FAR9 Flashcards
FAR9 (39 cards)
In governmental accounting
Accrue for payroll recorded:
DR Payroll Expenditures
CR Accrued Payroll Liabilities
City estimated 5% revenue will be uncollected
Receivable-THE SAME
Revenue-LESS
Salaries and wages incurred by general fund JE
DR Expenditures Control
CR Vouchers Payable
Primary difference b/w purchase and consumption method of accounting for inventory
The purchase method initially records purchase/additions as expenditures
the JE to record lease for agreement other than short term lease for lessor
DR Lease Receivable
CR Deferred inflows of resources
JE
DR Right of use asset
CR Lease liability
JE for Lessee
Proprietary fund entering into agreement as lessee for lease other than a short term lease and contract that transfers ownership
If lease financed with internal service revenue fund
DR Lease liability (principle)
DR Expenses control (interest)
CR Cash
If equipment is used in enterprise fund operations and financed with enterprise fund revenues and lease transfer ownership
DR Equipment
CR Liability
Estimated Revenues
Taxes
Fines and Penalties
Estimated Other Financing Sources
Interfund Transfers Debt Proceeds (bonds and notes)
Actual expenditures are not relevant to the amount of appropriation
Estimated expenditures are appropriations- money set aside for specific purpose
The initial entry to set up the encumbrance
DR Encumbrances
CR Budgetary Control Account
Budgetary control account functions as
Constraint (ogranichenie) that reduces fuds availability
Appropriation – is the amount of money set aside from the budget to pay for certain budgetary line items. … Encumbrances – an encumbrance is a reservation of the appropriation for a specific item. Most expenditures are required to be encumbered before a legal obligation is made to pay for the item.
Encumbrances – an encumbrance is a reservation of the appropriation for a specific item. Most expenditures are required to be encumbered before a legal obligation is made to pay for the item.
City reported $500k in appropriation $100k in encumbrances $300k in expenditures (Gov funds) $75k in voucher payable
$500k originally available
$300k already spent on other items
$100k set aside on other items
$100k available
Governmental FS Classification (like IS):
Character
Function
Object
- Character (when?) for Governmental Funds Current FY
- Function (purpose?) Public safety
- Transfers (Other financing source)
- Object (enterprise expenses-salary)
In Governmental Accounting
NO LTD
NO LT Assets
Expenditures Concept
Depreciation Expense booked only in Governmental wide FS
No Depreciation expense in Governmental Fund! Fixed asset expensed.
General fund JE to record lease without transferring ownership
- Lease execution (oformit)
DR Capital outlay
CR Other financial source (year lease payment*annuity factor) - Lease payment
DR Debt Service Expenditures-Principle (PLUG)
DR Debt Service Expenditures-Interest (Implicit rate e.g.10%Total OUTSTANDING Lease OBLIGATONannuity due)
CR Cash - No JE for lease amortization
Purchase method to establish supply inventory. Purchased supplies for $5K, in the year end $2k was not spend
1. DR Expenditure CR Cash 2. Supplies not used DR Supplies/Inventory CR Fund Balance-non-spendable
PO was issued. Record in modified accrual accounting only.
Encumbrance- government obligation to spend money.
1. Record PO DR Encumbrance CR Budgetary control 2. To recognize satisfaction of PO Reverse JE 1 THE SAME AMOUNTS! 3. Record actual expenditures
Remember BAE-BAE
Lapse- istekat’
For Budgetary accounting initial JE should be reversed
JE to record lease establishment
Proprietary fund
DR ROU asset
CR Lease liability
Governmental fund
DR Capital outlay expenditures
CR Other financial sources
Encumbrances outstanding at year end in states general fund
Liabilities in general fund
