predominant customer for Enterprise Funds?

the general public (as well as businesses and other entities beyond the government's own departments or agencies)


Do not represent financial resources available for expenditure, but are items for which financial resources have been used and for which accountability should be maintained

General Capital Assets


May be used to account for any activity of a fund, department, or agency that provides goods or services primarily to other funds, departments, or agencies of the governmental unit, or to other governmental units on a cost-reimbursement basis.

Internal Service Funds


Financial assets include ____?

Cash, Investments, and Receivables


Transactions between funds are referred to as ___.

Interfund Activity


Purchase of police cars and fire trucks would be accounted for where?

General Fund


Detailed presentations of fund net position or fund balance, operating results, and cash flows.

Fund Financial Statements


Funds that are established to account for and report financial resources that are restricted, committed, or assigned to expenditure for principal and interest.

Debt Service Funds


Where would the payment of $50,000 in building bonds and $30,000 interest matured and paid be recorded.

Debt Service Fund


Un-matured, long-term liabilities incurred for government activities.

General Capital Assets


The types of transactions, events, or elements that are reported in financial statements.

Measurement Focus


What are the 4 types of fiduciary funds?

1. Pension (and other employee benefit) Trust Funds 2. Investment Trust Funds 3. Private-Purpose Trust Funds


A brief analysis and discussion by the SLG's management of its financial statements, its schedules, other specified analysis, and any known event or situation that is expected to affect the SLF in the near future

Management's discussion and analysis (MD&A)


Expenditures of $200,000 were made during the year on the fire station. This transaction requires accounting recognition in the ____.

Capital Projects Fund, General Capital Assets, and General Long-Term Liabilities Accounts


Investment Trust Funds are classified as ___.



Where would the purchase of capital assets on short-term credit be recorded?

General Fund


The activities of a municipal employee retirement plan that is financed by equal employer and employee contributions should be accounted for in a ___ fund.

Trust Fund


Resources restricted for construction of a new government office building should be accounted for in ___.

Capital Projects Fund


Condensed consolidating overview presentations of the SLG's net position and activities

Government-wide financial statements


Debt Service are classified as ____.

Governmental Funds


Receipts from a special tax levy to retire and pay interest on general obligation bonds issued to finance the construction of a new city hall.

Debt Service Fund


Each of the following is a fiduciary fund except: A. Permanent Fund B. Investment Trust Fund C. Agency Fund D. Private-Purpose Trust Fund

A. Permanent Fund


City Bus Line Fund (to account for revenues received from the public for transportation services) are accounted for in ____.

Enterprise Fund


Funds that are permitted to be used to account for any activity for which user fees charged for goods and services provided to external customers (outside the government) are a principal revenue source.

Enterprise Funds


A high school's administrative personnel may maintain a bank account that holds the monies of all student organizations. The monies are held in an ___ capacity for the student organization making this an ___ fund.

agency; agency


What are the most common examples of deferred inflows in governmental funds.

- Taxes collected in advance of the period for which they are levied or levied in the current period to finance the next period - Amounts related to deferral of revenue recognition because of the "availability criterion - i.e. because cash was not collected soon enough after year end


Funds established to account for "resources that are legally restricted to the extent that only earnings, and not principal, may be used for purposes that support the reporting government's programs - that is, for the benefit of the government or its citizenry.

Permanent Funds


Where would the issue of a six-month note to provide temporary financing be recorded?

General Fund


The fund financial statements, government-wide financial statements, and notes to the financial statements collectively comprise the ____ financial statements.



Speial revenue funds are classified as ___.



The proceeds of a federal grant made to assist in financing the future construction of an adult training center should be recorded in ___.

Capital Projects Fund


What is the primary purpose for governmental fund accounting?

to reflect its revenues and expenditures - the sources and uses of its financial resources - and its assets, the related liabilities, and the net financial resource available for subsequent appropriation and expenditure


The inclusion of general capital assets in the financial statements of a governmental fund would ____ the fund balance, which could ___ users of the fund balance sheet.

increase; mislead


General funds are classified as ___.

governmental funds


In governmental funds; general government liabilities that are related to the current year and are normally paid from available expendable financial assets.

Related Liabilities


Permanent Funds are classified as ___.

Governmental Funds


Where would the issue of bonds at par and receipt of cash to finance construction of a building be recorded?

Capital Projects


Accountability for general capital assets and un-matured general long-term liabilities is ____.

maintained in separate nonfund accounts


Governmental accounting systems are designed, organized, and operated on a ___ basis.



The financial reporting model requires both ____ and ___.

Fund financial statements; government-wide financial statements


Who is the predominant customer for Internal Service Funds?

Other departments or agencies of the government


RSI includes:

Management's discussion and analysis (MD&A) Other required supplementary information (RSI)


Where would the sell of a capital asset for $7,000 cash; its depreciated cost was $9,000, be recorded?

General Fund


Where would the six-month note matured and paid, along with interest, be recorded?

General Fund


The use of fund accounting allows governments ____.

both to maintain proper accounting controls over restricted and designated resources and to demonstrate compliance with finance-related legal and contractual provisions.


The California Public Employees Retirement System, has established multiple trusts to manage and account for the pension and health care benefits for CA's employees, retirees, and their beneficiaries. This would be recorded where?

Pension Trust Funds


Interdeparmental Printing Shop Funds (to account for revenues received from departments for printing done for them by the interdepartmental printing shop) are accounted for in ___.

Internal Services Fund


Park Funds (to account for special taxes levied to finance the operation of parks) is accounted for ___.

Special revenue Funds


Typical water and sewer departments should be accounted or in an ___.

Enterprise Fund


Donation to the city to be invested in perpetuity with the earnings from that investment to help maintain city parks.

Permanent Fund


When one government, say a county, bills and collects the property taxes for the cities, school districts, and other taxing agencies within the county.

Agency Fund


Activities whose management requires a preiodic measurement of revenues and expenses, and whose customers are the general public.

Enterprise Fund


 A city collects property taxes on behalf of the local sanitary, park, and school districts and periodically remits collections to these units. This activity should be accounted for in ___.

Agency Fund


The operations of a municipal government's public library receiving the majority of its support from property taxes levied solely for that purpose should be accounting for in ____.

Special Revenues Fund


recognized in proprietary fund, trust fund, and government-wide financial statements: costs expired during a period, including depreciation and other allocations as in business accounting



Funds used to report escheat property established to account for all other trust arrangements under with principal and/or income benefit individuals or groups outside of the government.

Private Purpose Trust Funds


Funds established to account for "resources that are required to be held in trust for the members and beneficiaries of defined benefit pension plans, defined contribution plans, or other post-employmental benefit plans or other employee benefit plans"

Pension Trust Funds


A school fund (to account for special taxes levied by a county to finance the operation of schools) is accounted for where?

Special Revenue Fund


Funds used to account for a government's continuing business-type organization and activities.

Proprietary Funds


Capital assets of a government department that sells services to the public as the primary ongoing source of financing for its operations is accounted for in ___.

Enterprise Fund


Private purpose trust funds are classified as ___.

Fiduciary Funds


The segregation of resources accumulated to pay principal and interest on long-term debt of the general government.

Debt Service Funds


Special sales taxes that can only be used by the state for the intended purpose are recorded as revenues in which type of fund?

Special Revenue Funds


Segregations of general government net financial assets according to the purpose for which they may be used.

Governmental Funds


Money collected for the state fund (to account for money collected as agent for the state) is accounted for in ___.

Agency Funds


The receipts from a special tax levy to retire and pay interest on general obligation bonds issued to finance the construction of a new city hall should be recorded in a ____.

Debt Service Fund


A municipality's issuance of general obligation serial bonds to finance the construction of a fire station requires accounting recognition in the ____.

Capital Projects; General Capital Assets; and General Long-Term Liabilities Accounts


School Endowment Fund (to account for contributions that cannot be expended but are to be invested to generate earnings to be used for special school programs) are accounted for in ____.

Permanent Fund


Governments should prepare financial statements in conformity with ___.



The ____ are more detailed than the ___ financial statements.

notes; fund


Agency funds are classified as ___.



Employees' Pension and relief Fund (to provide retirement and disability benefits to employees) is accounted for in __.

Pension Trust Funds


Actuarial information related the SLG's defined benefit pension plan and other post-employment benefit plans.

Other required supplementary information (RSI)


List a few transactions that would typically be reported in a county's general fund?

1. The purchase of 10 new public safety vehicles 2. The annual lease payment for the copiers in the county courthouse 3. the collection of property taxes that are past due from previous years


Accounts for contributions by the government and employees to be invested and paid to employees after retirement.

Pension Trust Fund


Funds established to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects.

Special Revenue Funds


Where would the purchase of a capital asset with cash be recorded.

General Fund


Capital outlays for major general government facilities and other projects financed from general obligation bond proceeds must be reported using a ____.

Capital Projects Fund


____ are classified as governmental funds even though they may not be expendable funds like other governmental funds.

Permanent Funds


Capital Projects are classified as ___.

Governmental Funds


Used to account for land, buildings, and equipment owned by the government.

General Capital Asset Accounts


The governmental funds and nonfund accounts are used to account for ____.

General Government


In governmental funds: the net position of the the fund - the difference between its financial assets plus deferred outflows and its related liabilities and deferred inflows.

Fund Balance


What is the major difference between proprietary funds and governmental funds?

governmental fund does not include either capital assets used in general government activities or un-matured long-term liabilities incurred for those activities


Pension Trust Funds are classified as ___.

Fiduciary Funds


The operations of a city bus line receiving all its funding from user charges class?

Enterprise Fund


Where are the activities of government owned electric and gas utilities, solid waste landfills, and major airports commonly accounted for?

Enterprise Funds


What are the 5 types of governmental funds?

1. The General Fund 2. Special Revenue Funds 3. Capital Projects Funds 4. Debt Service Funds 5. Permanent Funds


What is a characteristic of governmental fund accounting and financial reporting?

The inclusion of only financial assets and related liabilities


Where are mass transit systems, civic centers, toll roads, and state lotteries typically accounted?

Enterprise Funds


Most governments use ____ to maintain accounting controls over resources that are restricted for a particular capital asset purpose.

Capital Projects Funds


Provides uniform minimum national standards of and guidelines for annual financial reporting to groups and persons outside the government.



The levy and collection of property taxes for general operations of a city.

General Fund


The basic financial statements must be accompanied by certain ____ to meet the minimum requirements for a general purpose external financial report.

Required Supplementary Information (RSI)


Bond redemption Fund (to account for cash and investments that are to be used to repay outstanding bonds) are accounted for in ___.

Debt Services Fund


All governments with general government activities will have ___ general fund(s).



Funds established to account for and report financial resources that are restricted committed, or assigned to expenditures for capital outlays including the acquisition or construction of capital facilities and other capital assets.

Capital Projects Funds


Governments purchase many smaller general capital assets - for example, police cars and office equipment - that typically are accounted for in the ___.

General Fund


Some governments are legally required by bond covenants to accumulate resources in a ____ to repay general long term debt principal and interest.

Debt Services Fund


Business accounting systems must provided ___.

data for both GAAP reporting and income tax reporting


The _____ is used to account for and report all financial resources not accounted for and reported in another fund.

General Fund


Bridge Construction Funds (to account for the proceeds from the sale of bonds) are accounted for in ___.

Capital Projects


All of the following are considered governmental funds except: A. A special revenue fund B. Capital Projects Fund C. Permanent Fund D. Internal Services Fund

D. Internal Service Fund


The operations of a municipal swimming pool with debt secured soley by charges to users should be accounted for in ____.

Enterprise Fund


The state of Wisconsin established the local government pooled investment fund to account for monies that local governments voluntarily send the state to manage and to invest for the local government's benefit. What type of fund is this?

Investment Trust Fund


Federal Fund (to account for federal construction grant proceeds) are accounted for in ___.

Capital Projects


Funds that are generally used to account for the sources, uses, and balances of a government's general financial resources and any related deferred outflows and deferred inflows.

Governmental Funds


Today, the _____ is often the largest industry within a state, and ____ often houses the biggest business in a town.

State Government; City Hall


_____ accounting is the most distinctive feature of governmental accounting.



The prroprietary funds and fiduciary funds are used to account for _____ and ____.

government organizations; relationships that are similar to those in the private sector


Enterprise Funds are classified as ___.

Proprietary Funds