Section 29 - Govt Accounting Flashcards Preview

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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?

1) Citizens

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

1) Permanent
2) Debt Service
3) Capital Projects
4) Special Revenue
5) General


What is included in Permanent Fund (Govt)?

-Legally restricted
-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)
-Enterprise (Proprietary)
-Agency (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)

Enterprise Fund
-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)?

Agency Fund
-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?

1) Accrual
-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 revenues
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

2) Expenditures
Vouchers payable

Payment made
Vouchers payable


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
-variance analysis
-long-term activities
-expected events


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
-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

Capital Assets
-net of debt

Four columns divided into:
-Govt activities
-Business activities
-Component units (if applicable)

Capital Assets are show Net of Debt
Asset Cost
-Accum Depreciation
-Asset liabilities

-modified approach
-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
-general revenues
-program revenues


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)
-Balance Sheet
-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?

-General fund

-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


What are the 4 types of cash transfer?

1) Operating transfer "interfund transfer" - most common, transfer of cash from one fund to finance current period activities in anther fund

2) Quasi-external transactions - payments from one fund to another for services or goods

3) Reimbursements - repayments from one fund to another for costs paid earlier on its behalf

4) Loans - temporary transfers between funds that are to be repaid at a later date