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FAR 7 Flashcards

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1
Q

GASB

A

Governmental accounting standards board

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2
Q

GASB IS establishes GAAP for

A

Governmental organisation

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3
Q

Hierarchy of authoritative GAAP related to local and state government is

A

Category A
Gasb statement
GASB interpretation

Category B
GASB technical bulletin
GASB implementation guides
Aicpa literature cleared by gasb

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4
Q

Governmental accounting and reporting applies to

A
  • government units (village, municipal, townships)
  • governmental entity which is governed by the government
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5
Q

Objectives of governmental financial reporting primary is

A

Accountability

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6
Q

Dual objective

A
  • operational accountability reflected in government wide f/s
  • fiscal accountability reflected in fund f/s
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7
Q

Primary user of governmental statement is

A

Citizens, legislative and oversights and investors and creditors

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8
Q

Qualitative characteristic if governmental f/s

A
  • understandability, reliability, relevance, timeliness and comparability
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9
Q

Limitation for governor f/s

A

Cost benefits

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10
Q

Reporting entity =

A

Primary government + components units

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11
Q

Primary government =

A

Government funds + proprietary funds + fiduciary funds

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12
Q

Component units =

A

Autonomous legally separate units that should satisfies these 2
- the raise in units and hold economic resources fir direct primary benefits
- close financial relationship with the primary government

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13
Q

Government - wide statement has

A

Governmental funds and proprietary funds

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14
Q

Fund f/s has

A

All 3 government funds , proprietary funds and fiduciary funds

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15
Q

Governmental reporting and presentation requirements

A
  • management discussion and analysis
  • government - wide f/s (accrual)
  • funds f/s
    1. Government funds
    2. Proprietary funds
    3. Fiduciary funds
    4. Component units
  • notes to f/s
  • required supplementary other than md and a
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16
Q

Fund types

A

3 types
- government funds
- proprietary funds
- fiduciary funds

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17
Q

Government funds types

A
  • general fund
  • special revenue fund
  • capital project fund
  • debt service fund
  • permanent fund
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18
Q

Proprietary funds

A
  • internal service fund
  • enterprise fund
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19
Q

Fiduciary funds

A
  • pension trust
  • investment trust
  • private purpose trust
  • agency fund
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20
Q

Government funds are

A

Modified accruals
( b/s + statement of revenue, expense and change in fund balance)

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21
Q

Proprietary funds are

A

Accrual based (economic resource approach)
- statement of net position + statement of activity + statement of cash flow

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22
Q

Fiduciary funds are

A

Accrual based
- statement of fiduciary net position + statement of change in fiduciary net change

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23
Q

Government funds need to use

A

Modified accrual accounting and current financial resource approach

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24
Q
A
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25
General fund
Not accounted or reported in another funds
26
Special revenue funds
Proceeds of specific revenues sources that are legally restricted to exoenses fir specific purpose ( other than debt service and capital project)
27
Capital project funds
Acquisition or construction of capital facilities
28
Debts service funds
Payment for general long term debts principle and interest
29
Permanent fund
Restricted to an extent that only earnings may be used fir purpose that supports the government program
30
How many times a government funds be used
- one general fund - multiple special revenue, capital project and permanent funds - if only needed debt service fund
31
Proprietary funds uses
Accrual accounting and economic resources approach
32
Internal service funds
Activity that provide goods and services internally to other funds, department of a primary government and it’s component units
33
Enterprise funds
Activity fir which a fee us charged to external user for a fee Should meet any one criteria to be an enterprise funds
34
How many times proprietary funds can be used
Multiple time it can used both internal service fund and enterprise funds
35
36
Fiduciary funds use
Accrual accounting and economic resource approach
37
Types if fiduciary funds
Pension trust Investment trust Private purpose trust Custodial funds or agency funds
38
Modified accrual accounting is only for
Governmental funds
39
Under modified accrual accounting there are three types
1. Budget accounting- use to control spending 2. Activity - represent flows if current resources 3. Encumbrance - use to record purchase order
40
Measurement principle under modified accrual accounting
Revenue - when it is measurable and available to spend Cost - expenditure principle recorded in the period obligation to pay
41
Fund balance classification under modified accrual
Reserved and unreserved fund balances
42
Reserved fund balance
Non spendable - that are not spendable Restricted - funds that are externally restricted Ir law Committed - funds restricted internally Assigned - funds neitger restricted nor committed but are reserved by the government intents to be used fir specific purpose
43
Unreserved fund balance
General fund balance not restricted committed or assigned to specific purpose
44
Budgetary accounting
They are developed at the beginning if each year and reversed at the close of year end
45
Expected sources and uses
Estimated revenue, estimated other sources , appropriation and estimated other uses
46
J/e fir budget accounting
Estimated revenue Estimated other sources To budgetary fund balance- unreserved To appropriation To estimated other uses
47
Activity accounting it has four parts
1. Revenue- recognise when it is measurable and available 2. Expenditure - recognise all spending’s 3. Fixed assets - expenditures 4. Debts - treat as revenue from other financing sources
48
Revenue under activity
Recognise when it is measurable and available to spend
49
Exchange revenue
Exchange fir equal value
50
Non exchange revenue
- derived - self assessed taxes - imposed - taxes and asses on assets or rights - government mandated - amt received from another govt entity fir specific purpose - voluntary - amt received willing by another party
51
Recognise revenue when fir each category
1. Derived - recognise when received 2. Imposed - property tax - billing Fines and penalty- billing License and permits - received 3. Government mandated - eligible 4. Voluntary - eligible
52
Expenditure
It focus on the outflow of resources
53
J/e fir expenditure
Expenditure To voucher payable
54
Encumbrance
Is an open purchase order placed with vendor
55
J/e fir purchase order issued
Encumbrance To budgeted fund balance - reserved fir encumbrance
56
J/e when received supplies
1. Cancel the budgetary entry Budgetary fund balance - reserved To encumbrances 2. Expense Expenditure To vouchers payable
57
J/e fir payment to vendor
Voucher payable To cash
58
Year end closing j/e fir encumbrance
If something remains Budgetary fund balance - reserved To encumbrance To reverse it to reserved Budgetary fund balance - unreserved To budgetary fund reserved
59
Inter fund transactions types
1. Operating transfers 2. Quasi external transfer 3. Reimbursement 4. Loans
60
Operating transfer
Transferor report the amount paid as other financing uses Transferee report the amt paid as other financing sources
61
Quasi external transactions
Sakes and purchase of goods and service between funds fir a price Transferor - report as expenditure Transferee - reports as revenue

FAR (8 decks)

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