Chapter 8 Section 1: Governmental Accounting Overview

Question 1

What are the objectives of governmental accounting?

Answer 1

Operational and fiscal accountability

Question 2

What are funds?

Answer 2

Legal restrictions of money. They’re like checkbooks

Question 3

Who oversees governmental accounting principles and standards?

Answer 3

GASB

Question 4

Who oversees accounting principles and standards for not-for-profits?

Answer 4

FASB

Question 5

How are government-wide statements reported?

Answer 5

Full accrual

Economic resource measurement focus

Question 6

How are governmental funds reported?
What are the major funds?

GRaSPP

Answer 6

Modified accrual
Current financial resource measurement focus
General
Special Revenue
Debt Service
Capital Projects
Permanent

Question 7

Explain the general fund

Answer 7

Account for the ordinary operations

A catch-all for what doesn’t fit in other funds

Question 8

Explain the special revenue fund

Answer 8

Account for revenues from specific taxes that are restricted to finance particular activities

Question 9

Explain the debt service fund

Answer 9

Account for the accumulation of resources and payment of interest and principal on general obligation debt.

Question 10

Explain the capital projects fund

Answer 10

Account for resources restricted for the acquisition or construction of major capital assets, except for what’s accounted for in the enterprise fund.

Question 11

Explain the permanent fund

Answer 11

Report resources that are legally restricted so that only income (not principal) can be used

Question 12

How is the balance sheet set up for gov’t funds?

Answer 12

Current assets and deferred outflows

= current liabilities + deferred inflows + fund balance

Question 13

How is the statement of revenues, expenditures, and changes in fund balance set up for gov’t funds?

Answer 13

Rev
- expenditures
\+ other financing sources
- other financing uses
= net change in fund assets

Question 14

How are proprietary funds reported?
What are the major funds?

SE

Answer 14

Full accrual
Economic resources measurement focus

Internal service
Enterprise

Question 15

Explain the internal service fund

Answer 15

Account for goods and services provided by departments to service other departments within a gov’t unit
Primarily internal customers

Question 16

Explain the enterprise fund

Answer 16

Account for the acquisition and operation of gov’t facilities and services that are primarily self-supported
Primarily external customers

Question 17

How is the statement of net position set up for proprietary funds?

Answer 17

All assets and deferred outflows
- liabilities and deferred inflows
= net position

Question 18

How is the statement of revenues, expenses, and changes in fund net position set up for proprietary funds

Answer 18

Operating rev
- Operating exp
\+ nonoperating rev
- nonoperating exp
= change in net position

Question 19

How are fiduciary funds reported?
What are the major funds?

PAPI

Answer 19

Full accrual
Economic resources measurement focus

Pension trust
Agency trust
Private purpose trust
Investment trust

Question 20

Explain the pension trust fund

Answer 20

Account for resources of pensions and other post-employment benefit plans

Question 21

Explain the agency trust fund

Answer 21

Account for resources just temporarily in their custody. Like a mailman

Question 22

Explain the private purpose trust fund

Answer 22

Designated funds to benefit specific individuals or organizations
Usually include escheat property

Question 23

Explain investment trust funds

Answer 23

Account for external investment pools

Question 24

How is the statement of fiduciary net position set up?

Answer 24

assets and deferred outflows
- liabilities and deferred inflows
= net position

Question 25

How is the statement of changes in fiduciary net position set up?

Answer 25

Additions
-Deductions
=change in net position

Question 26

What changes when modified accrual is used?

Answer 26

No fixed assets
No long-term debt
Revenue is recognized when measurable and available

Question 27

How do they define “available” for revenue recognition?

Answer 27

Within 60 days of year end

Question 28

What are the classification of gov’t fund balances?

NU CAR

Answer 28

Nonspendable - noncash
Restricted - external authorities
Committed - resolutions, encumbered
Assigned - gov't intends to obligate
Unassigned - for all but general fund, will have negative balance