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FAR -My Own > GOV Accounting > Flashcards

GOV Accounting Flashcards

1
Q

Definition of Fund

A

A Fund is a sum of money or other resource segregated for the purpose of carrying on a specific activity or attaining certain objectives in accordance with specific regulations, restriction or limitations, constituting an independent fiscal and accounting entity. Each fund is a self balanced set of accounts .

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2
Q

Govt Fund Reconciliation

A

Govt. fund f/s are reconciled to the governmental activities section of the govt -wide presentation

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3
Q

Enterprise Funds

A

Enterprise funds are carried into the business type activities section of the government wide F/S, generally with no reconciling items

Definition - Accounts for the acquisition and operation of governmental facilities and services that are intended to be primarily ( over 50%) self supported by user charges. Costumers are primarily external.

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4
Q

Internal Service funds

A

Internal service funds are often merged with governmental activities displayed in the Govt- wide financials

Definition- Accounts for goods and services provided by designated department on fee basis to other department and agencies with a single governmental unit or other governmental unit

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5
Q

Fiduciary Funds

A

Fiduciary funds are presented individually as fund financial statements, but are excluded from the government- wide financial statement presentation.

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6
Q

Governmental Funds

A
  1. Modified accrual accounting
  2. Current financial resources measurement focus

The source, use and balance of the governments currents financial resources and the related current liabilities are accounted through use of governmental funds

  1. General Funds
  2. Special Revenue Funds
  3. Debt Service Funds
  4. Capital Projects Funds
  5. Permanent Fund

GRaSPP

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7
Q

Proprietary Funds

A
  1. Full Accrual Accounting
  2. Economic resources measurement focus

Proprietary funds account for business types activities and their accounting is similar to commercial accounting . Property funds include

  1. Internal Service funds
  2. Enterprise funds

SE

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8
Q

Proprietary Funds presentation

A

Statement of Net Position

All assets and deferred outflows of resources
(All liabilities and deferred inflows of resources)
= Net Positon

Statement of revenues, expenses and changes in fund net position

Operating revenue
(operating expenses)
Non-operating revenue ( Expense)
= Change in Net Postion

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9
Q

Fiduciary ( Trust funds) fund

A
  1. Full accrual Accounting
  2. Economic resources measurement focus

Fiduciary funds account for assets received where the government acts in the capacity of trust or agency fund. Fiduciary Funds include

A. Pension Trust Funds
B. Agency Trust funds
C. Provate purpose trust fund
D. Investment trust funds

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10
Q

Government -wide Presentations

A
  1. Full accrual accounting
  2. Economic resources measurement focus

Govt. Wide F/S convert disaggregated fund based F/S using multiple measurement focuses and basis of accounting to a single single consalidated set of financial statements with use the full accrual basis of accounting and the economic resource measurement focus

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11
Q

Governmental Funds

A

Governmental funds often have a budgetary focus, and seek to measure financial positions and the changes therein. The main F/S is the statement of revenues, expenditures, and changes in fund balance which is used to demonstrate compliance with laws, rules and regulations

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12
Q

Current Financial Resources -B/S

A

The current financial resources measurement focus seeks to value and report fund balances as a measure of available, spendable or appropriable. Only current assets and liabilities are included in B/S

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13
Q

Economic Resources - B/S

A

The economic resources measurement focus seeks to determine the cost of services and the efficiency and effectiveness with with invested capital has been used

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14
Q

Governmental Modified Accrual

A
  1. Budget
  2. Activity
  3. Encumbrances

Encumbrance accounting is used to record purchase order

There is no profit motive in any governmental fund thus there is no income determination

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15
Q

Modified Accrual - Budgetary Accounting J/E

A

Budgetary accounts are “estimated accounts” which are the opposite ( in term of “natural” debit and credit balances ) from real “proprietary” or actual accounts

Budgetary accounts are posted only twice doing the year

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16
Q

Governmental Fund Revenue

A

Governmental fund revenues are recorded when measurable and available. This usually means the collection period does not excced 60 days after fiscal year end.

Governmental fund revenues often arise from non-exchange transactions. A non-exchange transaction is defined by GASB 33 as a transactions in which a goverment gives and receives value without directly giving and receiving equal value in return.

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17
Q

Derived Tax Revenues

A

Derived (non-exchange) tax revenues represent taxes imposed on or derived from exchange transactions such as commercial sales, taxpayer income

Revenues are recognized when measurable and available

18
Q

Imposed no-exchange revenues

A

Imposed on non-exchange transactions (fines) or wealth ( property tax)

Receivables are recoded when the government has an enforceable legal claim

19
Q

Voluntary Non-exchange transactions

A

Voluntary non-exchange transactions represent instances in which the government receives resources and does not provide equal value

Revenues are recognized when grant restrictions have been met and when resources are measurable and available.

20
Q

Expenditure

A

Operating and capital transactions are considered expenditure in governmental fund type

The timing of expenditure recognition is governed by when the voucher payable is recorded. the modified accrual basis of accounting does not delay the expenditure until the cash payment is made.

21
Q

Alternatives for Expenditure for Recognition

A
  1. Purchase Method
    Expenditure current assets when purchased
    use of item during the year - No Entry
    Reverse for items not used during period (still on hand)

Consumption Method
Set up as a C/A when purchased
Expenditure items as consumed
No entry - end of the year

22
Q

Govt. Derivatives and hedge accounting

A

Derivatives are reported at fair value
Changes in value of derivatives used as investment are displayed within the investment revenue classifiaction and its reported either deferred outflows or deferred inflows

23
Q

General Fund

A

The general fund is created at the beginning of the governmental unit, and it exists throughout the life of that unit. The general fund usually has the largest share of revenues in a governmental unit.

Sources of general fund revenues frequently include

  1. Taxes 2. Public safety and regulation
  2. Inter-governmental 4. charges for services
  3. Other Revenues
24
Q

General Fund - Expenditure types

A

The general fund usually has the largest share of expenditures in a governmental unit and frequently include current functional expenditure

  1. General Government 2. Public Safety
  2. Culture and Recreation
25
Q

Special Revenue Fund

A

Special revenue funds account for revenues and expenditures that are legally restricted or committed for specific purposes other than debt service or capital projects. The life of the special revenue fund may be limited or unlimited but resources are expendable.

26
Q

Expendable Trust Activities

A

Expendable trust activities ( scholarship and endowment funds ) represent funding whose principle and income may be expended in the course of their designated operations so that they are depleted by the end of their designated lives

27
Q

Debt Service Fund

A

The debt service fund is created to account for the accumulation of resources ( cash and investment) and the payment of currently due interest and principle on “long term general obligation debt by setting aside cash and cash equivalents

The debt service fund pays off the debt of the GRaSPP Fund & It Does NOT pay off the debt of the SE-PAPI funds

*No Encumbrances are applicable

28
Q

Capital Project Fund

A

Capital projects funds are established for the construction or purchase or leasing of significant fixed assets, ( used by governmental funds , GRaSSP, only , not by proprietary or fiduciary fund. The life of the capital projects fund is short and is limited to a constructions period of 1 to 3 years.

29
Q

Capital Project Fund - Capital Grant

A

Capital grants received in advance are often recorded as a liability and displayed as earned they are expended. Govt. grants may be restricted and are reported as ‘‘revenues” when earned or may be unrestricted and recognized immediately.

30
Q

Special Assessments

A

Special assessments are defined as taxes or fees levied against property owners who will directly benefit from the project ( Sidewalks and street lights).

Note - Govt. grant maybe restricted and are reported as revenues when earned or may be unrestricted, and recognized immediately

31
Q

Things to know

A

Debt service and Permanent fund do not record encumbrances

Special revenue fund - Principle and interest ( available for public spending)

Permanent fund - Interest only ( Available for public spending)

32
Q

Internal service fund purpose

A

Internal service funds are established to finance and account for service and supplies provided exclusively to other department within a government unit or to other governmental unit, typically on a cost reimbursement basis

Note Restricted grant revenue are recognized as revenues in the year monies are spent.

33
Q

Internal service fund - Net position

A

Net position is classified in a manner consistent with other proprietary funds and display three categories of equity, Restricted, un-restricted and net investment in capital assets. - RUN NMOMIC

Note neither budgetary accounts nor encumbrances are recorded

34
Q

Enterprise Fund - Purpose

A

Enterprise funds are used to account for operations that are financed and operated in manner similar to private business enterprise.

Examples, Public utilities, pubic hospitals, public university

35
Q

Pension trust - purpose

A

Pension ( and other employee benefit ) trust fund account for government sponsored defined benefit and defined contribution plans and other employee benefits such as post retirement health care benefit.

Note statement of cash flow is not required and resources received are credited to the account “Employee contribution -restricted “

36
Q

Agency fund - purpose

A

An agency fund collects cash to be held temporarily for an authorized recipient to whom it will be later disbursed. This recipient may be another fund or some individual or firm or even government outside of government.

37
Q

Definition to know

A

Tax collection funds exist when one local government collects a tax for an overlapping governmental unit and remits the amount collected, less administrative charges, to the recipient unit.

Clearance funds are used to accumulate a variety of revenues from different sources and apportion them to various operating funds in accordance with a statutory formula or procedure

38
Q

Additional notes

A

If a government unit has monitoring or determines eligibility, the special revenue fun is used.

39
Q

Prive purpose trust fund

A

The private purpose fund is the designated fund for reporting all other trust arrangements under which principle and income are for the benefit of one of the following

  1. Specific individual 2. Private organization 3. other government
40
Q

Investment Trust

A

Accounting and Financial Reporting for certain investment and for external investment pools established that a governmental entity that sponsors one or more external investment pools should report the external portion of each pool as a separate investment trust fund

Example - Investment Trust Fund

Note Governmental fund and fiduciary Fund do not require statement of cash flows

41
Q

Definition to know

A

Restricted fund balance are restricted by external authorities (legislation, grantors, creditors )

Committed fund balance - fund balance resources associated with assets obligated by a formal action of the government’s highest decision making authority ( resolutions, encumbered appropriations ,etc)

Assigned fund balance - fund balance resources associated with assets the government intends to obligate but has not formally committed.

42
Q

Transfer between funds

A

Although not an expenditure, transfers out represent the use of financial resources.

Function or program classification provides information on the overall purpose of the expenditure. Function groups expenditures into the major services of the governmental entity.

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