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FAR Focus Areas > Governmental Accounting > Flashcards

Governmental Accounting Flashcards

1
Q

Who governs governmental accounting?

A

GASB (Governmental Accounting Standards Board)

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2
Q

How many governmental funds are there? What are they?

A

5 Governmental Funds

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

How many proprietary funds are there? What are they?

A

2 Proprietary Funds

  1. Internal Service
  2. Enterprise
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4
Q

How many fiduciary funds are there? What are they?

A

4 Fiduciary Funds

  1. Private Purpose
  2. Agency
  3. Pension
  4. Investment
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5
Q

What basis of accounting does governmental funds use?

A

Modified Accrual Basis

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6
Q

What is the main difference between modified accrual basis and accrual basis of accounting?

A
  1. Modified Accrual Basis has a current financial resources focus only, does not carry fixed assets or long term debt on their financial statements
  2. Modified Accrual Basis recognizes revenues when available & measureable
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7
Q

What is the purpose of budgetary accounting?

A

It is used to control expenditures and to account for the levy of taxes to cover estimated expenditures

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8
Q

What does interperiod equity represent?

A

A balanced budget supports interperiod equity as an objective of government accountability

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9
Q

What basis of accounting is used for budgetary accounting?

A

Either the cash basis or modified accrual basis, but it must be the same basis of accounting as the adopted budget

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10
Q

What is a source of governmental fund revenue?

A

Taxes (income, sales, property and real estate) and fines/penalties

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11
Q

What are “other financing sources” of the governmental funds?

A

Debt proceeds and interfund transfers

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12
Q

When is governmental revenue recorded?

A

When measurable and available, this usually means the collection period does not exceed 60 days after fiscal year end

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13
Q

What is the main source of governmental fund revenue?

A

Non exhange transaction either derived (sales tax) or imposed (fines/property taxes)

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14
Q

What is an appropriation?

A

The highest amount allowed for an expenditure

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15
Q

When are property taxes recognized?

A

In the period in which taxes are levied

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16
Q

Why does the government use fund accounting?

A

To monitor budgets and financial control and/or legal restrictions

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17
Q

What is the most diffiult GAAP qualitative characteristic for a government entity to report?

A

Relevance

18
Q

What is the measurement focus of a government type fund?

A

Current financial resources and financial position

19
Q

What is a fund deficit reported as?

A

A negative unassigned fund balance

20
Q

What is an encumbrance?

A

A commitment to purchase, occurs when issuing a purchase order

21
Q

What is the calculation to determine a government fund’s amount available for use based on their budget?

A

Appropriations - expenditures - encumbrances = amount available for use

22
Q

What is the opening budgetary journal entry?

A

Debit Estimated Revenues control (expected)
Credit Appropriations control (approved)
Debit/Credit Budgetary fund balance (plug)

23
Q

What is the closing budgetary journal entry?

A

Debit Appropriations control
Debit/Credit Budgetary fund balance (plug)
Credit Estimated Revenues Control

24
Q

Is there a profit incentive for Governmental Funds?

A

No

25
Q

Which fund is the operating fund of the governmental unit?

A

The General Fund

26
Q

Which fund is restricted for a specific purpose?

A

Special Revenue Fund

27
Q

Which fund is legally restricted to only use earnings to fund programs, while principal remains intact?

A

Permanent Fund

28
Q

What fund can be used to acquire and build facilities?

A

Capital Projects fund

29
Q

Which fund handles the repayment of long term debt and related interest?

A

Debt Service fund

30
Q

What financial statements are required for governmental funds?

A
  1. Balance Sheet

2. Statement of Revenues, Expenditures and Changes in Fund Balance

31
Q

What is the journal entry to account for interfund billings?

A

Debit Due from other funds

Credit Interfund revenues

32
Q

What type of revenue is collected by people doing things?

A

Derived tax revenue

33
Q

What type of revenue is collected just because things exist?

A

Imposed tax revenue

34
Q

When is imposed tax revenue recorded as revenue?

A

When budgeted

35
Q

Which fund pays off the debt of governmental funds?

A

Debt Service Fund

36
Q

How are governmental expenditures classified?

A
  1. Function or program
  2. Organizational unit
  3. Activity
  4. Character
  5. Object classes
37
Q

What fund is frequently combined with governmental funds in the government wide financial statements?

A

Internal Service funds

38
Q

Which fund is self operated?

A

Enterprise fund

39
Q

What type of funds requires a statement of cash flows?

A

Proprietary funds

40
Q

What basis of accounting is used for proprietary funds?

A

Accrual basis of accounting, orientation is income determination

41
Q

What is the measurement focus for proprietary funds?

A

Economic Resource focus

42
Q

What is the criteria for revenue to be recognized for proprietary funds?

A

Revenue is recognized when earned and measureable

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