F6 M6 Governmental Fund Structure and Fund Accounting

Question 1

how are governmental funds accounted for?

Answer 1

modified accrual basis of accounting and current financial resources measurement focus

Question 2

what are the governmental fund types? (GRaSPP)

Answer 2

general fund
special revenue fund
debt service fund
capital project fund
permanent fund

Question 3

what is a general fund?

Answer 3

funds used to finance regular operations

Question 4

what is a special revenue fund?

Answer 4

revenues financed to particular government activities

Question 5

what is a debt service fund?

Answer 5

used to pay on debt principal and interest

Question 6

what is a capital project fund?

Answer 6

used for acquisition or construction of capital asset

Question 7

what is a permanent fund?

Answer 7

income is restricted to support government programs

Question 8

how are proprietary funds accounted for?

Answer 8

full accrual basis of accounting and economic resources measurement focus

Question 9

what fund types do proprietary funds use?

Answer 9

internal service funds
enterprise funds

Question 10

what is an internal service fund?

Answer 10

goods and services provided by departments to other departments on cost-reimbursement fee basis

Question 11

what is an enterprise fund?

Answer 11

for acquisition and operation of government facilities through user charges

Question 12

when are enterprise funds required? (3)

Answer 12

1) activity financed by debt by pledge of fee revenue
2) law requires collecting fees to cover costs
3) pricing policies used to generate fees to recover costs

Question 13

how are fiduciary funds accounted for?

Answer 13

full accrual basis of accounting and economic resources measurement focus

Question 14

what fund types do fiduciary funds use?

Answer 14

custodial funds
investment trust funds
private purpose trust funds
pension and other employee benefit trust funds

Question 15

what is a custodial fund?

Answer 15

resources in temporary custody of governmental unit

Question 16

what is an investment trust fund?

Answer 16

for external investments

Question 17

what is a private purpose trust fund?

Answer 17

assets used to provide benefits to recipients based on benefit terms and protected from creditors

Question 18

what is a pension and other employee benefit trust fund?

Answer 18

for defined benefit plans, defined contribution plans, post-employment benefit plans, and other LT benefit plans

Question 19

the modified accrual basis is used with…

Answer 19

current financial resources measurement focus

Question 20

the full accrual basis is used with…

Answer 20

economic resources measurement focus

Question 21

what is a measurement focus?

Answer 21

it determines the items to be reported on the B/S

Question 22

what does the current financial resources measurement focus on for the B/S?

Answer 22

available, spendable and appropriate funds, so only current assets and liabilities

Note: no non-current assets and liabilities (no fixed assets or non-current liabilities)

Question 23

what does the economic resources measurement focus on for the B/S?

Answer 23

costs of service and efficiency of using invested capital; current and non-current assets and liabilities reported; net position in three components: net investment in capital assets, restricted, and unrestricted

Question 24

what does the basis of accounting determine?

Answer 24

when revenues and expenses are recognized

Question 25

what does available and measurable regarding revenues and expenses mean under modified accrual basis? how about full accrual?

Answer 25

revenue: collectible in current period or within 60 days after year end; measurable is in monetary terms expenses: when it is incurred, except for debt, which is either due or paid (not accrued) full accrual: when it is earned; when incurred