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FAR > Section 29 - Govt Accounting > Flashcards

Section 29 - Govt Accounting Flashcards

1
Q

What are the primary objectives of Govt F/S?

A

1) Compare actual cost with budget
2) Compliance with laws, rules, and regulations
3) Efficiency and effectiveness
4) Financial condition and results of operations

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2
Q

Who are the primary users of Govt F/S?

A

1) Citizens
2) Legislative and oversight bodies
3) Investors and creditors

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3
Q

What are the 3 fund types?

A

GPF

1) Governmental Funds (modified accrual)
2) Proprietary Funds (accrual)
3) Fiduciary Funds(accrual)

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4
Q

What are the modified accrual funds for Govt Fund?

A

PD-Consents-to-Smoking Grass - have a current financial resources focus

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

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5
Q

What is included in Permanent Fund (Govt)?

A
  • Legally restricted
  • Only earnings can be used to fund programs
  • Principle remains intact
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6
Q

What is included in Debt Service Fund (Govt)?

A

-Handles repayment of long-term debt and related interest

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7
Q

What is included in Capital Projects Fund (Govt)?

A

-Used to acquire and build facilities

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8
Q

What is included in Special Revenue Fund (Govt)?

A

-Restricted for a specific purpose such as street repair

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9
Q

What is included in General Fund (Govt)?

A
  • 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
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10
Q

What are the accrual funds for Proprietary and Fiduciary?

A

I-PIPE-Alot

  • Internal service (Proprietary)
  • Pension trust (Fiduciary)
  • Investment trust (Fiduciary)
  • Private-purpose trust (Fiduciary)
  • Enterprise (Proprietary)
  • Agency (Fiduciary)
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11
Q

What are included in Internal Service Fund and Enterprise Fund (Proprietary)?

A

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)

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12
Q

What are included in Agency, Pension Trust, Investment Trust, and Private Purpose Trust (Fiduciary Funds)?

A

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

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13
Q

What are the 2 types of Fund Accounting for Govt?

A

1) Accrual
- current economic resources focus
- revenue recognized when earned

2) Modified accrual
- current financial resources focus
- revenues recognized when AVAILABLE and MEASUREABLE

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14
Q

How are budget estimated?

A

Appropriation - highest amount allowed for an expenditure

Encumbrance - records purchases and reserves it

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15
Q

How are actual budget recorded?

A

Expenditure - the actual cost of something (not expense since this is modified accrual accounting)

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16
Q

How do you record the opening budgetary J/E?

A 
Estimated revenues
Estimated other financial sources
   Budgetary fund balance - unreserved (PLUG)
   Appropriation
   Estimated other financial uses

***To close it is the opposite

17
Q

How many days after the reporting period can certain revenue be accrued to use in the current fiscal period?

A

60 days - property taxes and grants

18
Q

What are the 4 types of “non-exchange transactions” that generate revenue for the govt?

A

1) “Derived” tax revenues
2) “Imposed” tax revenues
3) “Government-mandated” non-exchange transactions
4) “Voluntary” non-exchange transactions

19
Q

Where do Derived Tax Revenue come from?

A

Collected by people “doing” things

ie. shopping = sales tax, working = income tax

20
Q

Where do Imposed Tax Revenue come from?

A

Assessed just because things “exist”

Property tax on car, fines, forfeits

21
Q

What are the J/Es to record an expenditure?

A

Order to purchase supplies
Encumbrances
Reserved for encumbrances

Order is filled (2 J/Es)
1) Reserved for encumbrances
Encumbrances

2) Expenditures
Vouchers payable

Payment made
Vouchers payable
Cash

22
Q

What are the 2nd and 3rd closing J/E to govt year end?

A 
2nd closing JE - close actual accounts (\$\$ spent)
Revenues
Other financial sources
   Fund balance - unreserved (PLUG
   Expenditures
   Encumbrances (for outstanding PO)
   Other financial uses

3rd closing JE - close open encumbrances
Fund balance - unreserved
Encumbrances

23
Q

What are the 5 major sections of the Comprehensive Annual Financial Report (CAFR) aka general purpose financial statements?

A

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

24
Q

What is included in the MDA portion of the financial report?

A
  • comparison with prior year
  • overall financial statements
  • individual fund statements
  • variance analysis
  • long-term activities
  • expected events
25
Q

What are the two f/s included in the Govt-wide Financial Statements?

A

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
26
Q

What is reported on the Statement of Net Position (Govt-wide F/S)

A

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
  • Total
  • Component units (if applicable)
Capital Assets are show Net of Debt
Asset Cost
-Accum Depreciation
-Asset liabilities 
=NET ASSETS

Infrastructure

  • modified approach
    • reported at cost
    • no accum depreciation
27
Q

Where are Separately Stated (discreet) and Blended component units stated on the State of Net Position (Govt wide)?

A

Separately Stated (discreet) - separate in its own column

Blended - shown blended in with Govt Activities column

28
Q

What is reported on the Statement of Activities (Govt-wide F/S)

A
  • Govt activities divided by function
  • Revenues
    • general revenues
    • program revenues
29
Q

Where are fixed assets and long-term debt reported?

A

Only in the Govt-wide F/S and not in the Fund F/S

30
Q

What are the F/S for Fund Financial Statements?

A

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
31
Q

What are the 4 sections in the Statement of cash flow for Proprietary Funds?

A

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

32
Q

What is a Major Fund reported on the columns of the Fund F/S?

A
  • 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
33
Q

What are the 5 fund balance types?

A

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)

34
Q

What is required in the Notes to the F/S?

A
  • Summary of accounting policies
  • Disclosures
  • Related party transactions
  • Description of the reporting entity
  • Segment info for enterprise funds
35
Q

What are the 4 types of RSI required by GASB?

A

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

36
Q

What are the 4 types of cash transfer?

A

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

FAR (31 decks)

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