Chapter 3 Flashcards
Accounts that are closed at year-end?
Budgetary accounts Activity accounts (revenues, expenditures, other financing sources)
These accounts are not closed at year-end
Assets Liabilities Deferred inflow of resources Fund balances Deferred outflow of resources
Basis of accounting required for use by governmental funds.
Revenues are recognized in period in which they become available and measurable, and expenditures are recognized at the time liability is incurred except for principal and interest on long term debt, which are recorded when due.
Modified accrual basis
Measurement focus used for governmental funds by GASB that measures current financial resources, not fixed assets and long-term debt.
Current financial measurement focus
Recorded when liabilities are incurred pursuant to authority given in an appropriation. Designates the cost of goods delivered or services rendered, whether paid or unpaid, including current items, provision for interest and debt retirement, and capital outlays.
Used for governmental funds of governmental units.
Expenditures
The estimated amount of purchase orders, contracts, or salary commitments chargeable to an appropriation. A budgetary account recognized in governmental-type funds.
Encumberances
Authorization granted by a legislative body to incur liabilities for purposes specified in the appropriation act.
Appropriation
Governmental funds balance sheet
Assets
Liabilities
Deferred inflows of resources
Fund balance
JE for Budgetary Account
Dr- estimated revenues
Financing sources
Cr- Appropriations
Financing uses
Budgetary Fund Balance
JE Reimbursement Grant
1) incur qualified expenditures
2) recognize revenue
Dr- expenditures control
Cr- accounts payable
Dr- due from grantor
Cr- revenue control
JE advance funded grant
Receipts of advance funding
Incur expenditures and recognize revenues in equal amount
Dr - cash
Cr- deferred revenues grants
Dr - expenditures control
Cr- accounts payable
Dr- deferred revenues
Cr- revenues control
Expenditure cycle
City counsel approves fiscal year budget for general fund
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City departments issue purchase orders for goods and services
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Goods and services are received and invoices are presented for payment
Non-spendable
Inventories and prepaid items (current assets). They are considered non-spendable because they are used in operations.
Restricted fund
Restrictions arising from external parties include debt covenants or constraints imposed by legislation or federal state agencies
Committed fund
Represent the net resources of a governmental fund that the governing body has specified for particular use.
They should have been designated through ordinance or resolution by the government’s highest level of authority.
Contractual obligations
