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Flashcards in Governmental Accounting Deck (13):
1

What is the authoritative body for state and local government?

Government Accounting Standards Board (GASB).

2

What are the differences between not-for-profit and for-profit organizations that necessitate a different accounting and reporting model for not-for-profit organizations?

  1. Principal mission is to provide goods and services;
  2. Primary resources are exchanged through non-exchange transactions;
  3. Restrictions on resources;
  4. No individual ownership interests.

3

What financial resource is unique to governmental entities?

Proceeds from taxation

  • One of the unique characteristics of government is its power to force involuntary financial resource contributions through taxation.
  • No other form of organization has this power.

4

What is the primary authoritative body for determining the measurement focus and basis of accounting standards for governmental fund operating statements?

GASB

  • The Governmental Accounting Standards Board (GASB) was established in 1984 to promulgate standards of financial accounting and reporting for the activities and transactions of state and local governments.
  • The GASB's authority includes determining the measurement focus and basis of accounting standards for governmental fund operating statements.

5

What are GASB's

Elements of Financial Statements?

*This is a Hot Topic

  1. Assets
  2. Liabilities
  3. Deferred Outflow of Resources
  4. Deferred Inflow of Resoures
  5. Net Position

6

What is GASB's Hierarchy of Reporting?

  1. Recognition in basic financial statements
  2. Note disclosure
  3. Required Supplemental Information (RSI)
  4. Other Supplemental Information (SI)
    • Not Required

7

What is GASB's paramount objective of financial reporting?

  1. Accountability
  2. Intraperiod Equity

8

According to GASB statement No.6 what are the two approaches to measuring assets and liabilities?

  1. Initial amount—determined at the time the assets is acquired or a liability is incurred.
  2. Remeasured amounts—determined as of the date of the financial statements.

9

According to GASB, who are the users of the external financial reports?

  1. Citizenry
  2. Legislative and Oversight Bodies
  3. Investors and Creditors

10

What are Governmental Funds?

Accounts for sources, uses, and balances of general government financial resources

(example: Taxes)

11

12

What is a Proprietary Fund?

Accounts for Business Type Activities

13

What is a Fiduciary Fund?

Accounts for resources held by the government in its capacity as trustee or agent for the benefit of others.