Chapter 2 Flashcards
Funds established to account for resources held by a government in a purely custodial capacity for others.
Agency Fund
The city of Hannah has established a trust to provide resources to offset the costs of maintenance of the city-owend cemetery. The majority of the resources of this trust will be cemetery plot sales and donations from families of those buried in the cemetery. The trust corpus is nonexpendable in nature. Transactions associated with this trust activity would most likely be accounted for in a ____.
Permanent Fund
The notes to the financial statements typically are notes to bot the ____ and ____ financial statements.
fund and government wide
Funds established to account for the external portion of investment pools held by the sponsoring government.
Investment Trust Funds
Governmental accounting systems must provide data ____.
both for external reporting in conformity with GAAP and for controlling and reporting on finance-related legal compliance matters
For most governments, the majority of their general government activities and the largest number and dollar amount of their transactions are reported in the ____.
General Fund
Many other governments voluntarily accumulate amounts to repay the principal and interest on general long-term debt. These governments use ____ to maintain accountability over resources that are to be used to repay debt.
Debt Services Fund
Donation to the city where the principal is to remain intact forever and the earnings are to be used to benefit the Boy Scout and Girl Scout organizations in the city.
Private Purpose Trust Fund
True or false: The GASB does not specify how to maintain the nonfund accounts for general capital assets and general long-term liabilities.
True
The activities of a municipal employee retirement plan that is financed by equal employer and employee contributions should be accounted for in ___.
a Trust Fund
What are the four types of interfund activies?
Interfund loans, interfund services provided and used, Interfund reimbursements, and Interfund transfers
School buildings are accounted for in ____.
General Capital Assets
Cash and investments of a bond sinking fund established to service general governemnt long-term debt are accounted for in ___.
General Service Fund
Collects taxes withheld from employees throughout the government and makes payments to the appropriate government for these withholdings.
Agency Fund
A transaction in which a municipal electric utility issues bonds (to be repaid from its own operations) requires accounting recognition in ___.
Enterprise Fund
Grant proceeds that are restricted for a specific purpose are recorded in a ____.
special revenue funds account
Unrestricted tax revenues should be accounted for in ____.
General Fund
What is typically accounted for in the “water and sewer” Enterprise Fund?
municipal governments and special district operations of utilities. Example: Water treatment and sanitary sewage facilities for which they charge a fee to customers
Used to account for acquisition of major capital assets.
Capital Projects Fund
What are the two types of proprietary Funds?
Enterprise Funds; Internal Service Funds
The ____ of a state or local government are secured by the general credit and revenue raising powers of the government rather than by the assets acquired or specific fund resources.
General Long-Term Liabilities
The city would account for the actuates of a central garage in the ____.
Internal Service Funds
Governments must comply with the many _____.
finance-related legal and contractual requirements, regulations, restrictions, and agreements
The actiities of a central motor pool that provides and services vehicles for the official use of municipal employees from several city departments and charges them a fee to recover costs incurred should be accounted for in _____.
Internal Service Fund
GAAP based financial statements are necessary to ensure ____.
proper external financial reporting and a reasonable degree of comparability among the annual financial statements of governments across the nation
Where would the payment of cash to employees for monthly salaries be recorded?
General Funds
_____ financial statements are highly summarized.
Government-Wide
Bond proceeds fund (to account for proceeds or bonds issued to finance street construciton) are accounted for in ___.
Capital Projects Funds
The montly remittance to an insurance company of the lump sum of hospital-surgical insurance premiums collected as payroll deductions from employees should be recorded in ____.
Agency Fund
The ____ financial statements are more detailed than the ____ statements.
fund; government-wide
Recognized in governmental fund financial statements: Generally net financial assets expended during a period for current operations, capital outlay, long-term debt principal retirement, and interest.
Expenditures
What are the 5 types of local governments?
Counties; Municipalities; Townships; School Districts; Special Districts
A government’s accounting system must be designed to _____.
maintain and provide information to accomplish multiple purposes
Which of the following should be reported as expenditures in governmental funds? Which should be accounted for as Expenses?
A. Salaries
B. Interst on short-term debt
C. Purchae of Equipment
D. Long-term liability principal retirement
E. Depreciation
F. Short-Term Liability Principal Retirement
Expenditures: Salaries, Interest on Shert-term debt, Purchase of equipment, Long-term liability principal retirement
Expenses: depreiation, short-term liability principal retirement
Where would the receipt of a bill from the contractor for construction costs on a building be recorded?
Capital Projectes
What are the three required financial statements included in the basic financial statements?
Government-Wide Statements Fund Financial Statements Notes to the Financial Statements Retained Earnings
Tax revenues resturcted for road maintenace should be recorded in ___.
Special Revenue Fund
Not accounted for in governmental financial statements.
General long-term liabilities
Electric Fund (to account for revenues received from the sale of electricity to the public) are accounted for in which accounts?
Enterprise Funds
General government activities commonly reported in the general fund include what?
Police protection, fire protection, general administration, street maintenance, and public park maintenance.
The financial reporting model has been called a ____ model.
Duel Perspective
A county may use an ____ to account for the activities of a central duplicating and printing department that serves various county departments.
Internal Service Funds
The transactions of a Community Development Block Grant that must be used to finance rehabilitation of privately owned housing in an economically depressed neighborhood of the city typically would be reported in which funds and or nonfund accounts?
Special Revenue Fund only
General government liabilities (except unmatured general long-term liabilities) payable from governmental funds
Related Liabilities
A transaction in which a municipal electric utility paid $150,000 out of its earnings for new equipment requires accounting recognition in ____>
Enterprise Fund
The portion of general government bods payable that matures in the next fiscal year are accounted for in __.
General Capital Assets & General Long-Term liability
Receipts from a special fishing tax restricted to maintain the (no-charge) public fishing pier.
Special Revenue Fund
Bond redemption fund (to account for taxes and other revenues to be used in retiring bonds) is accounted for in ___.
Debt Services Fund
Long-term note for the government’s entral motor pool that “rents” vehicles to other departments and agencies of the government at a rate that reimburses its costs is accounted for ___.
Internal Service Fund
Funds used to account for assets held by a government in a trustee or agency capacity for the benefit of others.
Fiduciary Funds
_____ accounting measures net position, changes in net position, and cash flows.
Proprietary Fund
Operating Fund (to account for unrestricted revenues not related to any other fund) is accounted for in ___.
General Fund
In governmental funds, cash, investments, and receivables.
Financial Assets
What is the main difference between expenditures and expenses?
Expenditures typically reflect the net financial assets expended to acquire goods or services, whereas expenses reflect the costs of goods sold or services used
Bonds payable issued in a prior year for general government purposes is accounted for in ____.
General Capital Assets & General Long-Term Liabilities Funds
Amounts owed to general government bondholdersthat must be paid in the future.
General Long-Term Liability Accounts
A transaction in which a municial electric utility paid $150,000 out of its earnings for new equipment requires accounting recognition in a ___ fund.
Enterprise Fund
What are common activities that may be accounted for in the Internal Service Funds.
Central stores, health care and other self-insurance activities, and computer services departments
Internal Services Funds are classified as ___.
Proprietary Funds
Who is the predominant customer for Enterprise Funds?
the general public (as well as businesses and other entities beyond the government’s own departments or agencies)
Do not represent financial resources available for expenditure, but are items for which financial resources have been used and for which accountability should be maintained
General Capital Assets
May be used to account for any activity of a fund, department, or agency that provides goods or services primarily to other funds, departments, or agencies of the governmental unit, or to other governmental units on a cost-reimbursement basis.
Internal Service Funds
Financial assets include ____?
Cash, Investments, and Receivables
Transactions between funds are referred to as ___.
Interfund Activity
Purchase of police cars and fire trucks would be accounted for where?
General Fund
Detailed presentations of fund net position or fund balance, operating results, and cash flows.
Fund Financial Statements
Funds that are established to account for and report financial resources that are restricted, committed, or assigned to expenditure for principal and interest.
Debt Service Funds