Governmental

Question 1

Appropriations, Encumbrances, Expenditures

Answer 1

Appropriations - Money set aside for expenditures

Encumberances - Goods still on order ( Debit Balance)

Expenditures - Goods received to date (Debit Balance)

Appropriations minus Encumbrances minus Expenditures = available funds (also referred to as unencumbered or unexpended appropriations)

Question 2

A government may elect not to report depreciation expense in its government wide statement of activities on which type of capital assets?

Answer 2

Infrastructure assets. If a government uses the modified approach they don’t depreciate roads, lighting systems, ect. They expense the cost to maintian them.

Question 3

Capitalization of project outlay

Answer 3

Only the actual implementation and testing are capitalized. Any cost related to pre or post project are expended as incurred.

Question 4

Fiduciary Fund

Answer 4

Holds assets in trust for the benefit of other individuals or entities. Employee benefit fund is a Fiduciary fund. The funds under this umbrella may be called agency or trust funds.

Question 5

Proprietary Funds

Answer 5

Include: Internal service funds which service other governmental departments for cost reimbursement (print shop). Enterprise funds which provide services to the public for usage charges (water).

Question 6

Governmental Funds

Answer 6

Includes: General fund, is always a major fund. Includes all activities and operations not requiring the use of other funds. Special revenue fund, accounts for money that must be used for a specific purpose, gas tax must be used for transportation related expenses. Capital project funds account for the construction or acquisition of fixed assets. Debt service funds account for money that will be used to pay the interest and principal on long term debt. Permanent funds are restricted assets that only the interest may be used for other purposes.

Question 7

Major funds

Answer 7

The biggest funds (general fund etc.) are always shown in a separate column on the financial statements. The remaining funds are presented aggregated.

Question 8

Modified accrual basis

Answer 8

Recognizes revenues when they are both measurable and available. Capital assets, long term liabilities, and depreciation expense are not recorded as they are not current resources or uses. Governmental funds use modified but are converted to full accrual for the government wide statements.

Question 9

Full accrual basis

Answer 9

used by the government wide statements, Proprietary funds, and Fiduciary funds.

Question 10

Current financial resource measurement focus

Answer 10

is used for modified accrual as it is focused on current resources and expenditures.

Question 11

Component unit

Answer 11

essentially dependent on the primary government for authorization etc. Discreet presentation on the government wide financials in a separate column. All component units can be aggregated for presentation.

Question 12

Fiduciary activities

Answer 12

are not included in the government wide financial statements because the government does not have any ownership or stake in those activities.