Flashcards in Section 29 - Govt Accounting Deck (36):
What are the primary objectives of Govt F/S?
1) Compare actual cost with budget
2) Compliance with laws, rules, and regulations
3) Efficiency and effectiveness
4) Financial condition and results of operations
Who are the primary users of Govt F/S?
2) Legislative and oversight bodies
3) Investors and creditors
What are the 3 fund types?
1) Governmental Funds (modified accrual)
2) Proprietary Funds (accrual)
3) Fiduciary Funds(accrual)
What are the modified accrual funds for Govt Fund?
PD-Consents-to-Smoking Grass - have a current financial resources focus
2) Debt Service
3) Capital Projects
4) Special Revenue
What is included in Permanent Fund (Govt)?
-Only earnings can be used to fund programs
-Principle remains intact
What is included in Debt Service Fund (Govt)?
-Handles repayment of long-term debt and related interest
What is included in Capital Projects Fund (Govt)?
-Used to acquire and build facilities
What is included in Special Revenue Fund (Govt)?
-Restricted for a specific purpose such as street repair
What is included in General Fund (Govt)?
-OPERATING fund of the govt
-ie. public safety, public works, parks and rec
-revenue source include property taxes, fees, fines, licensees, permits and grants
-expenditure include police, education, fire dept
What are the accrual funds for Proprietary and Fiduciary?
-Internal service (Proprietary)
-Pension trust (Fiduciary)
-Investment trust (Fiduciary)
-Private-purpose trust (Fiduciary)
What are included in Internal Service Fund and Enterprise Fund (Proprietary)?
Internal Service Fund
-serves the need of other govt departments (ie. janitor, IT)
-provides goods and services to external users (ie post office)
What are included in Agency, Pension Trust, Investment Trust, and Private Purpose Trust (Fiduciary Funds)?
-Govt acts as an "agent" or custodian
Pension Trust Fund
-Govt is a trustee for a pension plan
Investment Trust Fund
-Govt is trustee over a series of investments
Private Purpose Trust
-Trust that benefits various individuals and entities
What are the 2 types of Fund Accounting for Govt?
-current economic resources focus
-revenue recognized when earned
2) Modified accrual
-current financial resources focus
-revenues recognized when AVAILABLE and MEASUREABLE
How are budget estimated?
Appropriation - highest amount allowed for an expenditure
Encumbrance - records purchases and reserves it
How are actual budget recorded?
Expenditure - the actual cost of something (not expense since this is modified accrual accounting)
How do you record the opening budgetary J/E?
Estimated other financial sources
Budgetary fund balance - unreserved (PLUG)
Estimated other financial uses
***To close it is the opposite
How many days after the reporting period can certain revenue be accrued to use in the current fiscal period?
60 days - property taxes and grants
What are the 4 types of "non-exchange transactions" that generate revenue for the govt?
1) "Derived" tax revenues
2) "Imposed" tax revenues
3) "Government-mandated" non-exchange transactions
4) "Voluntary" non-exchange transactions
Where do Derived Tax Revenue come from?
Collected by people "doing" things
ie. shopping = sales tax, working = income tax
Where do Imposed Tax Revenue come from?
Assessed just because things "exist"
Property tax on car, fines, forfeits
What are the J/Es to record an expenditure?
Order to purchase supplies
Reserved for encumbrances
Order is filled (2 J/Es)
1) Reserved for encumbrances
What are the 2nd and 3rd closing J/E to govt year end?
2nd closing JE - close actual accounts ($$ spent)
Other financial sources
Fund balance - unreserved (PLUG
Encumbrances (for outstanding PO)
Other financial uses
3rd closing JE - close open encumbrances
Fund balance - unreserved
What are the 5 major sections of the Comprehensive Annual Financial Report (CAFR) aka general purpose financial statements?
1) Management discussion and analysis (MDA)
2) Govt-wide financial statements
3) Fund financial statements
4) Notes to the F/S
5) Required supplementary information (RSI) other than MDA
What is included in the MDA portion of the financial report?
-comparison with prior year
-overall financial statements
-individual fund statements
What are the two f/s included in the Govt-wide Financial Statements?
Statement of Net Position and Statement of Activities
-prepared on ACCRUAL BASIS
-purpose is to provide OPERATIONAL ACCOUNTABILITY
-all activities are included except Fiduciary activities and Discretely presented component units
What is reported on the Statement of Net Position (Govt-wide F/S)
Assets + Deferred Outflows of Resources - Liabilities -Deferred Inflows of Resources = NET POSITION
Assets (current and non-current)
-ordered by liquidity
Deferred Outflows of Resources
-Future use of Net Assets
Liabilities (current and non-current)
-ordered by liquidity
Deferred Inflows of Resources
-Future increase of Net Assets
Restricted Net Assets
Unrestricted Net Assets
-net of debt
Four columns divided into:
-Component units (if applicable)
Capital Assets are show Net of Debt
-reported at cost
-no accum depreciation
Where are Separately Stated (discreet) and Blended component units stated on the State of Net Position (Govt wide)?
Separately Stated (discreet) - separate in its own column
Blended - shown blended in with Govt Activities column
What is reported on the Statement of Activities (Govt-wide F/S)
-Govt activities divided by function
Where are fixed assets and long-term debt reported?
Only in the Govt-wide F/S and not in the Fund F/S
What are the F/S for Fund Financial Statements?
Governmental Fund (MODIFIED ACCRUAL)
-Statement of revenues, expenditures, and changes in fund balances
Proprietary Fund (ACCRUAL)
-Statement of Net Position (B/S)
-Statement of revenues, expenditures, and changes in fund balances (fund equity)
-Statement of cash flows (4 sections)
Fiduciary Fund (ACCRUAL)
-Statement of Fiduciary Net Position
-Statement of Change in Fiduciary Net Position
What are the 4 sections in the Statement of cash flow for Proprietary Funds?
1) Operating - direct method required - NO interest or dividend here
2) Investing - includes interest and div income, loans made
3) Noncapital financing - includes interest exp on unsecured loans, transfers, grants, subsidies, and property taxes received
4) Capital and related financing - interest expense on secured loans for capital assets, financed purchases and sales of capital assets
What is a Major Fund reported on the columns of the Fund F/S?
-Other funds representing both 10% or more of assets, liabilities, revenues, or expenditures/expenses of Govt or Enterprise category AND 5% of total entity
-any other funds management deem useful to present separately
What are the 5 fund balance types?
1) Restricted -restricted by contributor (strict)
2) Committed - restricted by govt (less strict because they can undo restriction)
3) Assigned - INTENDED to be used for a purpose
4) Unassigned - available to be spent
5) Nonspendable - isn't in a "spendable" state (inventory, prepaid expense, long-term loans)
What is required in the Notes to the F/S?
-Summary of accounting policies
-Related party transactions
-Description of the reporting entity
-Segment info for enterprise funds
What are the 4 types of RSI required by GASB?
1) Budgetary Comparison Schedule (BCS) - budget vs actual
2) Info about Infrastructure Assets (for entities using Modified Approach)
3) Claims Development Information When the Govt Sponsors a Public Entity Risk Pool
4) 2 pension schedules