F6 M5 Governmental Accounting Overview Flashcards
(16 cards)
what is the purpose of fund accounting for governments?
to monitor and report compliance for spending purposes and limits and other objectives
what do GASB concept statements no. 1-6 describe?
governmental financial reporting communicates financial info to users and fulfills a government’s duty to be publicly accountable
what are GASB 34 reporting requirements?
1) basic financial statements including notes
2) required supplementary info
what do general purpose external reporting require?
GASB 34 reporting requirements and the annual comprehensive financial report
what are governmental type and business type activities supported by?
taxes and user fees, respectively
how do governmental financial reports assess accountability?
1) comparing actual financials to budgets
2) financial condition and results of operations
3) determining compliance with finance rules and regulations
4) evaluating operating efficiency and effectiveness
what is the cornerstone of governmental financial reporting?
accountability
what is interperiod equity?
it is used to balance the budget on an annual basis; enables governments to live within their means and assess if have enough revenues to pay for services
what characteristics of info should governmental financial reports contain?
understandability
reliability
relevance
timeliness
consistency
comparability
what are some limitations of governmental financial reporting?
1) financials based on estimates and judgments
2) only one source of info, which could be more useful combined with other data
3) not meet all diverse needs of users
4) cost-benefit relationships be considered
what should financial reporting for governments help users evaluate?
1) sources and uses of financial resources
2) how entity financed activities and met cash requirements
3) if financial position improved or deteriorated
what should financial reporting for governments show users in its ability to provide services?
1) financial position and condition of governmental entity
2) noncurrent physical assets available to government and service potential in future
3) legal or contractual restrictions on resources and risk of loss
what are three things that separate governmental accounting from commercial accounting?
1) fund structure
2) fund accounting
3) external reporting
how are fund financial statements presented as? (3)
1) governmental funds
2) proprietary funds
3) fiduciary funds
is a government required to have a specific number of funds?
No, a government will establish the minimum number of funds consistent with legal requirements and sound financial administration
what reporting requirements are included under GASB 34?
fund based and government wide financial statement presentations supported by notes to financial statements and supplementary info, plus recon of fund financial statements to gov wide F/S
