Governmental F/s Flashcards
(40 cards)
under governmental accounting Program-specific operating grants and contributions are ?
Program-specific operating grants and contributions are nonexchange revenues that are restricted to the operations of specific programs or functions.
What are the three categories of primary users of government financial reports as identified by GASB?
Advocate groups are part of one of three categories of primary users of government financial reports as identified by GASB Concept Statement No. 1:
1-The citizenry to which the government is accountable.
2-Legislative and oversight bodies who represent the citizenry.
3-The investors and creditors who lend or participate in the lending process.
Note: The citizenry includes citizens, the media, advocacy groups, and public finance researchers.
Custodial Funds?
Custodial Funds are used to account for resources held by a government as an agent for individuals or other governmental units. Taxes, for example, are occasionally collected by one governmental unit on behalf of another. Until that, money is physically transferred to the proper authority, it is recorded in a Custodial Fund.
A Trust Fund?
A Trust Fund accounts for assets received and held by a governmental unit acting in the capacity of trustee or custodian. The aim in Trust Fund accounting is to ensure that the money or other resources are handled in accordance with the terms of the trust agreement and/or applicable trust laws.
Special Revenue Funds?
Special Revenue Funds are used to account for revenues that have been legally restricted as to expenditure (e.g., a state gasoline tax collected in order to maintain streets).
Internal Service Funds?
Internal Service Funds are used to account for any department or custodian that provides services within the government on a cost-reimbursement basis.
* Internal Service fund is part of the proprietary funds which use the accrual basis of accounting with economic resources approach. Statement of revenue, expenses, and changes in net position:
Operating revenues - Operating expenses +/- Non operating revenues (expenses) = Change in net position
Depreciate capital assets
* As the name implies, internal service funds provide a centralized management of shared services and allocate the costs of those services across the departments or agencies who participate.
* General capital assets are not included as a cost element in internal service funds, only the assets used directly in the operations.
Capital projects?
The $9,000,000 the city received as a federal grant to finance the construction of a homeless shelter should be recorded in the capital projects fund. Capital projects fund accounts for major acquisition or construction activities of capital assets. A capital projects fund is used to establish resources to construct or acquire major, long-lived general government facilities. The construction of a homeless shelter via a federal grant is a perfect example.
Proceeds of General Obligation Bonds are typically used by a governmental unit to finance major capital projects, such as the construction of buildings, roads, or other infrastructure. These funds are accounted for in the Capital projects fund, which is specifically used to track financial resources that are restricted, committed, or assigned for capital outlays. This fund ensures that the bond proceeds are used exclusively for the intended capital projects.
Debt service fund?
The Debt service fund is used to account for the payment of principal and interest on long-term debt. While this fund handles the repayment of the bonds, it does not account for the initial proceeds from the bond issuance.
* Accumulation of resources to repay bonded indebtedness describes a governmental debt service fund.
Enterprise fund?
The Enterprise fund is used to account for operations that are financed and operated in a manner similar to private business enterprises, where the intent is to recover the costs of providing goods or services through user charges.
Most government-owned public utilities (e.g., electricity, gas, water, and sewage systems) must be accounted for as enterprise funds.
- Enterprise funds are more likely to issue revenue debt.
- The town of Hill operates municipal electric and water utilities , the operations of the utilities be accounted for Enterprise fund.
What can be reported in a fiduciary fund?
GASB Statement No. 34 segregated fiduciary funds from the governmental and proprietary funds to carve out those activities that solely benefit third parties and provide no resources for the government’s programs.
What is the most prevalent fiduciary fund?
The most prevalent fiduciary fund is the pension trust fund, not the custodial fund, the investment trust fund, or the private-purpose trust fund.
What is GASB’s Concept Statement No. 4’s definition of “assets”?
Assets, per Concepts Statement No. 4, must provide present service capacity and be controlled by the government.
The definition of assets does not consider whether those resources are encumbered.
What is The GASB’s primary goal for the SEA Concepts Statements ?
The SEA Concepts Statements are focused on a reporting framework, not the specifics to include in a SEA report. The GASB hopes the SEA Concepts Statements and the Voluntary Reporting Guidelines will help preparers develop comparable reports that improve the usefulness of SEA reports. The GASB has not established specific reporting or measurement standards for SEA reports. Identification of the appropriate performance data is a management function, not a role for the GASB.
an example of imposed nonexchange revenue for a governmental entity?
Imposed nonexchange revenues represent assessments imposed on non-governmental entities and include property taxes and fines or forfeitures. Taxes on earnings or consumption are classified as derived tax revenues.
( Certain grants, entitlements, and donations are classified as voluntary nonexchange transactions. Voluntary nonexchange transactions result from legislative or contractual agreements involving parties that may or may not be governmental entities, but do not involve an exchange of equal value.)
- also type of nonexchange transaction
Is Derived tax revenues are assessments imposed by governments on exchange transactions and generally include sales taxes, income taxes, motor fuel taxes,
and similar taxes on earnings or consumption.ex(Chase City imposes a 2% tax on hotel charges. Revenues from this tax will be used to promote tourism in the city. Chase should record this tax as Derived tax revenue).
for the fund other than general fund,the definition of “major” generally is based on?
The definition of “major” for other than the general fund is based on an objective assessment of the relative size compared to the government’s totals.
In which fund should report the amount for plan assets and as a corresponding liability When a governmental unit is the administrator of a multiple-jurisdiction deferred compensation plan?
it should report all of the plan assets and liabilities (e.g., $40 = 38 pertaining+2 comprising ) in Custodial Fund because the governmental unit is acting as an agent for both its own employees and other governments participating in the plan.
According to GASB Concepts Statement No. 1, governmental financial reporting objectives are focused on providing accountability because of what purpose for governmental entities?
(They derive their revenues in large part from involuntary payers.)
Governments derive their revenues in large part from involuntary payers. Tax assessments, license fees, permits, even many user fees are imposed in accordance with statutory authority rather than the payer’s willingness to participate in the transaction. This authority is vested in the governmental entity to protect the public welfare and promote social and economic development.
What considered supportive of interperiod equity as a financial reporting objective of a governmental unit?
A balanced budget is adopted.
Interperiod equity is the idea of using the revenues from one period to pay for the expenditures of that same period and that period only. A balanced budget is a plan for this occurrence.
Permanent fund?
The Permanent Fund accounts and reports assets whose principal is restricted and may not be spent, but must be invested on a permanent basis. Since land is restricted by the donor and income generated from the land can be spent, Tang city would record in permanent fund.
The lead(s) to the use of fund accounting by a governmental organization?
In the absence of a profit motive, a net income bottom line, or other uniform objective performance indicators, governments use fund accounting to demonstrate compliance with restrictions and controls.
What leads to the use of fund accounting by a governmental organization?
In the absence of a profit motive, a net income bottom line, or other uniform objective performance indicators,
governments use fund accounting to demonstrate compliance with (restrictions and controls.)
What is indictor when the governmental fund balance may be reported as committed?
Ex:
Constraints are imposed by formal action of the government’s governing body
Committed fund balances reflect amounts that can only be used for specific purposes based on constraints imposed by formal action of the government’s highest level of decision -making authority.
How Governments demonstrate accountability for managing public resources?
Complying with a legally adopted budget that controls appropriations
Budgets play a key role in managing public funds. Governments adopt a budget with legislative approval providing a legal mandate for the expenditure of public funds.
What is The mission of the Governmental Accounting Standards Board (GASB) includes?
The GASB’s mission includes research and development of standards that will improve accounting and financial reporting for state and local governments. The GASB’s mission includes providing a framework to educate users and support public policies, investments, and management by those users.
