Test 1

Question 0

These funds are proprietary funds.

Answer 0

Internal service fund and enterprise funds

Question 1

These funds are governmental funds.

Answer 1

General fund, special revenue fund, debt service fund, capital projects fund, permanent funds

Question 2

These funds are fiduciary funds.

Answer 2

Agency funds and trust funds (eg, Investment, Pension, and Private-purpose)

Question 3

What are the three governmental funds financial statements?

Answer 3

Balance Sheet

Statement of Revenues, Expenditures, and Changes in Fund Balance (Budget and Actual)

General Fund and Major Special Revenue Funds Statement of Revenues, Expenditures, and Changes in Fund Balance (Budget and Actual)

Question 4

What are the three Proprietary Fund financial statements?

Answer 4

Statement of Net Position (like BS)

Statement of Revenues, Expenses, and Changes in Net Fund Position

Statement of Cash Flows

Question 5

What are the two Fiduciary Funds financial statements?

Answer 5

Statement of Fiduciary Fund Net Position (BS)

Statement of Changes in Fiduciary Fund Net Position

Question 6

What are the major types of G&NP Organizations?

Answer 6

Governmental (federal, state, city, etc)
Educational (public schools, public universities, etc)
Health and welfare (hospitals, nursing homes)
Religious (YMCA, Salvation Army)
Charitable (fund-raising agencies)
Foundations (private trusts)

Question 7

List 3 major differences between G&NP organizations and profit-seeking organizations.

Answer 7

Organizational objectives (G&NP focuses on sources and use of financial resources)

Sources of financial resources (G&NPs make no distinction between invested capital and revenue)

Evaluating performance and operating results (purpose of G&NP organization is to provide more or better services, not to increase wealth).

Question 8

Who is responsible for establishing accounting and financial reporting standards for activities and transactions of state and local governments, including government nonprofits?

Answer 8

The Governmental Accounting Standards Board (GASB)

Question 9

Who is responsible for establishing accounting and financial reporting standards for nongovernment nonprofits?

Answer 9

The Financial Accounting Standards Board (FASB)

Question 10

List some governmental-type activities (i.e. general government funds).

Answer 10

Administrative services
Police and fire
Education
Public works (bridges, roads)
Parks and recreation
Social services 
Judicial services

Think: no user fees - tax dollars pay for these!

Question 11

List some business-type activities (i.e. proprietary funds).

Answer 11

Utilities
Swimming pools
Golf courses
Airports
Colleges and universities
Hospitals

Think: charges user fees and is operated similarly to private businesses.

Question 12

Name two examples of revenue sources for governmental-type activities.

Answer 12

Taxation and intergovernmental revenues (eg, grants and subsidies from higher level governments).

Question 13

What are the primary ways of allocating general government resources?

Answer 13

Restrictions on resource use (eg, certain resources can only be used for a particular purpose or program)

Budget restrictions (more detailed restrictions - budget is adopted into law. Authorizes and limits amounts)

Question 14

To whom are governments accountable?

Answer 14

Their constituencies (officials are elected to act on behalf of the citizens)

Other governments (senior governments have oversight)

Their own legislative and executive bodies (demonstrating that fund restrictions have been complied with and resources were used efficiently and effectively)

Question 15

What types of accountability do the financial reports for governmental-type activities focus on?

Answer 15

Fiscal accountability (use of resources and compliance with fund and budget restrictions)

Operational accountability (demonstrate the extent to which the gov’t has met it’s operating objectives and whether it can continue to meet objectives)

Question 16

What are the minimum external financial reporting requirements for governmental organizations?

Answer 16

Auditor's report
MD&A
G-W financials
Fund financials
Notes to the financial statements
Required supplementary information

Question 17

What are the two government wide (G-W) financial statements?

Answer 17

G-W Statement of Net Position

G-W Statement of Activities

Question 18

What is an appropriation?

Answer 18

It authorizes expenditures for specifies purposes and limits the amounts that can be expended for each specified purpose.

Question 19

How do you adjust a statement from cash basis to GAAP?

Answer 19

SUBTRACT beginning accrual amounts and ADD ending accrual amounts (for both revenues and expenditures).

Question 20

What are the nonfund accounts?

Answer 20

General Capital Assets

General Long-Term Liability

Question 21

How are government wide financial statements derived?

Answer 21

From fund financial statements using worksheet adjustments that are not posted to the accounts.

G-W and fund financials are considered to be one set of financials and are linked by reconciliations of their differences.

Question 22

What are included in the fund financial statements?

Answer 22

Governmental funds

Proprietary funds

Fiduciary funds

Question 23

What are included in the government-wide financial statements?

Answer 23

Governmental activities (derived from gov’t funds)

Business-type activities (derived from proprietary funds)

Total primary government

Question 24

What is the proprietary fund accounting equation?

Answer 24

``` + Assets + Deferred Outflows - Liabilities - Deferred Inflows = Net Position ```

Question 25

What is the governmental fund accounting equation?

Answer 25

``` (Financials Assets + deferred outflows) - (Related liabilities + deferred inflows) = Fund Balance ```

Question 26

When is a revenue recognized in a governmental fund?

Answer 26

When it is earned or levied in the period; It is measurable; And it is available (collected in the period or soon after--generally 60 days after year end) Note: for property taxes to be recognized as revenue, GASB requires availability within 60 days of year end. Other revenues can be considered "available" at the discretion of the entity.

Question 27

When is an expenditure recognized for governmental funds?

Answer 27

When operating or capital outlay liabilities to be paid currently are incurred; And when general debt service payments on long-term liabilities are due.

Question 28

What are enterprise funds?

Answer 28

Proprietary funds to account for any activity for which user fees for goods provided to external customers (i.e. the general public) are a principal revenue source.

Question 29

What are internal service funds?

Answer 29

Proprietary funds used to account for intergovernmental activity (on a cost reimbursement basis).

Question 30

What is the general fund?

Answer 30

Governmental fund used to account for and report all financial resources not accounted for and reported in another fund (eg, it is a "catch all").

Question 31

What are special revenue funds?

Answer 31

Governmental funds to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specific purposes other than debt service or capital outlay.

Question 32

What are capital project funds?

Answer 32

Governmental funds to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays (acquisition or construction).

Question 33

What are debt service funds?

Answer 33

Governmental funds to account for and report financial resources that are restricted, committed, or assigned to expenditure for principal and interest.

Question 34

What are pension trust funds?

Answer 34

Fiduciary funds to account for resources held for members and beneficiaries (defined benefit pension plan, defined contribution plan, etc).

Question 35

What are investment trust funds?

Answer 35

Fiduciary funds that account for the external portion of investment pools held by sponsoring government.

Question 36

What is a private-purpose trust fund?

Answer 36

Fiduciary fund to account for all other trust arrangements.

Question 37

What is the GASB hierarchy of authority?

Answer 37

GASB Statements GASB Technical Bulletins AICPA AcSEC Practice Bulletins GASB Implementation Guides

Question 38

Define fund.

Answer 38

A fund is a self-contained accounting entity with its own asset, liability, revenue, expenditure or expense, and fund balance or net position accounts.

Question 39

What is MFBA?

Answer 39

It is different methods of applying the accrual concept: Measurement Focus (MF) and Basis of Accounting (BA). Measurement focus refers to the types of transactions, events, or elements that are reported in the financial statements.

Question 40

What is the MFBA of proprietary funds?

Answer 40

Same as business accounting: The measurement focus is economic resources (recognition of all assets and liabilities, both long-term and current). The basis of accounting is the accrual basis (revenues and expenses represent changes in the net assets related to the reporting period).

Question 41

What is the MFBA for governmental funds?

Answer 41

The measurement focus is current financial resources (sources, uses, and balances of financial resources available for spending). The basis of accounting is modified accrual.