Exam 1

Question 1

government officials need to exercise a healthy does of __________

Answer 1

professional skepticism

Question 2

what is professional skepticism

Answer 2

is an attitude that includes a questioning mind and a critical assessment

Question 3

mission of the government

Answer 3

provide services for the betterment of society

Question 4

what is the governing force of a government entity

Answer 4

budget

Question 5

Nonprofits and charities may have to file an IRS Form _____

Answer 5

990

Question 6

What is the board that dictates Generally Accepted Accounting Principles for businesses and nonprofits?

Answer 6

Financial Accounting Standard Board (FASB)

Question 7

What is the board that dictates GAAP for state and local governments?

Answer 7

Governmental Accounting Standards Board (GASB)

Question 8

What is the board that dictates GAAP for federal government?

Answer 8

Federal Accounting Standards Advisory Board (FASAB)

Question 9

Sarbanes-Oxley made it to where FASB and GASB are funded by ______________________

Answer 9

independent sources

Question 10

What was the latest GASB was number _______

Answer 10

103

Question 11

What is GASB 103?

Answer 11

Improvements to financial reporting model

Question 12

What does the Chief Financials Officers Act of 1990 do?

Answer 12

improve the financial management and accountability of the United States government

Question 13

Governmental activities are funded primarily by ________ & ___________

Answer 13

Primary taxes and grants

Question 14

Business activities are funded by _____________ / _______________

Answer 14

user feeds/ revenues

Question 15

Governmental activities focus: ___________________________

Answer 15

available current financial resources

Question 16

Business activities focus:
___________________________

Answer 16

all economic resources

Question 17

Governmental activities accounting method: _________________________

Answer 17

Modified accrual basis of accounting

Question 18

Business activities accounting method: _______________________

Answer 18

accrual (activity and cash don’t happen at the same time)

Question 19

Governmental activities type of funds: ________________________

Answer 19

governmental funds

Question 20

Business activities type of funds: _______________________________

Answer 20

proprietary funds

Question 21

How many governmental funds are there?

Answer 21

5

Question 22

What are the 5 governmental funds

Answer 22

1. general fund
2. special revenue
3. debt service
4. capital projects
5. permanent

Question 23

How many propriety funds are there?

Answer 23

2

Question 24

What are the 2 propriety funds?

Answer 24

1. enterprise
2. internal service

Question 25

What is an enterprise fund?

Answer 25

Provides business services to external customers (ex: water company)

Question 26

What is an internal service fund?

Answer 26

Provide business services to internal customers (ex: state of LA has vehicles so of auditor needs to go on trip they rent vehicle and the department pays)

Question 27

Which fund is the most significant of all the governmental funds?

Answer 27

General fund

Question 28

What are some characteristics of a general fund

Answer 28

largest number of transactions; everything not legally or contractually set aside for a specific purpose

Question 29

Every government must have one and only one of which governmental fund?

Answer 29

General fund

Question 30

What is a special revenue fund?

Answer 30

The tax or the source is "special" and comes with constraints

Question 31

What are two ways that constraints could be placed on a special revenue fund

Answer 31

1. Government that grants it 2. or restricted by voters

Question 32

Does debt appear in the debt service fund? Yes or No

Answer 32

No

Question 33

What does a debt service fund do?

Answer 33

Accumulate resources to repay long term debt; sets aside money to pay debt when debt comes due

Question 34

What fund has money that officials agree they HAVE to put aside?

Answer 34

Debt service fund

Question 35

What two funds are often times related?

Answer 35

Capital projects fund and debt service fund

Question 36

What is a capital projects fund?

Answer 36

Account for resources committed/ restricted to a capital project

Question 37

Do capital projects/ assets appear in the capital projects fund? Yes or No

Answer 37

No

Question 38

What in a permanent fund can be spent?

Answer 38

the interest made from the fund but not the principal

Question 39

The principal can NEVER be spent in which fund

Answer 39

the permanent fund

Question 40

The permanent fund must do what?

Answer 40

Must benefit the government or its citizens

Question 41

(formula ) Fund balance =

Answer 41

assets (+ deferred outflows) - liabilities (+ deferred inflows)

Question 42

What are the five categories of fund balances

Answer 42

1. non-spendable 2. restricted 3. committed 4. assigned 5. unassigned

Question 43

What is a non-spendable fund balance

Answer 43

only can spend the interest/ earnings

Question 44

What is a restricted fund balance

Answer 44

constrained by a 3rd party

Question 45

What is a committed fund balance

Answer 45

constrained internally by highest authority or elected body

Question 46

What is an assigned fund balance

Answer 46

expressed explicit intent, lower authority

Question 47

What is an unassigned fund balance

Answer 47

general government services

Question 48

What are a required sections of the Annual Comprehensive Financial Report

Answer 48

MD&A and statistical section

Question 49

what kind of funds are in fund financial statements

Answer 49

governmental and proprietary

Question 50

information about the fund balance sheet

Answer 50

lists funds individually; major funds individual; non-major funds combine

Question 51

what accrual do governmental funds use in the fund balance sheet

Answer 51

modified accrual

Question 52

what accrual do proprietary funds use in the fund balance sheet

Answer 52

full accrual

Question 53

Governmental wide statement of net post categorizes as either: _________________ or ______________

Answer 53

governmental activities or business type activities

Question 54

What basis do statement of net post use

Answer 54

full access basis

Question 55

How many funds are there for non profits?

Answer 55

2

Question 56

What are the 2 types of non profit funds

Answer 56

restricted/ nonrestricted

Question 57

What does the governmental wide financial statement do?

Answer 57

Provide a full view of the financial situation of a governmental entity

Question 58

What are some example of who may want to use a governmental wide financial statement?

Answer 58

lenders, bondholders, and bankers

Question 59

Can a government have multiple capital project and debt service funds? Yes or no and why

Answer 59

Yes if they have multiple capital projects and debt issuances

Question 60

Not-for-profit entities typically use which type of accounting?

Answer 60

Fund accounting

Question 61

What do not-for profit entities typically fall under: FASB or GASB?

Answer 61

FASB

Question 62

Are not-for-profits required to use fund accounting?

Answer 62

No

Question 63

Do not-for-profit entities have to distinguish between restricted and unrestricted resources?

Answer 63

Yes

Question 64

What type of balance does a general fund have?

Answer 64

Unassigned balance

Question 65

What is the only fund with an unassigned balance?

Answer 65

general fund

Question 66

what is a government bond?

Answer 66

a bond issued by government and backed by full faith and credit of issuing government

Question 67

what is a revenue bond?

Answer 67

a bond only backed by the revenues it is financing

Question 68

which bond (revenue or government) has interest rates that are a little higher and riskier?

Answer 68

revenue

Question 69

What is this an example of: developer come to baton rouge and says they are going to put in a mall but need a road widened so the government will out taxes for this

Answer 69

tax increment financing

Question 70

What type of funds have a statement of cash flows?

Answer 70

proprietary funds

Question 71

What type of funds don't have statement of cash flows

Answer 71

governmental funds

Question 72

fund balance + estimated revenues=

Answer 72

available resources for the year

Question 73

Available resourced for the year should ______________________

Answer 73

meet or exceed expenses

Question 74

who executes the budget

Answer 74

organization's executive branch

Question 75

Governments integrate their _______________ into their accounting systems

Answer 75

budgets

Question 76

On what basis are budgets prepared

Answer 76

GASB has no control over the budget

Question 77

what basis does GASB recommend that the budget is prepared on

Answer 77

modified accrual basis

Question 78

governments and some not-for-profits record _____________ to help prevent overspending the budget

Answer 78

encumbrances

Question 79

the entry to record an encumbrance is usually prepared when a purchase order is .. (3 answers)

Answer 79

issued, contract signed or commitment made

Question 80

How are encumbrances recorded

Answer 80

with a journal entry

Question 81

What do encumbrances do

Answer 81

put a restraint on a fund balance

Question 82

a pension is what kind of a fund?

Answer 82

fiduciary

Question 83

what is a fiduciary fund?

Answer 83

a fund of trust (holding on behalf of someone else)

Question 84

Do fiduciary funds show up on the face of the financial statement?

Answer 84

No

Question 85

Why do fiduciary funds not show up on the face of the financial statement?

Answer 85

it is not the state's money (instead disclosed in the footnotes)

Question 86

what are the two types of retirement plans?

Answer 86

1.defined contribution 2. defined benefit

Question 87

what is a defined contribution?

Answer 87

benefit in future is not defined

Question 88

what is a defined benefit?

Answer 88

know exactly what the monetary benefit will be

Question 89

defined contribution is usually called what:

Answer 89

a 401K

Question 90

What is GASB Stmt 68

Answer 90

participant from a multi employer plan must report their prorita pension obligation on their financial statements

Question 91

What are some key uncertainties that come with a pension

Answer 91

employee life expectancies; employee turnover rates; future wages & salaries rates; the investment

Question 92

Do pension plans get get audited?

Answer 92

Yes

Question 93

What are the four types of fiduciary funds

Answer 93

1. pension and other employee benefit trust funds 2. investment 3. private purpose trust 4. custodial

Question 94

What does OPEB stand for

Answer 94

other employee benefits

Question 95

examples of OPEB

Answer 95

health insurance, paid time off, life insurance