F8: Governmental Accounting Overview Flashcards Preview

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Flashcards in F8: Governmental Accounting Overview Deck (35):
1

What are two items lead to the use of fund accounting by governmental organizations?

1- Spending purpose (legal restrictions)
2- Spending limits (budget and financial control)

2

The purpose of separate fund financial statements for governmental and proprietary funds:

To report additional and detailed info about the primary government

3

2 Objectives for governmental and non-for-profit reporting

1- Demonstrate their operational accountability
2- Show their fiscal accountability

4

Primary purpose of fund accounting

Enables service and mission-driven organizations to easily monitor and report compliance with:
-Spending purposes (legal restrictions)
-Spending limits (budget)
-and other fiscal accountability objectives

5

External fund reporting is allowed for what?

Governmental units

6

What cannot use external fund reporting?

Non-for-profit (they use it for internal accounting only)

7

Types of industries that use governmental or non-for-profit accounting and reporting principles

-Governmental units
-Colleges/universities
-Health care organizations
-Voluntary Health and Welfare organizations
-Foundations
-Other NFP organizations

8

GASB

"Governmental Accounting Principles and Standards Board"
-the governmental counterpart of FASB

9

What accounting principles and standards are used for non-for-profits?

FASB

10

GAO and its role

"Government Accountability Office"
-Prescribes government auditing standards (yellow book standards)

11

Single Audit Act

Allows for frequent audits of federal financial assistance awarded

12

3 Themes of Governmental Accounting:

1- Fund structure
2- Fund accounting
3- External reporting

13

Definition of a Fund:

Think "like a checkbook"
- sum of money segregated for the purpose of carrying on a activity
- each fund is a self-balancing set of accounts

14

What defines fund structure for governments?

GASB 34

15

11 fund types are classified in the GASB 34 in what three categories?

1- Governmental Funds
2- Proprietary Funds
3- Fiduciary Funds

16

Fund financial statements should be presented how for governmental, proprietary, and fiduciary funds?

Separately

17

GASB establishes what?

Minimum reporting requirements

18

What type of reconciliation is required?

A presentation of a reconciliation of fund f/s to government-wide f/s
-Government-wide = consolidated f/s
-Major fund f/s = like segmented reporting

19

Governmental Funds are "MAC-GRaSPP"

Modified
Accrual accounting
Current financial resources measurement focus (no FA or LTD)
GRaSPP

20

GRaSPP

G-General fund
R- special Revenue funds
and
S- debt Service funds
P- capital Project funds
P- Permanent fund

21

Proprietary and Fiduciary Funds have "SPACE"

S- SE
P- PAPI
A- Accrual accounting
C- Carry fixed asset and long-term debt
E- Economic resources measurement focus

22

Proprietary Funds "SE"

S- internal Service funds
E- Enterprise funds

23

Fiduciary Funds "PAPI"

"trust funds"
P- Pension and other employee trust funds
A- Agency trust funds
P- Private purpose trust funds
I- Investment trust funds

24

2 of the most significant reconciling items between governmental funds and government-wide financial statements:

1- adding fixed assets
2- subtracting non-current liabilities

25

Net position is analyzed and reported in 3 components:

1- Net investment in capital assets
2- Restricted
3- Unrestricted

26

How to record revenues & expenses under "Modified Accrual"

Revenue- recognized when measurable and available
Expenses- recorded when the related fund liability is incurred

27

How to record revenues & expenses under "Full Accrual"

Revenue- recognized when earned
Expenses- recognized when incurred

28

Saying revenue is available means:

Collectible within the current period or within 60 days after year-end

29

5 Degrees of Constraint with the classification of governmental fund balances

"NU CAR"
N- non-spendable fund balance
U- unassigned fund balance
C- committed fund balance
A- assigned fund balance
R- restricted fund balance

30

Non-spendable fund balance examples

prepaid expenses, inventories, etc.

31

Unassigned fund balance thing to remember

Only the general fund should have a positive unassigned fund balance

32

Committed fund balance examples

Resolutions, encumbered appropriations, etc.

33

Assigned fund balance

Government tends to obligate but has not formally committed

34

Restricted fund balance

Restricted by external authorities

35

What is the measurement focus and basis of accounting for the government-wide financial statements?

-Economic resources measurement focus
-Accrual basis of accounting