Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Becker > F8 > Flashcards

F8 Flashcards

0
Q

What are the three accounting themes addressed by governmental accounting?

A

Fund structure, fund accounting, and external reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
1
Q

Name the primary authoritative body for GAAP for governmental entities

A

Governmental Accounting Standards Board

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Identify the major categories of funds used by state and local governmental units

A

Governmental, Proprietary, Fiduciary

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What terms define the manner and timing of transaction recognition in governmental fund accounting?

A

Fund accounting principles are defined by: Measurement focus (how transactions are recognized) Basis of accounting (when transactions are recognized)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What are the objectives of external reporting?

A

Operational accountability / Fiscal accountability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What types of external reports meet the accountability objectives of government?

A

Operational accountability: Government-wide financial statements.
Fiscal accountability: Fund financial statements

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Name each governmental fund type

A

General Fund, Special Revenue Fund, Debt Service Fund, Capital Project Fund, Permenant

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What are the fund accounting principles applicable to governmental funds?

A

Current financial resources measurement focus

Modified Accrual basis of accounting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What specialized accounting practices are followed by governmental funds?

A

Budgetary Accounting

Activity (Actual) Accounting encumbrance accounting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Name and define the five classifications of fund balances used by governmental fund types

A

Nonspendable - inventory
Unassigned - available to be spent
Committed - internally limited as to use by highest
Assigned - Intended to be used for a purpose
Restricted - Legally restricted

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Name each proprietary fund type

A

Internal Service Fund, Enterprise fund

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What are the fund accounting principles applicable to proprietary funds?

A

Economic resources measurement focus

Full accrual basis of accounting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Name each type of fiduciary fund type

A

Pension trust fund, Agency trust fund, Private purpose, and Investment trust fund

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What are the fund accounting principles applicable to fiduciary funds?

A

Economic resources measurement focus

Full accrual basis of accounting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Distinguish between alternative measurement focuses

A

Current financial resources (GRSPP) - No FA are recorded, capital outlays displayed as expenditure, no depreciation, no noncurrent liabilities recorded, debt proceeds displayed as resources inflows. Principal payments displayed as expenditure. Premium & Discount on debt not amortized they are included as an increase or decrease of debt proceeds. Economic Resources (SE PAPI) FA recorded & noncurrent liabilities recorded.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Define modified accrual and list the funds that use it as a basis of accounting.

A

Modified Accrual : Revenues should be recognized when measurable and available; expenditures are generally (with the exception of interest expenditure) recognized when fund liability is incurred. Modified Accrual is used by GRSSP

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What do the terms “measurable” and “available” mean in the context of the modified accrual basis of revenue accounting?

A

Measurable means reasonably estimable or of a known determined amount. Available means collectible within (generally) 60 days of YE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

When are revenues recorded in governmental funds?

A

Measurable and available. This concept applies to accrual of diff types of revenue depending on character. Accrue when: billed/recorded(imposed nonexchange transactions) / real estate taxes (due) / Receieved(Derived non-exchange transactions) / Income & sales tax / Earned govt mandated and voluntary non exchange transactions) Restricted grants and RE taxes paid in advance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Define the different classifications of expenditures

A

Expenditure classification include: Function (public safety), Organizational unit (police dept, fire dept) Activity (drug enforcement, highway safety patrol), Character (current capital outlay, debt service, intergovernmental), Object (personal services, building occupancy, insurance)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What is the journal entry to record the annual budget?

A

Dr. Estimated Revenues / Cr. Appropriations / Dr./Cr. Budgetary Control

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Define encumbrances and give the journal entry to recognize a purchase order on supplies.

A

Encumbrance - A commitment related to an unperformed contract for goods or services (generally an open purchase order) Dr. Encumbrances Cr. Budgetary Control Encumbrances have a natural debit balance Appropriations to which those encumbrances are compared have a natural credit balance.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What journal entries are made to record the liabilities incurred associated with previously encumbered fund?

A

Expenditure of previously encumbered funds results in the following entry. Dr. Expenditure / Cr. AP / Dr. Budgetary Control Cr. Encumbrances
The entries serve to reverse the full effect of the encumbrances entry and record the full amount of the expenditure (BAE - BAE)

22
Q

When are budgetary, actual, or encumbrance entries combined?

A

NEVER. Budgetary, actual, and encumbrance transactions are always segregated on the books. Do NOT net BAE BAE. At the beginning of the year: Book budget, Throughout the year: Book actuals, book encumbrances. At YE: Close the budget, close the actuals, close the encumbrances.

23
Q

What are the closing budget, activity, and encumbrance journal entries?

A

At the Begining of the next year the above encumbrance entry is reversed. the entry will keep the budgetary control intact in order to account for resources spent in the next year that would have been budgeted in the current year.

24
Q

Journal entry to recognize supplies remaining at year-end.

A

Purchase method: Dr. Supplies on hand inventory Cr. Fund balance, non spendable. This journal entry indicates that these supplies are not available spendable resources. Consumption method: No entry may be needed as supplies were debited to inventory and then recognized as an expenditure as they were used. Corresponding entry changing the related nonspendable classification of fund balance should have been done as each use of inventory was recorded.

25
Q

List the types of transactions that qualify for treatment as deferred outflows of resources (reported after assets) or deferred inflows of resources (reported after liabilities)

A

Changes in fair value of hedging derivative instruments. Resources to be reported by a transferor government in a qualifying service concession agreement. Other deferred outflow/inflow of resources.

26
Q

What is the purpose of the general fund?

A

The general fund is created at the beginning of the governmental unit and it exists throughout the life of that unit. The general fund accounts for the general activities of a governmental unit that are not accounted for by any other fund. The general fund is always a major fund.

27
Q

What are the typical revenue sources of the general fund?

A

Taxes (property taxes), public safety & regulations (fines, inspection fees, etc) intergovernmental (shared revenues), charges for services, other revenues (interest income)

28
Q

What is the purpose of the special revenue fund?

A

Special revenue funds account for revenues and expenditures that are restricted or committed for a specific purpose. The life of a specific revenue fund may be limited or unlimited.

29
Q

What are the typical revenue sources of a special revenue fund?

A

Intergovernmental revenues (sales taxes or gasoline taxes restricted for use. Intergovernmental revenues (grants and other financial assistance provided for a specific purpose) Specific fees (parking fees, museum admission fees, etc) Seizure of assets surrended as a result of illegal acts (Forfeiture Act)

30
Q

What is the purpose of the debt service fund?

A

The debt service fund is created to account for the accumulation of restricted, committed, or assigned resources (cash and investments) for the payment of currently due interest and principal on a long term general obligation debt. Debt service fund pays GRSPP debt not SE PAPI debt.

31
Q

What are the typical components of revenue and OFS classifications for debt service funds?

A

Revenue : Investment Income / Taxes levied specifically for debt repayment Other Financing Sources: Transfers from other funds to meet bond indenture requirements. Debt proceeds associated with refunding of debt.

32
Q

What is the purpose of the capital project fund?

A

Capital project funds are established to account for resources restricted committed or assigned for the construction or purchase or leasing of significant fixed assets used by the GRSSP funds. Capital project funds are not used for SE PAPI funds.

33
Q

What are typical components of revenue and OFS classifications for capital project funds?

A

Revenues: Investment earnings, tax revenues specifically levied to fund capital improvements. Other Financing Sources: Debt proceeds used to fund construction. Transfers from other funds.

34
Q

What is the purpose of the permanent fund?

A

Permanent funds are used to report resources that are legally restricted to the extent that only earnings and not principle may be used for the purposes that support the reporting governments program.

35
Q

What are the required fund financial statements for the individual governmental fund types?

A

GRSPP Funds require: Balance Sheet / Statement of revenues expenditures & changes in fund balance.

36
Q

What is the basic structure of the balance sheet for the governmental funds?

A

Assets + Deferred outflows of resources = Liabilities + deferred inflows of resources + fund balance

37
Q

What is the purpose of the internal service fund?

A

Internal service fund are established to finance and account for services and suplies provided exclusively to other departments within a governmental unit or to other governmental units, typically on a cost reimbursement basis. Major fund reporting do not apply to internal services fund.

38
Q

What are typical revenue sources for internal service funds?

A

Operating revenues
Charges for services provided to other funds (These charges are not transfers or other financing sources.) Nonoperating revenues - Investment income & Grant Revenues.

39
Q

What is the purpose of the enterprise fund?

A

Enterprise funds are used for operations that are financed and operated in a manner similar to a private business enterprise. Activities should be reported in enterprise funds if the activity is funded by debt secured by a pledge of net revenues from fees and charges, laws require that activitiy of fees or fees are designed to recover costs.

40
Q

What are typical revenue sources for enterprise funds?

A

Operating revenues - Charges for services (utility fees, patient fees, tuition, other exchange-type fees) Non operating revenues - Shared/grant revenues & Investment Income.

41
Q

What are the required fund financial statements for the individual proprietary fund types?

A

Statement of net position, Statement of revenues, expenses, and changes in fund net position, statement of cash flows.

42
Q

What are the alternative structures of the statement of net position for the proprietary funds?

A

Alternative structures : Balance Sheet (Assets+Deferred outflows of resources)=(Liabilities+Deferred inflows of resources) + Net position OR Net Position / (Assets+Deferred outflow of resources) - (Liabilities+Deferred inflow of resources) = Net position

43
Q

What is the basic structure of the statement of revenues, expenses, and changes in net position for the proprietary funds?

A

Operating revenue (Revenue by major source) Operating Expenses / Operating Income (loss) Nonoperating revenues (expenses) Income or loss before contributions and transfers Capital Contributions Transfers Outs = Change in net position

44
Q

What is the basic structure of the statement of cash flows for the proprietary funds?

A

Cash flows from operating activities
Cash flows from noncapital financing activities
Cash flows from capital financing activities
Cash flow from investing activities.

45
Q

What is the purpose of the pension trust fund?

A

Pension and other employee benefit trust funds account for government sponsored defined benefit and defined contribution plans and other employee benefits such as post retirement health care benefits.

46
Q

What are the unique note disclosures and required supplemental information reporting associated with pension funds?

A

Note disclosures - plan descriptions, contributions and reserves, risk concentration RSI - Schedule of funding progress (last 6 years) Schedule of employer contributions (last 6 years) Notes to support the schedules.

47
Q

What is the purpose of the agency trust fund?

A

An agency fund collects cash to be held temporarily for an authorized recipient to whom it will later be disbursed. This recipient may be another fund or some individual or fund or even government outside of the reporting government.

48
Q

What is unique about agency fund revenues and expenses?

A

Agency funds do not report revenues and expenses, only assets & liabilities.

49
Q

What is the purpose of the private purpose trust fund?

A

The private purpose trust fund is the designed fund for reporting all other trust arrangements under which principal and income are for the benefit of one of the following: specific individuals, private organizations, and other governments.

50
Q

What is the purpose of the investment trust fund?

A

Investment trust fund accounts for external investment pools sponsored by a governmental entity. Ex: A state may act as the investment agent for counties and cities. The investments “external” to state government those administered on behalf of the counties and cities are reported in an investment trust fund.

51
Q

What are the required fund financial statements for the individual fiduciary fund types?

A

MOST PAPI funds require a statement of fiduciary net position, statement of changes in fiduciary net position. (Note: Agency funds the “A” in PAPI do not require this statement.

52
Q

What is the basic structure of the statement of fiduciary net position for the fiduciary funds?

A

Net Position = (Assets + Deferred outflows of resources) - (Liabilities+Deferred inflows of resources) = Net position. Note : For fiduciary funds, there is no option to present a traditional balance sheet format in which asset accounts are displayed as equal to the sum of liability and equity accounts.

53
Q

What is the basic structure of the statement of changes in fiduciary net position for the fiduciary funds?

A

Additions = Changes in net position

Becker (10 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions