Governmental Accounting

Question 1

Which of the Activity is excluded when converting from govt fund financial stmt to govt wide financial stm.
1 Proprietary activity
2 Fiduciary activity
3. Enterprise activity
4. Govt activitoes

Answer 1

Fiduciary funds are set aside for trustees. It does not benefit for the use of govtal activities.

Question 2

When a govt charges from its customers for the operating cost and capital cost the activity is named what and which fund is used.

Answer 2

That activity is called enterprise activity and is managed through enterprise fund. Those funds are obtained by charging a fee from the external customers used for government services.

Question 3

CORONA City levied 1000000 of property taxes. City estimated 100000 of PT will be uncollectable. How mucb revenue would city recognose when the levy was passed.

Answer 3

Dr PT Receivable - 1000000
CR REVENUE - 900000
CR ALLOWANCE for uncollectible taxes - 100000

9L wIll be recognised a s revenue when the levy was passed. Govt can accrue the likely receivable amount as revenue if it is legal or due within 60 days from the current period. Levy has - 60 day rule.

Question 4

What are the main 3 standard sections of a governmental CAFR(comprehensive annual financial report)

Answer 4

1. Introductory
2. Financial
3. Comprehensive/Statistical

Question 5

Which all revenues accrue by the general fund of Racoon city.

Answer 5

1. Interest and penalty on delinquent taxes
2. Property taxes levied
3. State held taxes to be collected by Racoon city

Sales taxes collected by merchants in Racoon city will not be accrued as revenue in general fund of racoon city as it violates the accrual accounting concept. They will be recognized as revenue when it is actually collected.

Question 6

The word fiduciary fund related to govt funds include what all

Answer 6

1 pension trust gumd
2 invstmt trust funds
3 pvt purpose trust fundd
4 Agency funds

Question 7

Acceptable method to present component unit in it’s combined financial statement if city government is the primary reporting entity.

Answer 7

Discrete presentation. The other way the component unit can be reported is blended with the primary govt.
The difference is when component unit makes provides services solely for the primary govt and not for the general public it is blended with the primary govt but if is financially dependent on the primary government and serves the general public it is reported as a discrete presentation ie in a seperate column in the govt wide FS.

Question 8

In preparing city’s recon of revenues, expenditure and changes in fund balances to the govt wide statement of activities what should be subtracted from changes in fund balances.

Answer 8

Book value of capital asset sold during the year.
The full proceeds from sale of capital assets is available for use in fund to be used.
When fund balances are transferred to the government wide financial statements only the gain or loss from the sale would be recorded, so you would subtract the book value of capital asset sold during the year.

Question 9

The 5 types of governmental funds are:
The 2 types of proprietary funds are:
The 4 types of fiduciary funds are:

Answer 9

The 5 types of governmental funds are:

1) General fund, 2) Special revenue funds, 3) Debt service funds, 4) Capital projects funds, 5) Permanent funds

The 2 types of proprietary funds are:

1) Enterprise funds, 2) Internal service funds

The 4 types of fiduciary funds are:

1) Pension trust funds, 2) Investment trust funds, 3) Private purpose trust funds, 4) Custodial (agency) funds

Question 10

Which of the following is the paramount objective of financial reporting by state and local governments?
1. Reliability
2. Consistency
3. Comparability
4. Accountability

Answer 10

The two most important objectives of government reporting are:

Accountability
Interperiod equity: whether current year revenues are sufficient to cover current year benefits, and along with that, whether current citizens defered taxes to future taxpayers

Question 11

In PR - revenue recorded by corona co from license and fees is 50000 collected in general fund.
In CY it is estimated that they will collect 60000.
How much revenue should city record for license and fees in the CY.
1. 10000
2. 50000
3. 60000
4. Depends on how much the city actually collects.

Answer 11

It depends on how much the city actually collects.
Gen funds use modified accrual basis of accounting. Focus on current financial resources in which revenue has to be avaialble and measurable.license and fees arent available or measurable. City has to record the revenue only when it is actually collected.
JE
DR CASH for collected amount
Cr Revenue for the same amount