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Becker FAR > F8 > Flashcards

F8 Flashcards

1
Q

Dual Objectives for Governmental Accounting

A
  1. Operational Accountability
  2. Fiscal Accountability
  3. Timeliness
  4. Consistency
  5. Comparability
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2
Q

When is governmental accounting used?

A

*when there exists financial control and/or legal restrictions

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3
Q

Who establishes principles and standards for NFPs?

A

*the FASB; GASB is only for governmental accounting

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4
Q

Three General Types of Government Funds

A
  1. Governmental
  2. Proprietary
  3. Fiduciary
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5
Q

Government-Wide Presentation

A
  • full accrual

* economic resources measurement focus

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6
Q

Governmental Funds - Guiding Principles

A
  • modified accrual system

* current financial resources measurement focus

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7
Q

Types of Governmental Funds

A
  1. General Fund
  2. Special Revenue
  3. Capital Projects Fund
  4. Debt Service Fund
  5. Permanent Fund
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8
Q

Types of Proprietary Funds

A
  1. Internal Service Fund

2. Enterprise Fund

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9
Q

Types of Fiduciary Funds

A
  1. Pension
  2. Agency Trust Funds
  3. Private Purpose Trust Fund
  4. Investment Trust Funds
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10
Q

Fund Balance Designations for Governmental Funds

A
  1. Unrestricted
  2. Committed
  3. Assigned
  4. Restricted
  5. Non-spendable (inventory, etc.)
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11
Q

Net Position Designations for All Other Funds

A

R estricted
U nrestricted
N et investment

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12
Q

Which is the only fund that will have a positive unassigned balance?

A

*the general fund

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13
Q

When setting up a budget for a governmental fund, where does the net difference go?

A
  • budgetary control (DR or CR)

* remember that budgetary accounts are on the opposite side of the T account

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14
Q

Revenue Recognition for Derived and Imposed Revenues

A

Derived = revenue when measurable and available

Imposed - enforceable legal claim; when their use is required or first permitted

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15
Q

When recording receivables for governmental funds, is there bad debt associated with the allowance?

A

No; revenue is just decreased

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16
Q

Journal Entry to Reclassify Current Allowance into Delinquent Allowance

A

DR: (Revenue - cash proceeds)
DR: Allowance - current
CR: Allowance - delinquent

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17
Q

Purchase Method vs. Consumption Method

A 
Purchases = all to expenditure and then adjust inventory and fund balance
Consumption = record inventory and expenditure over time
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18
Q

Classification of Governmental Expenditures

A
  1. Function Program
  2. Organizational Unit
  3. Activity
  4. Object Class
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19
Q

Encumbrances and actual expenditures impact which amount?

A

*unexpended appropriation

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20
Q

How is hedge accounting accounted for in governmental accounting?

A

*utilizes deferred inflows and deferred outflows

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21
Q

Refunding of Debt & Deferred Inflows/Outflows

A
  • difference between reacquisition price and net carrying amount is a deferred outflow or inflow
  • recognized as a component of interest expense over the shorter of the life of the old or new debt
22
Q

How should assets associated with revenue that is not available but is measurable be treated?

A

*deferred inflow of resources if it is more than 60 days after year end

23
Q

When are taxes recorded as revenue in the general fund?

A

*when they are recorded and billed AND owed

24
Q

Which type of funds does the Statement of Revenues, Expenditures, and Changes in Fund Balance relate to?

A

*governmental funds

25
Q

Purpose of the Special Revenue Fund

A
  • revenues and expenditures that are legally restricted or committed for specific purposes
  • forfeited property goes here
26
Q

Two Special Indicators that Agency Fund is Used

A
  1. government is not liable on contract

2. non-monitoring role for funds

27
Q

Which funds does the debt service fund serve?

A

ONLY governmental funds; enterprise funds fund themselves

28
Q

Account used when there is a mandatory transfer of funds

A

*interfund transfers from/to xyz fund

29
Q

Are encumbrances used in the debt service fund?

A

No

30
Q

Does the debt service fund have amortization of a discount or premium?

A

No

31
Q

Limitation on the life of capital project funds

A

*projects that have a construction period of 1 to 3 years

32
Q

If the primary government is not primarily liable for a special assessment, should the asset be reported on the books of the government-wide financial statements?

A

No

33
Q

When bond issue proceeds include a premium, list that premium amount as a separate __________

A

other financing source

34
Q

Short-term Borrowing (two methods)

A
  1. Cash & Other Financing Source
  2. If it is to be repaid with taxes
    * *DR: Cash
    * *CR: Tax or revenue anticipation note payable
35
Q

If encumbrances still exist at the end of the year in a capital project’s fund, how will it be classified?

A

*the original journal entry will be reversed and it will be reported as being RESTRICTED

36
Q

Are interest and principle expendable in special revenue funds?

A

Yes

37
Q

Are interest and principle expendable in permanent funds?

A

No, only the interest is expendable

38
Q

Key word for identifying an internal service fund

A

*CENTRAL

39
Q

Are internal service funds governmental or business-type funds on the government-wide financial statement

A

governmental

40
Q

Key word for identifying an enterprise fund

A

PUBLIC (if it was private, it would be NFP)

41
Q

Shared Revenues

A

*shared revenues are revenues collected by one government and shared on a predetermined basis with another government; they are nonoperating to the local government

42
Q

Proprietary Statement of Revenues, Expenses, and Changes in Fund Net Position Order

A 
I ncome 
N onoperating income and expense
C apital contributions
A dditions to endowments 
S pecial items (unusual or infrequent)
E xtraordinary items 
T ransfers
43
Q

How is the receipt of capital assets in a non-reciprocal interfund activity recorded?

A

DR: Capital asset
CR: Capital contributions

44
Q

Cost components of a Municipal Landfill

A
  1. equipment to be installed and facilities expected to be constructed near or after the date that it will stop accepting waste
  2. cost of gas monitoring system
  3. final cover (capping) costs

*portion should be expensed and a liability should be increased

45
Q

How to account for AGE components in the Pension Fund

A

deferred outflows or deferred inflows of resources

46
Q

Difference between Pension Fund and Proprietary Fund

A 
Pension = cash flow statement not required
Proprietary = cash flow statement required
47
Q

Agency Trust Fund Financial Statements

A

*ONLY Statement of Fiduciary Net Position

48
Q

Private Purpose Trust

A

Benefits:

  1. specific individuals
  2. private organizations
  3. other governments

*escheat property goes here

49
Q

Capital Gains/Losses Treatment for Private Purpose Trust

A

*increase/decrease principal and are not reported in income

50
Q

Investment Trust Fund

A
  • government entity that sponsors one or more external investment pools that each must be reported separately
  • statement of cash flows not required

Becker FAR (10 decks)

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