17 Governmental Accounting

Question 1

In governmental accounting, permanent funds are permanent because?

Answer 1

permanent funds are restricted to using earnings (interest) for expenditures and not principal - Ex interest on a trust fund

Question 2

What are the three sections of a state or local government’s comprehensive annual financial report?

Answer 2

introductory section, financial section, & statistical section

Question 3

What are the 4 types of fiduciary funds?

Answer 3

pension/other employee benefit trust funds, investment trust funds, private-purpose trust funds & custodial funds

Question 4

Government-wide financial statements of a reporting entity of a state or local governmental unit should include?

Answer 4

information about the primary government, discretely presented component units and blended component units

Question 5

Governmental fund reporting uses which basis of accounting?

Answer 5

modified accrual basis

Question 6

In governmental fund accounting the amount of pension expense recognized is?

Answer 6

the actual amount contributed to the plan during the year

Question 7

Proprietary and Fiduciary fund reporting is done on what basis?

Answer 7

accrual basis

Question 8

What are the two types of proprietary funds?

Answer 8

Internal service funds & enterprise funds

Question 9

What information is prepared in a comprehensive annual financial report?

Answer 9

1. all funds and activities of the primary government
2. provides an overview of the discretely presented component units of the reporting entity

The introductory section contains

1. A letter of transmittal from the appropriate government officials
2. An organization chart
3. Names of principal officers

Question 10

What is the primary criterion for the reporting governmental entity?

Answer 10

financial accountability

Question 11

What are special-purpose governments?

Answer 11

legally separate entities that are primary governments or component units.

ex. school systems or fire departments.