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FAR - CPA > Governmental Accounting > Flashcards

Governmental Accounting Flashcards

1
Q

What are the three major types of funds in governmental accounting?

A

Governmental, Proprietary, Fiduciary

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2
Q

Which two accounting bases are used in governmental accounting?

A

Accrual basis - current economic resources focus (revenues recognized when earned)

Modified accrual basis - current financial resources focus (revenues recognized when available and measurable)

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3
Q

What is a budget appropriation?

A

The highest amount allowed for a particular expenditure under a budget.

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4
Q

What is an encumbrance?

A

Records purchase and reserves it for the encumbrance.

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5
Q

What is the opening budgetary entry?

A

Dr Estimated Revenues Control
Cr Appropriations Control
Dr/Cr Budgetary Fund Balance (plug)

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6
Q

What is the closing budgetary entry?

A

Dr Appropriations Control
Dr/Cr Budgetary Fund Balance (plug)
Cr Estimated Revenues Control

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7
Q

What are the types of governmental funds?

A 
General Fund
Special Revenue Fund
Permanent Fund
Capital Projects Fund
Debt Service Fund
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8
Q

What is a General Fund?

A

The operating fund of the governmental unit

Records Significant Revenues: Taxes; Tickets; Fines; Licenses

Records Significant Expenditures: Police; Education; Fire Dept

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9
Q

What is a Special Revenue Fund?

A

Restricted for a specific purpose such as street repair.

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10
Q

What is a Permanent Fund?

A

Legally restricted fund; where only earnings can be used to fund programs.

Principal remains intact.

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11
Q

What is a Capital Projects Fund?

A

Used to acquire and build facilities.

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12
Q

What is a Debt Service Fund?

A

Handles repayment of long-term debt and related interest.

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13
Q

Which fund statements are issued in Governmental Accounting?

A

Balance Sheet

Statement of Revenues; Expenditures; and Changes in Fund Balance

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14
Q

When is Revenue recorded in Governmental Accounting?

A

When it is BOTH available and measurable; regardless of when it is spent.

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15
Q

What is Derived Tax Revenue?

A

Money collected from people doing things:

Sales tax (buying cars) or income tax (people working)

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16
Q

What is Imposed Tax Revenue?

A

Tax assessed just because things exist

Example: property tax on a car (even if it’s never driven); real estate tax

Recorded as a revenue when BUDGETED.

Estimated uncollectible property tax revenues don’t offset revenues; so don’t net them.

17
Q

What are the types of Proprietary Funds?

A

Internal Service Funds - to serve the needs of other governmental units (i.e. motor pool)

Enterprise Funds - provide goods or services to external users (i.e. post office)

18
Q

What are the Fund Balance Types?

A 
Restricted - Restricted by Contributor 
 Committed - Restricted by Government
 Assigned - Intended for a purpose
 Unassigned - Available to be spent
 Non-spendable - Not in a spendable state
19
Q

What are the types of Fiduciary Funds?

A

Agency Fund - government acts as an agent or custodian

Pension Trust Fund - Government is a trustee for a pension plan

Investment Trust Fund - Government is a trustee over a series of investments

Private Purpose Trust - Trust that benefits various individuals and entities

20
Q

How are Assets & Liabilities presented on the Statement of Net Position?

A

Assets (Current & Non-Current)
Deferred Outflows of Resources
Liabilities (Current & Non-Current)
Deferred Inflows of Resources

21
Q

How are Capital Assets shown on a governmental Statement of Net Assets?

A

They are shown net of debt

Asset Cost - Accumulated Depreciation - Asset Liabilities : Net Assets

22
Q

How is infrastructure reported on a governmental Statement of Net Assets?

A

Modified approach:

Reported at cost; no accumulated depreciation

23
Q

How is a Statement of Net Assets divided?

A

Into Governmental Activities and Business Activities

24
Q

How are activities presented in a Statement of Activities?

A

They are divided by function

If the activities of a component are distinguishable from the rest of the governmental entity; then discreet presentation is required

If the activities of the component cannot be identified and separated from the rest of the governmental activities; then blended presentation is warranted.

Component units are reported in the Entity-Wide Financial Statements and not the Fund Financial Statements.

25
Q

What is the primary objective of governmental accounting?

A

To provide information that is useful and benefits a wide range of users including:

Costs of services provided

Sufficiency of revenues to cover costs

Financial position of entity

26
Q

What Financial Statements are required for Defined Benefit Pension plans?

A

Statement of Fiduciary Net Position and Statement of Changes in Fiduciary Net Position

27
Q

What are the components of the Statement of Fiduciary Net Position for Defined Benefit Pension Plans?

A

Assets; Deferred Outfows; Liabilities; Deferred Outflows; Fiduciary Net Position

28
Q

What are the components of the Statement of Changes in Fiduciary Net Position for Defined Benefit Pension plans?

A

Additions (Contributions and Net Investment Income) - Deductions (Benefits Payments and Admin Expense) : Net Change in Fiduciary Net Position

29
Q

What should be included in the Financial Statement notes for Defined Benefit Pension Plans?

A

Types of Benefits; Plan Member Classes; Board Information; Investment Policies and FV Determination

30
Q

What is the order of presentation of line items on a Proprietary Fund’s - Statement of Revenues, Expenses, and Changes in Fund Net Position?

A 
"INCASET"
Income (operating)
Nonoperating income and expense
Capital contributions and
Additions to endowments
Special items (unusual or infrequent)
Extraordinary items
31
Q

How is the change in fund balance in governmental fund financial statements reconciled to the change in net position for governmental activities in the government-wide financials?

A 
"GOES BARE"
Governmental fund balance change
Other financing sources
Expenditure - capital outlay (net depreciation)
Service (Internal) fund net income
adjustments:
Basis of Accounting
Additional accrued
Revenues
Expenses
32
Q

What two types of accountability does Governmental reporting focuses on?

A 
Operational accountability (government wide financial statements)
and 
Fiscal Accountability (fund financial statements)
33
Q

Statement of Cash Flows - Proprietary Funds

A 
Cash Flows of Operating Activities
 Receipts from customers
 Payments to suppliers
 Payments to employees
 Internal activity (payment for services to other funds, incl payments in lieu of taxes)

Cash Flows from Noncapital Financing Activities
Operating subsidies and transfers to other funds
Proceeds/payments related to borrowing but not attributable to the acquisition, construction, or improvement of capital assets
Cash receipts/payments related to grants or subsidies not attributable to capital purposes
Property taxes not designated for capital purposes
Cash paid to other funds (other than for interfund services)

Cash Flows from Capital Financing Activities
 Proceeds from capital debt
 Capital contributions
 Purchases of capital assets
 Principal paid on capital debt
 Interest paid on capital debt

Cash Flows from Investing Activities
Purchase of investments
Interest and dividends

34
Q

GASB 34 Government-wide financial statements require the use of what?

A

Economic resources measurement
and
full accrual basis of accounting

  • Fiduciary funds are excluded and the components are included
35
Q

Government-wide financial statements’ Statement of Activities include what Program Revenue Category types?

A

“SOC”
Services charges
Operating grants and contributions
Capital grants and contributions

36
Q

What are primary government entities?

A

The primary government consists of all organizations that make up the legal government entity, and is considered the nucleus of the financial reporting entity.
- State governments
- General purpose local governments (city/county)
- Special Purpose local governments that meet all of the “SELF” criteria (the primary government reports by it”SELF”:
Seperately-Elected governing body
Legally seperate
Fiscally independent of other state and local governments

FAR - CPA (19 decks)

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