Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

FAIS 3 > Ch 16 Government > Flashcards

Ch 16 Government Flashcards

0
Q

What is the primary purpose of government vs. Business enterprise

A

Gov: enhance and maintain well being of citizens by providing
services in accordance with public policy goals

Bus: wealth creation, maximizing shareholder value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
1
Q

GASB

A

Governmental Accounting Standards Board

Serve as public sector counterpart of Financial Accounting
Standards Board

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Governments serve a broader group of stakeholders including…6

A 
1 taxpayers
2 citizens
3 elected representatives
4 oversight groups
5 bond holders
6 others in financial community
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

How are government revenues raised?

A

Through involuntary taxes

(Rather than a willing exchange between parties in a business
Transaction)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Monitoring actual compliance with budgeted public policy priorities is…

A

Central to government public accountability reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Governments exist longer than for profit businesses and are not typically subject to…

A

Bankruptcy and dissolution

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Accounting for state and local governments is not merely a matching of expenses with earned revenues so…

A

Net income can be determined

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Without a profit motive, what should be reported by a government for the short term?

Who are the potential users of the financial info?

A

Government reporting focuses on methods used to generate
Current resources and uses of those resources

Help public informed so proper decisions are more likely to be made

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

For longer term, what financial information is required by the government?

2) Who requires it?

A

Information to reflect overall financial stability of the government

2) Creditors

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Who addresses issues and sets standards for financial reporting of state and local governments?

A

GASB

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

GASB is an independent body functioning under the oversight of…

A

The Financial Accounting Foundation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

The unique aspects of any system of accounting should be a direct result of the…

A

Perceived needs of financial statement users

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

3 groups of primary users of external state and local governmental financial reports

A

1 citizenry

2 legislative and oversight bodies

3 investors and creditors

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Needs: Citizenry

A

Evaluate the likelihood of tax or service fee increases, to determine
Sources and uses of resources

And forecast revenues in order to influence spending decisions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Needs: Legislative and oversight bodies 4

A

1) Assess overall financial condition when developing
budgets/program recommendations
2) Monitor operating results to assure compliance with mandates
3 determine reasonableness of taxes and fees, for changes
4 ascertain ability to finance more programs + capital needs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Needs: investors and creditors

A

Know amount of available and likely future financial resources

To measure the debt position and ability to service debt

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Significant obstacle government reporting encounters pertaining to users needs?

A

User needs are so broad that no 1 set of financial statements
Or accounting principles can possibly satisfy all expectations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

2 sets of statements produced by state and local governments

A

1 fund financial statements

2 government-wide financial statements

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Fund financial statements: 3 functions

A

1 give picture of current activities of government
2 report current period revenues and expenditures in connection
With individual government functions

3 disclose restrictions placed on use of resources of gov activities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Who is likely to study the fund financial statements?

A

Citizens interested in the operation of government

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What time horizon do government wide financial statements have?

A

Longer term focus

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Government wide financial statements report…4

A

1 All revenues
2 all costs
3 assets
4 liabilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Who is interested in government wide financial statements?

2) why?

A

Creditors, especially bondholdrs

2) to assess the likelihood of being paid when obligations come
Due

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Fund financial statements report…2

A

1 individual government activities and amount of financial resources
Allocated to them each period

2 use made of resources

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Through fund financial statements, citizens can assess the government’s…

A

Fiscal accountability in raising and utilizing money

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

What services do fund financial statements report on? 4

A

1 public safety
2 education
3 health and sanitation
4 construction of new roads

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

The primary measurement focus for public service activities is the amount and changes in…

A

Current financial resources such as cash and receivables

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

The timing and recognition of revenues and expenses in fund financial statements is based on…

A

Modified accrual accounting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

When does modified accrual accounting recognize revenues?

2) when does it recognize expenditures?

A

Rev: when resulting current financial resources are both measurable
And available for use

2) expenditures: when they reduce current financial resources

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

In government accounting the term to be “used” means that current financial resources will…

A

Be received soon enough in the future to be used in paying for
Current period expenditures

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Determination of “soon enough” is up to who?

A

The reporting government

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Recognition of property taxes, what is the period?

A

60 day maximum period

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Government wide financial statements, why were they created?

A

To report government’s financial affairs as a whole

Provide method to assess operational accountability and
Governments ability to meet its operating objectives

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

Government wide financial statements, how they help users:

Determine whether the government’s overall…

A

Financial position improved or deteriorated during the reporting
Period

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

Government wide financial statements, how they help users:

Understand the costs of…

A

Providing services to citizenry

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

Government wide financial statements, how they help users:

See how the government…

A

Finances its programs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

Government wide financial statements, how they help users:

Understand the extent to which the government has invested in…

A

Capital assets (roads, bridges, other infrastructure)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

Government wide financial statements, why have they become relevant in recent years?

A

A number of local governments have declared bankruptcy or
Face financial difficulties

There is a need to assess financial stability with state and local
Government

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

To achieve its reporting goals, government wide financial statements measurement focus is on all…

A

Economic resources (not just financial resources)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

What type of accounting is utilized by government wide financial statements?

A

Accrual accounting (similar to business entities)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

What is the cornerstone of all financial reporting in government?

A

Accountability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

Accountability, what does it require?

A

Requires governments to answer to citizenry

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

Fund financial statements allow readers to focus on…

A

Individual government activities (police department, library)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

What 3 questions do fund statements answer?

A

1 how did the government generate its current financial resources?

2 where did those financial resources go?

3 what amount of those financial resources is presently held?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
44
Q

Current financial resources

A

Monetary assets available for officials to spend to meet the
Government’s needs this year

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
45
Q

When reporting current financial resources, a government is primarily monitoring what 4 items?

A

1 cash
2 investments
3 receivables
4 current claims to those resources

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
46
Q

Historically, which 3 accounts have never been seen to have a direct impact on current financial resources?

A

1 buildings

2 equipment

3 long term debt

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
47
Q

Fund financial statements: emphasis

A

Individual public service activities during the current period

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
48
Q

Fund financial statements: measurement focus

A

Current financial resources (cash, investments, receivables, claims
On those assets)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
49
Q

Fund financial statements: general information

A

Inflows and outflows of current financial resources

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
50
Q

Fund financial statements: timing and recognition

A

Modified accrual accounting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
51
Q

Government-wide financial statements: emphasis

A

Government as a whole

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
52
Q

Government-wide financial statements: measurement focus

A

All economic resources (all assets, liabilities, other resources)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
53
Q

Government-wide financial statements: General information

A

Overall financial health

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
54
Q

Government-wide financial statements: timing and recognition

A

Accrual accounting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
55
Q

Fund

define, function

A

Separate quasi independent book keeping system

For internal monitoring purposes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
56
Q

Only the minimum number of funds consistent with legal and operating requirements should be established, because unnecessary funds result in…3

A

1 inflexibility

2 undue complexity

3 inefficient financial administration

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
57
Q

3 distinct groups of fund classification

A

1 governmental funds

2 proprietary funds

3 fiduciary funds

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
58
Q

2 reasons funds are classified into three distinct groups?

A

1 classification system provides clearer reporting of gov activities

2 separate groups allows for unique accounting principles to be
Applied to each

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
59
Q

Governmental funds

A

All funds that account for activities gov carries out primarily to
Provide citizens with services

Financed primarily from taxes and other general revenue sources

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
60
Q

Examples of accounts reported as government funds

A

Police and fire departments

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
61
Q

Proprietary funds

A

Account for gov’s ongoing activities, similar to those conducted
By for profit organizations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
62
Q

Proprietary funds encompass operations that assess a user charge so that…

A

Determining profitability or cost recovery is important

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
63
Q

Examples of accounts reported within proprietary funds?

A

Municipal golf course and toll road

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
64
Q

Fiduciary funds

A

Account for monies held by gov in a trustee or agency capacity

Such assets must be maintained for others and cannot be used
By the gov for its own programs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
65
Q

Common example of fiduciary fund

A

Monitoring of assets held in pension plan for government employees

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
66
Q

In many state and municipal accounting systems, governmental funds tend to dominate because…

A

A service orientation usually prevails

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
67
Q

Why are governmental funds subdivided into 5 categories?

A

Provide better reported info and control

Form an overall structure for financial reporting purposes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
68
Q

5 categories governmental funds are subdivided into

A 
1 the general fund
2 special revenue funds
3 capital projects funds
4 debt service funds
5 permanent funds
69
Q

The general fund

A

Accounts for and reports all financial resources not accounted
For/reported in another fund

Will often report major expenditures (eduction, public safety, social
Services, highways, etc.)

70
Q

Special revenue funds

A

Account for resources that are restricted or committed for a
Specific purpose other than debt payments or capital projects

Due to donor stipulations or legislative mandates, these financial
Resources must be spent in a designated fashion

71
Q

In special revenue funds, restrictions were attached to the revenue to require…

A

That the expenditure be used for specific operating purposes

72
Q

Example of special revenue funds

A

In Charlotte, NC, money from a room occupancy tax that must

Go towards support of NASCAR Hall of Fame

73
Q

Capital projects fund

A

Accounts for financial resources restricted, committed or assigned
for capital outlays (constructing bridges, school, municipal offices)

74
Q

Funding for capital outlays normally comes from…3

A

1 grants

2 sale of bonds

3 transfers from general revenue

75
Q

In Capital project funds, the actual capital asset being obtained is…

A

Not reported there

Only the money to finance the purchase or construction is recorded

76
Q

Debt service funds

A

Record financial resources accumulated to pay long term liabilities
And interest as they come due

Monitor balances currently available to make the eventual payment
To satisfy long term liabilities

Ex. Birmingham, Alabama reported approximately $34 million of
Cash and investments in its debt service funds to pay LT debt
And interest, for year ended the fund had $21.6 million in principal
Payments and $13.7 million in interest payments

77
Q

Debt service funds do not account for…

A

A government’s long term debt

78
Q

Permanent funds

A

Accounts for financial resources restricted by external donor,
Contract or legislation

Has stipulation that principal can never be spent, but any income
Can be used by the government, often for designated purpose

79
Q

Example of permanent funds

A

City of Dallas, TX reported holding $8 million from private donations

Whose income was designated to maintain 4 parks and help
finance other municipal projects

80
Q

Another name for private donations with designated income?

A

Endowments

81
Q

Proprietary funds

A

Fund category accounts for gov activities such as (bus system,
Toll road or subway) assess a user charge

Services resemble those found in the business world

82
Q

Because user charge helps the government make a profit/recover its cost, proprietary funds are reported in…

A

Much the same way on both fund financial statements and

Government wide financial statements

83
Q

Proprietary funds are broken down into what 2 divisions?

A

1 enterprise funds

2 internal service funds

84
Q

Enterprise funds

A

Any gov operation open to the public and financed (at least in part)
By user charges

85
Q

The number of enterprise funds has increased dramatically over recent years as gov officials attempt to expand services without raising taxes, thus those citizens utilizing a particular service must…

A

Shoulder a higher percentage of its cost

86
Q

Example of enterprise funds

A

Municipalities: Public swimming pools, golf course, airport, water
and sewage service

87
Q

Which any 3 criteria can be met to require an activity to be classified as an enterprise fund?

A

1 activity generates revenues that provide sole security for debts
Of activity
2 laws or regulations require recovering activity’s costs (including depreciation and debt service) through Fees or charges
3 fees and charges are set at prices intended to recover costs
Including depreciation and debt service

88
Q

Internal service funds

A

Accounts for operation that provides services to another

department or agency within the gov for a fee

89
Q

Internal service funds charge for their services, but here the work is for the primary benefit of…

A

Parties within the government (rather than outside users)

90
Q

Both proprietary funds and fiduciary funds: timing of revenues and expenses

A

Use economic resources measurement focus and accrual

accounting

91
Q

Because these assets are not available for the benefit of the government, fiduciary funds are…

A

Omitted entirely from government wide financial statements

Although separate statements are included within fund financial
Statements

92
Q

4 distinct types of fiduciary funds

A

1 investment trust funds
2 private purpose trust funds
3 pension trust funds
4 agency funds

93
Q

Investment trust funds

A

Accounts for outside portion of investment pools when the
reporting gov has accumulated financial resources from other govs

In order to have more money to invest so that higher rate of
Return can be earned

94
Q

Investment trust fund example

A

Commonwealth if Virginia held $2.5 billion in local gov investment
pool that helps local govs maximize return

By commingling resources for investment purposes

95
Q

Private purpose trust funds 3

A

Accounts Monies held in trustee capacity for benefit of specifically
Designated external parties (invididuals, privates orgs, other govs)

Unclaimed property is usually recorded here

Ex. Education savings trusts

96
Q

Pension trust funds 3

A

Accounts for assets being held to pay employee benefits after
Retirement

Fund reports all assets held, but only current liability amounts

Ex. City of Philadelphia reported assets of $5 billion for its pension
Trust fund

97
Q

Agency funds

A

Records any resources a gov holds as an agent for individuals,
Private orgs or other gov units

Ex. One gov can collect taxes and tolls for another

98
Q

Money often passes through agency fund…

A

Very quickly

99
Q

To ensure safety and control, the agency fund…

A

Separately maintains this money until transferred to the proper authority

100
Q

2 financial statements that make up government wide financial statements

A

1 statement of net position

2 statement of activities

101
Q

Government wide financial statements, how is the reporting separated?

A

Separated into governmental activities and business type activities

102
Q

2 fund financial statements covered in the chapter

A

1 balance sheet

2 statement of revenues, expenditures and changes in fund
balances

103
Q

In fund financial statements major funds, how are they reported?

A

Are reported in their own separate column

While other governmental funds are grouped into a single column

104
Q

What is the criterion to be considered a major fund? 3

A

1 total assets, liabilities, revenues or exp. Are at least 10 % of
Total for all funds of that category (total governmental or total
enterprise funds)
And
2 at least 5 percent of corresponding total for all governmental
+ enterprise funds combined

3 or can be reported as major if government officials think it’s
Important

105
Q

Fund balance (in fund financial statements), define

2) What is not needed?

A

Indicates amount of net current financial resources at that time
For each separate fund

2) stockholder’s’ equity section is not needed on balance sheet

106
Q

What is the purpose of the 5 fund balance classifications?

A

To indicate the availability to government officials of this excess
Amount

107
Q

5 fund balance classifications

A 
1 fund-balance - Nonspendable
2 fund-balance - restricted
3 fund-balance - committed
4 fund-balance - assigned
5 fund-balance - unassigned
108
Q

fund-balance - Nonspendable

A

Amount of funds resources can’t be spent

indicates assets are present but not available for gov spending

109
Q

What 2 situations of reporting of fund-balance - Nonspendable necessary?

A

1 some assets (supplies or prepaid expenses) aren’t in spendable
Form

2 financial resources are occasionally received that can’t be
Spent because of externally imposed limitations (gift with stipulation)

110
Q

fund-balance - restricted

A

Indicates amount of assets held by gov must be spent in manner
Designated by external party

Ex. Grant from government to teachers to be used in certain manner,
Bond covenant requires proceeds to be used in certain manner

111
Q

fund-balance - committed

A

Assets have been designated for a particular purpose, by a highest
Level decision maker in the government (not by an outside party)

Money can be switched if necessary

Ex. State legislature sets aside $100 million to build a highway

112
Q

fund-balance - assigned

A

Frequently, In regular operations of gov money is designated for
Specific purpose without formal action by highest level decision
Maker

Money can be switched if necessary

Ex. Gov’s finance committee designates $1 million cash to be used
In a few months to pay current installment of bond

113
Q

fund-balance - unassigned

A

Only found in general fund and reflects any amount of resources
Where no use has been designated externally or internally

This money is available to government officials for any purpose
Viewed as appropriate

114
Q

Advantage of having 2 sets of records?

A

Reduces what would otherwise be massive amount of work at

The end of each fiscal year

115
Q

Budgeting is an essential element of what 3 areas in government?

A

1 financial planning

2 control

3 performance evaluation processes

116
Q

Governments usually adopt budgets that have the force of law,
Are subject to…

A

Sanction for overspending budgetary authorizations and have

Extensive controls to ensure budgetary compliance

117
Q

Budget

A

Legally approved plan for operations

118
Q

Budgets: the first significant accounting procedure encountered by state and localities?

A

Recording budgetary entries

119
Q

To enhance accountability, government officials normally are required to adopt…

2) why?

A

An annual budget for each separate activity

2) to anticipate inflow of financial resources and establish approved
Expenditure levels

120
Q

Important purpose budget serves:

Expresses…

A

Public policy

Ex. If more money is budgeted for child care and less for the environment, citizens are made aware of decision

121
Q

Important purpose budget serves:

Serves as an expression of…

A

Financial intent for upcoming fiscal year

122
Q

Important purpose budget serves:

Provides control because it…

A

Establishes spending limitations for each activity

123
Q

Important purpose budget serves:

Offers a means of…

A

Evaluating performance by allowing comparison of actual results
With levels set in budget

124
Q

Important purpose budget serves:

Indicates whether the government anticipates having…

A

Sufficient revenues to pay for all of the expenditures that have
Been approved

125
Q

Appropriation

A

Authorized expenditure

126
Q

Budgetary fund balance (in fund financial statement)

A

Indicates an anticipated surplus

127
Q

Budgetary entries reflect a government’s…

A

Interperiod equity

128
Q

Interperiod equity

A

Alignment of revenues and spending during a period

And possible shift of payments to future generations

129
Q

If a government projects revenues as $10 million but approves expenditures of $11 million, the extra million must be…

A

Financed in some manner

Usually by issuance of debt to be paid in the future

130
Q

Government officials can vote to change appropriation levels of…

A

Budget if more or less money becomes available than anticipated

131
Q

Encumbrances

A

Recording of financial commitments

Budgetary procedure that has historically played a role in gov
Accounting

132
Q

In contrast to for profit accounting, purchase commitments and
Contracts are often recorded in…

A

Governmental funds prior to becoming legal liabilities

133
Q

What does the recording of encumbrances provide an efficient method for?

A

Monitoring financial commitments so officials won’t accidentally
Overspend a fund’s appropriated amount

134
Q

Encumbrances are recorded in which financial statement, which are they not recorded in?

A

Recorded in fund financial statement

Not recorded in government wide financial statements

135
Q

When is an encumbrance removed?

A

When assets are received/services rendered

And actual legal liability replace encumbrance

136
Q

At the end of the fiscal period, any encumbrances that remain outstanding are…

A

Removed from accounting records by reversing original entry

137
Q

When are encumbrance entries not needed?

A

If fund balance has already been reclassified as restricted,
committed or assigned in recognition of eventual expenditure

138
Q

Purchases method

A

Used by governmental funds to account for prepaid costs

Records prepaid costs as expenditures at point that claim to
Financial resources is created (rather than capitalizing to inventory)

139
Q

For disclosure purposes, any remaining supplies or prepaid items (such as rent or insurance) are…2

A

Entered into accounting records as assets just prior to production
Of financial statements

At that time asset is recorded with offsetting amount in
fund balance-Nonspendable

140
Q

Purchases method reflects modified accrual accounting because…

A

The entire cost is recognized as an expenditure when current
financial resources are initially reduced

141
Q

Consumption method, what does it parallel?

A

parallels process used in creating government wide financial
Statements

142
Q

Consumption method

A

Supplies or prepayments are recorded as assets

Subsequently, as utility is consumed by usage of time, cost is
Reclassified into expenditures account

143
Q

When is the expenditure recognized under the consumption method?

A

Recognized in period of specific usage

144
Q

Under the consumption method, because these assets can’t be spent for government programs or other needs, an equal portion of fund balance account should be reclassified as…

A

Nonspendable

145
Q

Non exchange transactions

A

Revenues where no earning process exists

Gov does not provide a direct and equal benefit for the amount
Received

Ex. Property taxes, income taxes, grants, fines, gifts

146
Q

An earnings process does exist for…

A

Interest and rent

147
Q

4 classifications of non exchange transactions

A

1 derived tax revenues
2 imposed non exchange revenues
3 government mandated non-exchange transactions
4 voluntary nonexchange transactions

148
Q

Derived tax revenues

A

Tax assessment is imposed when underlying exchange takes
Place

Ex. Income tax, sales tax

149
Q

Imposed non exchange revenues

A

Property taxes, fines and penalties since gov mandates an

assessment, but no underlying transaction occurs

150
Q

Government mandated non exchange transactions

A

Monies, such a as grants conveyed from one gov to another

To help cover costs of required program

151
Q

Voluntary nonexchange transactions

A

Money has been conveyed willingly to the state or local gov by an individual, another gov or organization

usually for particular purpose

152
Q

Accounting for imposed non exchange revenues is a bit more complicated because…

A

No underlying transaction exists to guide timing of revenue

recognition

153
Q

4 eligibility requirements for government mandated or voluntary nonexchange transactions

A

1 required characteristics of recipients
2 time requirements
3 reimbursement
4 contingencies

154
Q

Time requirements

A

Programs can specify when the money is to be used

155
Q

Reimbursement AKA expenditure driven programs

A

Many grants are designed to reimburse gov for amounts spent

According to guidelines

156
Q

Contingencies (in voluntary nonexchange transactions only)

A

Revenue may be withheld until specified procurement action

Has been taken

157
Q

Although not revenue, the issuance of bonds serves as…

A

A major sources of financing for state and local governments

158
Q

Issuance costs of debt, accounting treatment

A

Expensed when incurred

159
Q

Bonds reacquired and an additional amount is paid, how are they reported on the statement of net position?

2) reacquired and less than net carrying amount is paid?

A

Deferred outflow of resources

2) deferred inflow of resources

160
Q

Tax anticipation notes, how are these short term debts recorded differently on fund statements vs. Government wide statements?

A

No

161
Q

Tax anticipation notes

A

Short term liabilities only outstanding until a certain amount of
Taxes are collected

162
Q

Government wide financial statements handle the debt and subsequent construction from special assessments in the same manner as…

A

For profit enterprises

163
Q

Inter fund transactions are commonly used within government units as a way to…

A

Direct sufficient resources to all activities and functions

164
Q

Inter fund transactions, which statements are they reported in?

Usually Not reported in?

A

Reported in fund statements

Usually not reported in government wide financial statements

165
Q

2 distinctions drawn for transfers in government wide financial reporting

A

1 Intra activity transactions

2 interactivity transactions

166
Q

Intra activity transactions

A

Occur between 2 governmental funds or between 2 enterprise
Funds

So totals aren’t affected and reported in government wide financial
Statements

167
Q

Interactivity transactions 3

A

Occur between governmental funds and enterprise funds

Impact total amount of resources reported for both governmental activities and business activities

Government wide financial statements doe report interactivity
Transactions

168
Q

The most common inter fund transactions are…

A

Transfers within governmental funds to ensure adequate financing
Of budgeted expenditures

169
Q

Other financing uses/sources

A

Designations appropriate on fund financial statements

Financial resources are being moved in and out of these funds
Although not with revenues or expenditures that have been earned
Or incurred

170
Q

Due to/Due from accounts

A

Equivalent of inter fund payable and receivable balances

FAIS 3 (17 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions