Chapter 8 Section 1: Governmental Accounting Overview Flashcards
What are the objectives of governmental accounting?
Operational and fiscal accountability
What are funds?
Legal restrictions of money. They’re like checkbooks
Who oversees governmental accounting principles and standards?
GASB
Who oversees accounting principles and standards for not-for-profits?
FASB
How are government-wide statements reported?
Full accrual
Economic resource measurement focus
How are governmental funds reported?
What are the major funds?
GRaSPP
Modified accrual Current financial resource measurement focus General Special Revenue Debt Service Capital Projects Permanent
Explain the general fund
Account for the ordinary operations
A catch-all for what doesn’t fit in other funds
Explain the special revenue fund
Account for revenues from specific taxes that are restricted to finance particular activities
Explain the debt service fund
Account for the accumulation of resources and payment of interest and principal on general obligation debt.
Explain the capital projects fund
Account for resources restricted for the acquisition or construction of major capital assets, except for what’s accounted for in the enterprise fund.
Explain the permanent fund
Report resources that are legally restricted so that only income (not principal) can be used
How is the balance sheet set up for gov’t funds?
Current assets and deferred outflows
= current liabilities + deferred inflows + fund balance
How is the statement of revenues, expenditures, and changes in fund balance set up for gov’t funds?
Rev - expenditures \+ other financing sources - other financing uses = net change in fund assets
How are proprietary funds reported?
What are the major funds?
SE
Full accrual
Economic resources measurement focus
Internal service
Enterprise
Explain the internal service fund
Account for goods and services provided by departments to service other departments within a gov’t unit
Primarily internal customers
Explain the enterprise fund
Account for the acquisition and operation of gov’t facilities and services that are primarily self-supported
Primarily external customers
How is the statement of net position set up for proprietary funds?
All assets and deferred outflows
- liabilities and deferred inflows
= net position
How is the statement of revenues, expenses, and changes in fund net position set up for proprietary funds
Operating rev - Operating exp \+ nonoperating rev - nonoperating exp = change in net position
How are fiduciary funds reported?
What are the major funds?
PAPI
Full accrual
Economic resources measurement focus
Pension trust
Agency trust
Private purpose trust
Investment trust
Explain the pension trust fund
Account for resources of pensions and other post-employment benefit plans
Explain the agency trust fund
Account for resources just temporarily in their custody. Like a mailman
Explain the private purpose trust fund
Designated funds to benefit specific individuals or organizations
Usually include escheat property
Explain investment trust funds
Account for external investment pools
How is the statement of fiduciary net position set up?
assets and deferred outflows
- liabilities and deferred inflows
= net position
How is the statement of changes in fiduciary net position set up?
Additions
-Deductions
=change in net position
What changes when modified accrual is used?
No fixed assets
No long-term debt
Revenue is recognized when measurable and available
How do they define “available” for revenue recognition?
Within 60 days of year end
What are the classification of gov’t fund balances?
NU CAR
Nonspendable - noncash Restricted - external authorities Committed - resolutions, encumbered Assigned - gov't intends to obligate Unassigned - for all but general fund, will have negative balance
