Governmental Accounting Flashcards
(32 cards)
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 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 proprietary fund financial statements in governmental accounting?
Statement of Net Assets
Statement of Revenues, Expenses, and Changes in Net Assets
Statement of Cash Flows
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 and liabilities ordered in a governmental Statement of Net Assets?
Ordered by liquidity
Current and non-current
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
