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Flashcards in Governmental Accounting Deck (54)
1

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

Governmental, Proprietary, Fiduciary

2

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)

3

What is a budget appropriation?

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

4

What is an encumbrance?

Records purchase and reserves it for the encumbrance.

5

What is the opening budgetary entry?

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

6

What is the closing budgetary entry?

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

7

What are the types of governmental funds?

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

8

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

9

What is a Special Revenue Fund?

Restricted for a specific purpose such as street repair.

10

What is a Permanent Fund?

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

Principal remains intact.

11

What is a Capital Projects Fund?

Used to acquire and build facilities.

12

What is a Debt Service Fund?

Handles repayment of long-term debt and related interest.

13

Which fund statements are issued in Governmental Accounting?

Balance Sheet

Statement of Revenues; Expenditures; and Changes in Fund Balance

14

When is Revenue recorded in Governmental Accounting?

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

15

What is Derived Tax Revenue?

Money collected from people doing things:

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

16

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.

17

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)

18

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

19

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

20

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

21

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

22

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

Modified approach:

Reported at cost; no accumulated depreciation

23

How is a Statement of Net Assets divided?

Into Governmental Activities and Business Activities

24

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.

25

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

26

What Financial Statements are required for Defined Benefit Pension plans?

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

27

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

28

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

29

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

30

Government Wide Financial Statements

Statement of Net Position

Statement of Activity

31

Fund Financial Statements (Governmental Funds)

Balance Sheet
Statement of Revenues
Statement of Expenditures
Changes in Fund Balance

32

Proprietary Funds

Statement of Net Position
Statement of Revenues
Statement of Expenses
Changes in Fund Net Position
Statement of Cash Flows

33

Examples of Deferred Outflows of Resources

Grant Expenditures paid in advance of meeting timing requirements

Deferred amounts from refunding of debt (debits)

Cost to acquire rights to future revenues

Negative fair value of government hedge of a future transaction

34

Examples of Deferred Inflows of Resources

Grant amount received in advance of meeting timing requirements

Deferred amounts from refunding debts (credits)

Proceeds from sale of future revenues

Positive fair value of government hedge of a future transaction

35

Examples of Items that Continue to Be Reported as Assets

Prepayments

Net Pension plan position in excess of employer's total liability

Capitalized incurred costs for regulated activities

36

Examples of Items that Continue to Be Reported as Liabilities

Advances of derived tax revenues

Receipt of prepayment

Loan commitment fees

Refunds imposed by a regulator

37

Examples of Items Reported as Current Outflows

Debt issuance costs

Initial direct cost incurred by lessor for operating leases

Fees related to purchased loans

38

Examples of Items Reported as Current Inflows

Loan origination fees related to lending activities

Commitment fees charges to make a loan

Loan origination fees for mortgage loans held for investment

39

Define Agency Fund

Accounts for resources held by the reporting government in a purely custodial capacity.

40

Define Capital Projects Fund

Accounts for financial resources that are restricted, committed, or assigned to expenditures for acquisition or construction of capital assets.

41

Define Component Unit

A legally separate organization for which the elected officials of a primary government are financially accountable.

42

Define Debt Service Fund

Accounts for resources that are restricted, committed, or assigned to expenditures for the payment of general long term debt principal and interest.

43

Define Enterprise Fund

Accounts for activities that involve providing goods or service to external users for a fee.

44

Define Fiduciary Funds

Accounts for resources held and used by governments for the benefit of individuals and entities other than the government. Fiduciary funds include agency funds, pension and other employee benefit trust funds, investment trust funds, and private purpose trust funds.

45

Define Infrastructure Assets

Long lived capital assets that normally are stationary in nature and can normally be preserved for a significant number of years (eg. roads, tunnels, bridges, etc.)

46

Define Governmental Funds

Account for the current financial resources raised and expended to carry out general government purposes. Governmental funds include the general fund, special revenue funds, debt service funds, capital projects funds, and permanent funds.

47

Define General Fund

Accounts for all financial resources except those required to be accounted for in another fund.

48

Define Internal Service Fund

Reports activities that provide goods or services to other funds of the primary government on a cost reimbursement basis

49

Define Investment Trust Fund

Reports the external portions of investment pools, when the reporting government is the trustee

50

Define Permanent Fund

Accounts for resources that are restricted to the extent that only earnings and not principal may be used to support specified government programs

51

Define Proprietary Funds

Account for a government's business type activities. Proprietary funds include internal service funds and enterprise funds.

52

Define Special Revenue Fund

Accounts for specific revenues that are restricted or committed to expenditures for specific current purposes other than debt service or capital projects

53

What is the basic criterion used to determine the reporting entity for a governmental unit?

Financial Accountability

54

In the government wide financial statement, the statement of net position, deferred out flows of resources are presented...

In a separate section following assets