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F9 and 10 Flashcards

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1
Q

What are the 3 requirements for an Enterprise fund?

A

When fees support debt financed by pledged fees; laws and regulations require costs be defrayed by fees ( sewage/water) ; pricing policies require recovery cots with fees (amusement park)

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2
Q

What is the basic criteria for a reporting entity for govt unit? (5)

A
  1. Financial interdependency
  2. Selection of governing authority
  3. Designation of mgmt
  4. ability to sig influence operations
  5. accountability of fiscal matters
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3
Q

How are interfund transfers reported?

A

Other financing sources (uses)

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4
Q

What fund would be a govt unit not obligated in any manner for special assessment debt?

A

Custodial fund

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5
Q

At what value are donated capital assets recorded at?

A

Fair value when received

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6
Q

What is the “Unassigned Fund”

A

Residual classification of the general fund (amt not restricted, committed, or assigned within the general fund)

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7
Q

How do you classify a “major fund”?

A

fund is either:
1. 10% of Assets, Rev, or expense of Govt or Enterprise funds
2. 5% of combined reven/expense government AND Enterprise assets, revenues, and expenses

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8
Q

What fund is always treated as a major fund?

A

General Fund

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9
Q

How are interfund receivables and payables recorded?

A

As internal balances

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10
Q

How are pledges for future years recorded (I.e pledge not received till 3 years later)?

A

Pledge receivable with Donor restrictions of present value of pledge

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11
Q

What are billings for services provided to other govt units recorded as in the internal service fund?`

A

Operating revenues

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12
Q

When is a conditional pledge to a nongovt org rec as revenue?

A

NEVER until it becomes and unconditional pledge

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13
Q

What is included in a general fund’s encumbrance amt?

A

Only o/s purchase orders (obligation to spend)

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14
Q

What is the Je to set up an encumbrance,

reverse encumbrance

Actual expenditure

A

DR: Encumbrance
CR: Budgetary control

DR: Budgetary control
CR: Encumbrance (same amt)

DR: Expenditure
CR: Voucher payable/cash (actual)

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15
Q

If encumbrances is not closed at y/e –> what is the y/e entry?

A

DR: Budgetary control
CR: Encumbrance

DR: Unassigned fund balance
CR: Fund balance, committed

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16
Q

What is an appropriation

A

Budgetary account - represents approved spending

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17
Q

What are the characteristics of Special items?

A

Unusual and infrequent

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18
Q

Where are changes in values of derivatives used as investment classified?

A

As revenues

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19
Q

Where are changes in values of derivatives for hedging classified as? (forward contract)

A

Deferred inflow/outflows

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20
Q

What are the categories of govt fund balances? (NU CAR)

A

Nonspendable fund balance - CA that cant be spent (Prepaids, inven)
Unassigned Fund balance - residual of general fund (should be positive in general fund)
Committed - assets obligated by formal action of govt highest decision-making authority (encumbered appropriations). came in unrestricted but govt council committed for certain purpose
Assigned Fund Balance - assets that govt intends to obligate (designations)
Restricted - assets restricted by external authorities (legislation, grantors, creditors)

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21
Q

What F/S should show Net Position

A

Govt -wide
Proprietary

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22
Q

What is a Reciprocal interfund activity and how are they treated?

A

Include exchange type transactions between funds

2 types:
Interfund loans - transfers
Interfund services provided/used - sales/purch –> rev/expense

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23
Q

What is a nonreciprocal interfund activity and how are they treated?

A

Represents non-exchange transactions between funds.

2 Types:
1. Interfund transfers - flow of assets b/n funds w/o exchange of equivalent value –> other financing sources and uses after nonoperating rev/expenses

  1. Interfund reimbursement - pmts made on behalf of another fund. not displayed as interfund transactions
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24
Q

What are the general fund revenue sources?

A

Taxes
Fees and fines
Shared or grant rev
investment earning

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25
What are the expenditures of general fund?
General admin functions (city mgmt, finance) Public safety Culture and rec (parks, lib)
26
What are ex of special rev funds?
Legally restricted or committed for specific purpose Sales tax fund --> to op park and tourist Gas tax fund --> op and maintain streets Special fees --> op school program Parking fees --> op traffic court) State grant --> juvi
27
What is the JE for a restricted Capital grant?
DR:Cash CR: Rev collected in advance (deferred)
28
What is a special assessment?
Taxes or fees levied against property owners who will directly benefit from project (sidewalks, street lights)
29
What two govt funds do not include encumberances?
Debt service and permanent
30
What is the BS structure for a Govt Fund?
Assets, Liab, Fund balances
31
What is the layout of a statement of rev/expen/changes in fund balances for govt balances
Revenues Expenditures (current vs, capital outlay) Other financing sources Special item
32
What are the rev sources of internal service fund
Restricted grant (recognized when spent) Op/non op rev
33
What is the layout of proprietary fund statement of net position (RUN)?
Assets (current and NCA) reduced by A/D -Liab (CL and NCL) Net position (Net inv in capital assets, Restricted for debt services, Unrestricted)
34
How are shared revenues classified in enterprise funds?
As nonope rev
35
What is the order of presentation of a proprietary fund statement of rev/ex/change in net position? (INCASET)
Income (operating) Nonoperating income/exp Captial contributions Additions to endowments Special items (unusual and infrequent) Extra ordinary items Transfers
36
What funds are included in the Govt-Wide Financials
GRaSPP and SE
37
What are the 3 characteristics of fiduciary funds?
1. Assets controlled by govt 2. Assets are not govt "Own- source" of rev 3. Assets are not subject to admin involvement by govt (if admin monitoring --> special rev)
38
What are the F/S of Fiduciary Funds?
Statement of fiduciary net position Statement of changes in fiduciary net position NO Cash flows Footnotes
39
What are the revenue additions to investment trust fund?
Contributions, net appreciation(depreciation) FV of plan assets, Real/unreal G/L, premiums/discounts on debt
40
What is the private purpose fund
reporting all other trust arrangements under which principal and income are for the benefit of specific individuals, private org, or other govt
41
what are the two types of accountability for govt reporting requirements?
Operational accountability - govt wide F/S to report govt has met the operating objectives efficiently and effectively using all resources available for purpose Fiscal Accountability - Fund FS show govt entity's actions in the current period have compiled with public decisions concerning the raising and spending of public funds in ST
42
What is the approach that Govt financials are reported? (6 things included)
Integrated approach 1. MD&A 2. Govt wide f/s (Net position, activities, no CF, fiduciary is removed) 3. fund F/s(GRasPP, Propriety, fiduciary) 4. have to reconcile, 5. Notes to FS, 6.Required supplementary info (not MD&A) like pension, budget, infrastructure )
43
What is in the annual comprehensive Financial report?
Intro section (unaudited) - org chart, list of officers Basic FS and required supp information (audited) Statistical section (unaudited) - selected Financial data and economic data
44
What are the 3 components of net position?
Net investments in capital assets- Assets less A/D, Less O/S AP. included deferred inflow/outflows Restricted (externally imposed) Unrestricted (everything else)
45
What are the 7 differences between reg cash flows and proprietary fund FS?
1. Direct method is Required (no indirect) 2. Recon of op income NOT Netincome 3. there are 4 categories (operating, capital related financing activities, non capital financing activities, investing activities) 4. Financing is before investing 5. Int income is investing (not operating) 6. Int expense/cash pmts are capital/noncapital financing instead of operating 7. Capital asset purchases is financing NOT investing
46
What is in the Capital and noncapital financing activities?
Capital financing = issuing debt w/ cap assets, capital asssets Non capital financing - ope transfers, property tax to subsidize ops
47
How are proceeds from general obligation of bond issue and transfer of general fund classified in the capital projects fund?
As other financing sources
48
What types of funds do not report cash flows?
Govt and Fiduciary
49
What are examples of cash flows from noncapital financing?
Procced/pmts related to borrowing (not for Capital assets) Cash receipts/pmts related to grants (not for capital assets) Property taxes not designated for capital asset Cash paid to other funds (not interfund services)
50
What is the reconciliation of Govt Funds statement of rev,expenditures and fund balance to the Govt wide fund balance? (CPAS RIDES)
Govt Change in fund balance +Capital outlay +Principal payments -Asset disposals - Sources (debt proceeds) +Revenue measurable but unavailable (deferred revenue) -Accrued int expense -Depreciation Expense +Internal Service Net revenue
51
What is the JE for recording capitalized asset in the govt-wide financials?
DR: Capital asset CR: Capital outlay expenditure DR: Depreciation expense CR: A/D
52
What is the JE to record a lease that will transfer for govt funds?
DR: Capital outlay expenditure CR: Other financing sources
53
Where would a bond of $5M issued at 101 and premium of $50k go in the govt funds?`
Capital projects for the proceeds LESS premium Debt service fund for premiums
54
If a general fund over spent, how would the deficit be recorded?
Negative fund balance - unassigned
55
When GASB 34 reporting stds are adopted - what should be in the FS`
1. Budget vs actual amounts for General fund and each major Special rev fund with legally adopted budget presented in Required supplementary info OR within basic FS
56
How would you transfer a lease from govt funds to a lease govt wide F/S
Original recording: DR: Capital expenditure CR: Other financing source Govt Wide DR: Capital asset CR: Capital outlay expenditure DR: Other financing source CR: Lease liability
57
At what salary rate should be used to calc liability for compensated balances at y/e for govt-wide F/S?
Rate @ balance sheet date
58
For govt-wide financials - how is the lease payment recorded for a lease that transfers ownership?
DR: Lease liability (principal) DR: Expenditures control (interest) CR: Cash
59
What are the basic financial statements according to GASB 34? (4)
1. Govt-wide F/S (statement of net position, statement of activities) 2. Fund F/S (Govt Funds --> Bs/Rev/exp/chang in fund. Proprietary funds --> statement net position, rev/exp/change in net position. fiduciary Funds --> statement of fiduciary net position, statement of changes in fiduciary net position) 3. Notes to F/S 4. Supplementary information (includes MD &A) 5. budget vs actual comparison
60
When converting Govt fund F/S to Govt-wide F/S - how is a sale of an asset treated?
NBV of the asset (not the gain)
61
Where is the portion of special assessment debt maturing in 5 years from govt fund reported?
Govt-wide statement of net position (cant keep in general bc they are current only)
62
What is the JE for an interest payment in a govt fund? and what does it decrease overall?
DR: Interest expenditure CR: Cash Decrease overall fund balance
63
What are the two objectives of govt reporting?
1. Accountability 2. Interperiod equity (can current resources cover current obligations)
64
What are the three main groups of F/S users for govt entity?
1. Citizens 2. Legislative and oversight boards (school boards) 3. Investors and creditors
65
What is SEA reporting and what does it measure?
SEA = measures of service efforts and accomplishments 1. Measure of service efforts = input (spent x to hire employees) 2. measure of accomplishments = output (hired employees responded to X calls and produced Y output) 3. Efficiency = measure of resources to achieve level of output
66
If city designates funds in the enterprise fund for future equipment - how is this reported in the fund?
Unrestricted net position
67
What funds only have "Other financing sources and uses"?
Only the govt fund
68
How is a transfer of funds from General Fund to enterprise fund recorded on both funds?
General Fund: DR: Other financing uses CR: Cash Enterprise Fund: DR: Cash CR: Non-operating revenues
69
How would a grant be recorded?
DR: Cash CR: Deferred inflow When recognized: DR: Deferred inflow CR: Rev
70
What is the entry to record payment of $300k principal and $80k interest on general longterm debt in the debt service fund?
DR: Expenditure-Principal 300 DR: Expenditure- interest 80 CR: Cash 380
71
What funds record budgets?
Only Govt funds record budget since its on the modified accrual Proprietary and fiduciary funds do not record since that are on accrual
72
For Governmental funds - what 2 things increase and decrease fund balance?
Decrease = Expenditures and other financing uses Increase = Revenues and other financing sources
73
What is the determination for a primary govt (SELF)?
Separately Elected Legally separate Fiscally independent entity of other state and local govts If no --> component unit
74
What is a component unit and what is is the difference b/n a discrete component unit and blended component unit
Component unit of primary govt which primary govt are financially accountable (not separately elected Discrete - separately elected board, does not pass SELF (fiscally dependent( Blended - one in the same board and serves the primary govt exclusively
75
For the govt wide financial statements - what funds are included and what funds are govt vs business?
Govt and Proprietary funds are included ONLY in the Govt wide F/S Govt activities for F/S = GRaSPP and internal service Business type = Enterprise
76
What part of the cash flows will include making and collecting loans/acquiring and disposing of D/E?
Investing
77
What is the entry to record tax revenues on Govt-wide F/S
DR: Deferred inflows CR: Tax revenue
78
How is construction interest recorded on the Govt wide financial statements?
Reported as int expense --> NOT CAPITALIZED
79
What is the balance sheet adjustments for Govt fund balance to Net position? (CANS)
Total Govt Fund Balance + Capital Assets (ALL) - A/D - NCL + Eliminate/reverse deferred inflows - Accrued int payable +Internal Service fund Position
80
What are the Fund F/S required for Govt funds?
Balance sheet Statement of rev, expenditures, changes in fund balance
81
What are the proprietary fund F/S required?
1. Statement of net position 2. Statement of rev, expenses, changes in fund net position 3. Statement of cash flows
82
What are the required Fiduciary Fund F/S
Statement of fiduciary net position Statement of changes in fiduciary net position
83
What Fund is most likely to have a fund balance that is non-spendable inv of supplies
general
84
In preparing enterprise fund cash flows. ID the following 1. Cash pmts to suppliers 2. interfund reimbursement for services 3. Capital outlay for water plant 4. Operating transfers out
1. Operating 2. Operating 3. Capital Financing 4. Noncapital financing
85
How would a local govt report expenses in govt-wide statement of activities?
By function or program listed
86
Where do the following go in the Govt wide FS: 1. Comparison of General fund budgets to actual to general Fund activity 2. Budget variances 3. Analysis of significant budget variances
1. RSI 2. Optional supplementary information 3. MD&A
87
What is included in the MD&A of govt F/S (4)
1. Description of F/S (analysis of results and reasons for changes from PY, analysis of sig variations in budget to original) 2. ID Primary govt and discrete component units 3. Economic conditions and outlook 4. Major initiatives (Capital asset and LTD)
88
What is included in the notes to the F/S (part of basic F/s, 5)
1. Govt activities (will describe measurable and available here) 2. Business Type activities 3. Major funds 4. Nonmajor funds in the aggregate 5. Additional info on discrete component units
89
What is included in the Required supplementary information for Govt F/S?(3)
1. Budgetary comparison reporting (original , Final, and actual) 2. Infrastructure information (modified approach) 3. Pension information
90

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