Brainscape's Knowledge GenomeTM

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


See full index

ACCT 5130 > Chapter 17 > Flashcards

Chapter 17 Flashcards

1
Q

Governments General Funds

A

Governments don’t record fixed assets or long term debt

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

interperiod equity

A

determined whether current year revenues are sufficient to pay for services provided during that year or if future tax payers will be required to assume burdens for services previously provided or deficits created in prior years.

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

statement No 1

A

Governmental Accounting and Financial Reporting Principles

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

fund accounting

A

accounting for government entities

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

modified accrual method

A

used by government entities

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

elements of gov. financial statements

A
  1. Assets - Resources with present service capacity that the entity presently controls.
  2. Liabilities - Present obligations to sacrifice resources that the entity has little or no discretion to avoid
  3. a deferred outflow of resources - a consumption of net assets that is applicable to a future reporting period
  4. deferred inflow of resources - an acquisition of net assets that is applicable to a future reporting period..
  5. Net position - the residual of all other elements presented in a statement of financial condition
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

resource flows statement elements

A

outflow of resources - a consumption of net assets that is applicable to the current reporting period
inflow of resources - an acquisition of net assets that is applicable to the current reporting period

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

focus of gov accounting

A

changes in current financial resources available to provide services to the public in accordance with the governmental entity’s legally adopted budget

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

funds

A

units fiscal and accounting entities

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

expenditures

A

refers to decrease in net financial resources available under the current financial resources measurement focus

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

government funds

A
  1. general fund
  2. special revenue fund
  3. capital project fund
  4. debt service funds
  5. permanent funds
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

proprietary funds

A

enterprise funds

internal service funds

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

fiduciary funds

A

trust fund:
1. pension and other employee benefit trust funds
2. investment trust funds
3. private purpose trust funds
agency fund:
used to account for resources the government holds, solely in a custodial capacity

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

permanent fund

A

a fund that includes resources that are legally restricted so that the entity must maintain the principal and can use only the earnings from the fund’s resources to benefit the government’s programs for all citizens

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

(governmental fund) general fund

A

accounts for all financial resources except for those accounted for in another fund. includes transactions fro general governmental services provided by the entity’s executive, legislative, and judicial operations

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

(governmental fund) special revenue fund

A

accounts for the proceeds of specific revenue sources that are restricted for specified purposes. Includes resources and expenditures for operations, such as public libraries when a separate tax is levied for support

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

(governmental fund) capital project fund

A

accounts for financial resources for the acquisition or construction of the facilities and is closed once the project is completed

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

(governmental fund) debt service fund

A

accounts for the accumulation of resources for , and the payment of, general long-term debt principal and interest. This fund is used for servicing the government’s long term debt.

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

(governmental fund)permanent fund

A

accounts for resources that are restricted such that only earnings, but not principal, may be used in support of governmental programs that benefit the government or its citizenry

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

(proprietary fund) enterprise fund

A

accounts for operations of governmental units that charge for services provided to the general public. Includes activities financed in a manner similar to private business enterprises regarding the governing body’s intent to recover the costs of providing goods or services to the general public on a continuing basis through user charges. Includes operations that will run at a profit

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

(proprietary fund) internal service fund

A

accounts for the financing of good or services provided by one governmental unit’s department or agency to other of its departments or agencies. Usually provided on a cost reimbursement basis and are only offered to governmental agencies
example:
motor pool

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

(fiduciary funds) trust funds

A

pension trust fund - accounts for resources required to be held in trust for the members and beneficiaries of pension plans, other postemployment benefit plans, or other employee benefit plans

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

(fiduciary fund)investment trust funds

A

accounts for the external portion of investment pools reported by the sponsoring government

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

(fiduciary fund)private purpose trust fund

A

accounts for all other trust arrangements under which the fund’s resources are to be used to benefit specific individuals, private organizations, or other governments as the trust agreement specified

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

agency fund

A

accounts for assets held by a governmental unit in an agency capacity for employees or for other governmental units. An example is the city employees’ payroll withholding for health insurance premiums

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

reporting entity

A 
primary government, 
component units(legally separate organizations for which the primary unit has financial accountability),
other organizations that have a significant relationship with the primary government and need to be included in its financial statements to avoid misleading or incomplete financial representations
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

GASB 14

A

states that financial accountability exists if the government appoints a majority of an organization’s governing body and is able to
impose its will on the organization or
possesses a financial benefit or assumes a financial burden for the organization

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

government financial reporting model

A

has two integrated levels of financial statements:

  1. fund based financial statements p demonstrate fiscal accountability of the management of each fund
  2. government wide financial statements - a reconciled statement to go from the governmental fund to the government wide financial statements
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

governmental fudns

A

balance sheet

statement of revenues, expenditures, and changes in fund balance

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

balance sheet

A 
assets(financial resources available for current use; presented in order of liquidity)
total assets
Liabilities & Fund Balances
Liabilities(due and expected to be paid from current financial resources; presented in order of due date)
Fund Balances
Nonspendable
Spendable:
   Restricted
   Limited
   Assigned
   Unassigned
Total Liabilities & Fund Balances
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

current financial resources management focus

A

asset section of the balance sheet reports only financial assets such as cash or other assets that will convert into cash in the normal course of operations over the near future, which has been determined to mean within 60 days after the reporting period end.

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

liabilities in government FS

A

only those liabilities that have become due and will require current financial resources to liquidate, such as vouchers payable or the current portion of long-term debt.
short term debt is usually debt using future taxes as collateral

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

fund balance

A

difference between assets and liabilities

34
Q

two categories of fund balance

A

nonspendable fund balances
amounts that are not in spendable form, such as amounts related to inventories and prepaid items, or required by legal or contractual provisions to be maintained intact, such as the principal of a permanent fund
spendable fund balances
amounts that are available for spending. Amounts in this portion of the fund balance would be further classified as restricted, limited, assigned, or unassigned.

35
Q

statement of revenues, expenditures, and changes in fund balance for governmental funds

A

often called the operating statement

  1. Operating section: contains the revenues less expenditures for the period with the difference indicated as the excess of revenues over expenditures.
  2. Other financing sources or uses: nonrevenue items such as bond issue proceeds and interfund transfers
  3. Special and extraordinary items: lists extraordinary items that are both unusual and infrequent, such as losses due to a hurricane. Special items are transactions within management’s control that are either unusual or infrequent in occurrence. Example sale of a county park
  4. Fund Balance: bottom portion includes the balances of both the beginning and the ending fund.
36
Q

revenues

A

recognized when they become measurable and available to finance expenditures of the fiscal period

37
Q

expenditures

A

reports reductions in available current financial assets. Only when the governmental entity receives approved services or goods does it recognize the expenditure.

38
Q

other financing sources and uses

A

the second section of the operating statement, reports changes in current financial resources from nonrevenue items, such as sales of bonds or interfund transfers with other funds of the governmental entity.

39
Q

special items

A

this section includes unusual or infrequent items that affect the fund balance but are not revenue or expenditure items.

40
Q

fund balance section

A

indicates the change in the fund balance to obtain its ending fund balance whose amount should reconcile to the total fund balance shown on the balance sheet

41
Q

measurement focus

A

the flow that should be measured for operations

42
Q

basis of accounting

A

the timing of recognizing a transaction for financial reporting purposes

43
Q

modified accrual basis

A

a hybrid system that includes some aspects of accrual accounting and some aspects of cash basis accounting
used in funds that have a flow of current financial resources measurement focus
five governmental funds use this(ex:general fund, special revenue fund, capital projects fund, debt service fund, permanent fund)

44
Q

economic resources measurement focus

A

accrual basis is used in these funds

proprietary and fiduciary

45
Q

modified accrual basis

A

revenue: recorded in the accounting period in which it is both measurable and available to finance expenditures made during the current fiscal period
expenditures: recognized in the period in which the liabilities are both measurable and incurred and are payable out of current financial resources

46
Q

revenue from nonexchange transactions

A

revenue from things like taxes that don’t require an exchange

  1. derived tax revenues(inc & sales tax)
    a. asset(cash or receivable) recognized when the underlying transaction occurs or resources are received, whichever comes first
    b. revenue recognition:depends on the accounting basis used to measure the transaction. Under accrual accounting(proprietary and fiduciary funds) revenue is recognized when the underlying exchange transaction occurs. Under modified accrual accounting(governmental funds), revenue is recognized when the underlying exchange has occurred and the resources are available
  2. imposed non exchange revenues: ex: property taxes or fines
    a. asset:recognized when the gov has an enforceable legal claim to the resources or has received them, whichever comes first
    b. revenue recognition: made in the period when use of the resources for current expenditures is first permitted or required or when the asset is recorded if no time restriction on the fund’s use of the resources exists
  3. Government mandated nonexchange transactions: example revenue from other sections of government
  4. Voluntary nonexchange transactions: from legislative or contractual agreements other than exchanges. Ex: certain grants and private donations
47
Q

revenue is recognized 60 days after the period as

A

a deferred revenue in the current period and revenue in the following period

48
Q

income taxes and sales tax

A

recognized in the period they are imposed or received whichever comes first

49
Q

miscellaneous revenue

A

license fees, fines, parking meter revenue, and charges for services are generally recorded when the cash is received because these amounts cannot be predicted accurately.

50
Q

grants, entitlements, and shared revenue

A

grants - contributions from another governmental unit to be sued for a specified purpose, activity, or facility.
entitlements - payments local governments are authorized to receive as determined by the federal government.
shared revenue - levied by one governmental unit but shared with other son some predetermined basis

51
Q

proceeds from the sale of bonds

A

not revenue, they are classified as other financing sources on the statement of revenues, exp, and changes in fund balance

52
Q

recognition of expenditures

A

modified accrual accounting - recorded when measurable and incurred ex:

  1. costs for personal services, such as wages and salaries, are generally recorded in the period paid because they are a governmental units normal, recurring expenditures.
  2. goods and services obtained from outside the gov entity are recorded as expenditures in the period in which they are received
  3. Capital outlays for equipment, buildings, and other long term facilities are recorded as expenditures in the period of acquisition.
  4. Interest on long-term debt is recorded in the period in which it is legally payable.
53
Q

two major proprietary funds

A

internal service fund and the enterprise fund

both use the accrual method of accounting

54
Q

fiduciary funds

A

uses accrual basis
ex:
agency fund - only have assets and liabilities; no fund equity, revenue, expenditures are used, ex: county’s billing and collecting tax system,
after the taxes are collected they are distributed to each unit based on their tax levy

55
Q

operating budgets

A

specify expected revenue from the various sources provided by law, expected expenditures for various line items, such as employee payrolls, supplies, etc.
used in general fund, special revenue fund, and sometimes debt service fund

56
Q

capital budget

A

prepared to provide info about proposed construction projects such as new buildings or street projects.

57
Q

appropration

A

legal description of the authority to expend resources

58
Q

Record general fund budget

A

est revenues control
appropriations control
budgetary fund balance - unassigned

59
Q

estimated rev account

A

anticipatory asset; the gov anticipates receiving this

60
Q

appropriations control

A

anticipatory liability

61
Q

budgetary fund balance

A

the excess unassigned rev

62
Q

steps to an expenditure

A
  1. appropriation
  2. encumbrance - reservation of part of the budget
  3. expenditure - it occurs
  4. disbursement - payment of cash for expenditure
63
Q

encumbrance JE

A

encumbrances

budgetary fund balance assigned for encumbrencas

64
Q

expenditure JE

A

budgetary fund balance - assgn for encumb (total amount)
encumbrances (total amount)
Expenditures (actual amount)
Vouchers Payable (actual amount)

65
Q

remaining appropriations available

A

appropriations - (encumbrances+expenditures)

66
Q

disbursement JE

A 
Vouchers Pay( actual amount)
   cash                       (actual amount)
67
Q

expenditures classification for governmental funds

A 
fund - identified to show the specific source of the expenditure
character - based primarily on the period the expenditures are anticipated to benefit ex: current, capital outlay, debt service, and intergovernmental
function - group related activities directed at accomplishing a major service or regulatory responsibility.
organizational unit - maintains each unit director's accountability. 
activity - recorded to maintain a record of the efficiency of each activity
object class - groups types of items purchased or services obtained
68
Q

lapse of outstanding encumbrances

A

where we get rid of what happened last year
JE to eliminate reserve for outst. encumb not being renewed
Fund Balance Assign for Encumb 15000
Fund Bal - Unassigned 15000

69
Q

nonlapsing outstanding encumbrances at year end

A

Jan 1 entry
Fund Balance - Assigned for encumb 15000
Fund Balance - Assigned for encumb 2001 15000

70
Q

purchase method of accounting for inventories

A 
in this method the entire amount purchased is expended
acquisition 
Expenditures 2000
  Vouchers Pay 2000
Inventory of Supplies 1400
  Fund Balance - Nonspend 1400
Following year
Fund Balance 900
   Inventory of Supplies 900
71
Q

consumption method of accounting for inventory

A 
In this method only the portion that is used is in ending expenditures
Expenditures 2000
   vouchers pay 2000
Inventory of supplies 1400
   Expenditures            1400
Fund Balance Un-assigned 1400
   Fund Balance - Nonspendable 1400
following year
Expenditures 900
  Inventory of Supplies 900
Fund Balance - Nonspendable 900
  Fund Balance - Unassigned      900
72
Q

acquisition of fixed assets

A 
reserve amount
encumbrances 12000
 budgetary fund bal - assigned for encumb 12000
cancel reserve
budgetary fund balance - assigned for encumbrances 12000
   Encumbrances 12000
Receive truck 
Expenditures   12500
   Vouchers Payable 12500
73
Q

works of art

A

the government is encouraged to capitalize works of art if

  1. holds the collection for public exhibition, education or research
  2. protects and preserves the collection
  3. has an organizational policy that requires the proceeds from sales of collection items to be used to acquire other item for collections
74
Q

long term debt and capital leases

A

cash

bond issue proceeds(included in other financing sources)

75
Q

investments

A

can be recorded at fair value if they meet certain criteria

76
Q

interfund activities

A

resource flows between fund entities

  1. interfund loans
  2. interfund services
  3. interfund transfers
  4. interfund reimbursements
77
Q

interfund loans

A 
entry on general fund
due from other fund
   cash
Cash 
   due from other fund
78
Q

interfund service provided and used

A 
general fund
expenditures 
   due to other fund
due to other fund 
   cash 
other fund
due from general fund
  charge for services
cash 
  due from general fund
79
Q

interfund transfers

A

general fund
other financing uses - transfer out to capital projects fund
Cash
other fund
Cash
other financing sources-transfer in from general fund

80
Q

interfund reimbursement

A 
general fund
cash 
  expenditures
other fund
expenditures
  cash
81
Q

general fund

A 
modified accrual 
financial statements
balance sheet
  current assets
  long term productive assets
  current liab
  long term debt
  fund balance
Statement of Rev, Exp, and changes in fund balance
  Revenue 
  Expenditures
  Other financing sources and uses
  changes in fund balance

ACCT 5130 (33 decks)

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