Governmental Accounting Flashcards Preview

FAR 2014 > Governmental Accounting > Flashcards

Flashcards in Governmental Accounting Deck (73):

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

Governmental, Proprietary, Fiduciary


Which two accounting bases are used in governmental accounting?

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

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


What is a budget appropriation?

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


What is an encumbrance?

Records purchase and reserves it for the encumbrance.


What is the opening budgetary entry?

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


What is the closing budgetary entry?

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


What are the types of governmental funds?

General Fund
Special Revenue Fund
Permanent Fund
Capital Projects Fund
Debt Service Fund


What is a General Fund?

The operating fund of the governmental unit

Records Significant Revenues: Taxes; Tickets; Fines; Licenses

Records Significant Expenditures: Police; Education; Fire Dept


What is a Special Revenue Fund?

Restricted for a specific purpose such as street repair.


What is a Permanent Fund?

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

Principal remains intact.


What is a Capital Projects Fund?

Used to acquire and build facilities.


What is a Debt Service Fund?

Handles repayment of long-term debt and related interest.


Which fund statements are issued in Governmental Accounting?

Balance Sheet

Statement of Revenues; Expenditures; and Changes in Fund Balance


When is Revenue recorded in Governmental Accounting?

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


What is Derived Tax Revenue?

Money collected from people doing things:

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


What is Imposed Tax Revenue?

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.


What are the types of Proprietary Funds?

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)


What are the Fund Balance Types?

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


What are the types of Fiduciary Funds?

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


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

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


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

They are shown net of debt

Asset Cost - Accumulated Depreciation - Asset Liabilities : Net Assets


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

Modified approach:

Reported at cost; no accumulated depreciation


How is a Statement of Net Assets divided?

Into Governmental Activities and Business Activities


How are activities presented in a Statement of Activities?

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.


What is the primary objective of governmental accounting?

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


What Financial Statements are required for Defined Benefit Pension plans?

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


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

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


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

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


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

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


What is the most authoritative literature for government accounting

GASB interpretations


What is the lowest level authority for government accounting

GASB implementation guides


What is the purpose of service effects and accomplishment reporting

Necessary for accountability and making informed decisions


What are the elements of resource flows

Outflows of resources
Inflows of resources


What is the essential characteristic of an asset

Present service capacity


What is a deferred outflow

Consumption of net position by the government that is applicable to a future reporting period


What are the basic government financial statements

Government wide FS
Fund FS
Notes to FS


What is the basic criteria used to determine the reporting entity

Financial accountability


When is a component blended

Governing body substantially the same as primary gov
Services provided almost entirely to gov
Components debt will be repaid almost entirely by primary gov


What is required in the government wide FS

Statement of net position
Statement of activities


How are transactions of certain loan programs presented on statement of cash flows

Operating activity


What is the purpose of government wide FS

Provide operational accountability info for gov as a whole


How are fixed assets reported on the statement of net position

Assets less accumulated depreciation


How are fixed assets reported on statement if net position under government activities

Cost less accumulated depreciation less liability


Under the modified approach how are infrastructure assets reported

Assets at cost without accumulated depreciation
Cost to extend life is expensed
Supplemental info disclosed


For pensions over what time period are the effects of differences in expected and actual investment return recognized

5 years


If a state is not expected to make projected benefit payment how are projected future benefit payments discounted

Use 20 year rate of tax exempt bonds


Which reports reflect depreciation and why?

Government wide

Both use accrual method


What are government wide FS based on and what is their focus

Based on accrual method
Focus on economic resources


Where are component resources reported

On government wide FS

Not fund statements


How is interest received as return on investment reported on statement of cash flows

Cash from investing activities


What are included in proprietary financial statements

Statement of net position
Statement of revenue, expenses, change in find net position
Statement of cash flows


How are major and nonmajor finds reported on government funds

All nonmajor funds aggregated and reports in single column


How are fund balances reported



On the statement net position for proprietary fund how are assets and liabilities and activities of internal service fund reported

Assets and liabilities as noncurrent
All activities of internal service fund aggregated and reported in single column


Where are agency funds reported

Statement of fiduciary net position


Where are private purpose trust funds reported

Statement of fiduciary net position
Statement of change in fiduciary net position


What FS reports statement of cash flows



What are the categories on statement of cash flows

Noncapital financial
Capital and related financing


What is the focus of the government fund

Focus on determination of current financial position rather than income determination


What is a nonexchange transaction

Government gives (receives) value without directly receiving (giving) equal in exchange


What is a government mandated nonexchange transaction

Providing government (state) requires receiving government to expend funds for a specific purpose


What is the basis of a pension trust

Accrual basis


In what account are proceeds from LT debt issues not recorded as fund liabilities

Other financing sources


What is the purpose of the debt service fund

Account for the accumulation of resources for and payment of LT debt principal and interest


What fund type does the debt service fund service

Governmental fund


What is the JE for cash payments from general fund for cash receipts and principal and interest payments

Dr cash
Cr transfer in - gov fund

Dr expenditure - principal
Dr expenditure - interest
Cr cash


At what value is real estate held as an investment by government endowment reported at

Fair value


Where are transactions between governmental and internal service fund reported on gov wide FS

In government activities


What is the JE for internal service fund to bill other departments

Dr billings to departments
Cr operating revenues


What is included in the transfers section on the gov wide FS

Transfers between government and business activities, except internal service to enterprise


What are some examples of transfers reported on gov wide FS

Permanent transfer from gov activities to business activities in order to establish enterprises fund

Annual transfer from government activities to subsidize enterprise fund


If a public university is only reporting business type activities use the same financial statements as

Enterprise funds


How are scholarships provided in exchange for services treated, including employee discounts

Recorded as expense, not reduction in tuition expense