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CMFO Exam > Current Fund > Flashcards

Current Fund Flashcards

1
Q

Step One -Closing Ledger Steps

A

Close prior year appropriation reserves to budget operations or accounts payable for contracts

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2
Q

Step Two - Closing Ledger Steps

A

Transfer Current Year Appropriations to Appropriation Reserves

  • Grants transferred to Grant Fund
  • Debt Service Unexpended Balances Canceled
  • RUT Charged Off
  • Deferred Charges Charged Off
  • Appropriation Cancellations Recorded
  • Overexpenditures setup as deferred charge
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3
Q

Step Three - Closing Ledger Steps

A

Realize Tax Revenue

  • Prepaid Taxes Applied
  • Overpayments applied and set up
  • Senior Citizen & Vet Deductions
  • Transfer to Tax Title Lien
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4
Q

Step Four - Closing Ledger Steps

A

Close Revenues to Budget Operations

-Grants transferred to Grant Fund

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5
Q

Step Five - Closing Ledger Steps

A

Close Operations to Fund Balance

-Deficit in Operations must be set up as a deferred charge

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6
Q

Current Fund Assets

A
  • Cash-Checking Account
  • Cash - CD
  • Cash - Change Fund
  • Investments
  • Due from State Senior & Vet Deductions
  • Current Year Tax Rec
  • Prior Year Tax Rec
  • Delinquent Taxes Rec
  • Tax Title Liens
  • Revenue Account Rec
  • Interfunds Rec (Due From)
  • Deferred Charges (Emergencies, Overexpenditures, Expenditure w/out App, Special Emergencies)
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7
Q

Current Fund Liabilities

A
  • Appropriation Reserves
  • Reserve for Encumbrances
  • Interfund Payable (Due to)
  • Payroll Deductions Payable
  • Prepaid Taxes
  • Tax Overpayments
  • School Taxes Payable
  • County Tax Payable
  • Reserve for Rec
  • Reserve for Tax Rec
  • Reserve for Tax Title Liens
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8
Q

Current Fund Revenues

A
  • Fund Balance
  • Misc Revenues Anticipated (Licenses, Fees & Permits, Court Fines, Interest on Taxes)
  • Receipt from Delinquent Taxes
  • Amount to be Raised by Taxation
  • MRNA
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9
Q

Current Fund Expenditures

A
  • Budget Appropriations (S&W, OE)
  • Capital Improvements
  • Debt Service
  • Statutory Expenditures
  • RUT
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10
Q

JE: To Record Budget

A

Debit: Revenues
Credit: Appropriations

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11
Q

JE: Charging Off RUT (charge non-spending appropriation)

A

Debit: RUT
Credit: Amount to be raised by taxation

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12
Q

JE: Deferred Charges Raised in Budget

A

Debit: Appropriations
Credit: Deferred Charges

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13
Q

JE: Capital Improvement Fund (Set up liability and charge budget for CIF raised in budget)

A

Debit: CIF
Credit: Due to General Capital Fund

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14
Q

JE: Recording Emergency Appropriations

A

Debit: Deferred Charges to Future Taxation: Emergency Appropriation
Credit: Appropriation

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15
Q

JE: Budget Transfers by Resolution

A

Debit: Appropriation Transferring From
Credit: Appropriation Transferring To

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16
Q

JE: Record Chapter 159 (Budget Amendment)

A

Debit: Revenue
Credit: Appropriation

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17
Q

JE: Setting Up Accounts Payable

A

Debit: Appropriations
Credit: Accounts Payable

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18
Q

JE: Setting Up New Appropriation Reserves

A

Debit: Appropriations
Credit: Appropriation Reserves

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19
Q

JE: Setting Up County and School Liability

A

Debit: Amount to be raised by taxation
Credit: School Taxes Payable, County Taxes Payable

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20
Q

JE: Setting up County Liability for Added and Omitted Taxes

A

Debit: Amount to be raised by taxation
Credit: County Taxes Payable for Added and Omitted Taxes

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21
Q

JE: Setting up Tax Levy

A

Debit: Tax Receivable
Credit: Reserve for Taxes Receivable

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22
Q

JE: Setting up Tax Levy for Added/Omitted Taxes

A

Debit: Taxes Receivable
Credit: Reserve for Taxes Receivable

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23
Q

JE: Setting up Sen & Vet Deductions per duplicate

A

Debit: Due From State - Sen & Vet Deductions
Credit: Taxes Receivable

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24
Q

JE: Setting up Sen & Vet Deductions per Tax Collector

A

Debit: Due From State - Sen & Vet Deductions
Credit: Taxes Receivable

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25
Q

JE: Record Cancelled Taxes Current Year (Tax Appeals, Vet Granted)

A

Debit: Reserve for Taxes Receivable
Credit: Taxes Receivable

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26
Q

JE: Record Cancelled Taxes Prior Year (Tax Appeal, Vet Granted)

A

Debit: Reserve for Prior Year for Taxes Receivable
Credit: Prior Year Taxes Receivable

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27
Q

JE: Record Tax Sale

A

Debit: Tax Title Liens
Debit: Reserve for Prior Year for Taxes Receivable
Credit: Reserve for Tax Title Liens
Credit: Prior Year Taxes Receivable

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28
Q

JE: Recording Accrued Interest at Date of Sale

A

Debit: Tax Title Liens
Credit: Reserve for Tax Title Liens

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29
Q

JE: Record Transfer of Current Taxes to Liens at Year End

A

Debit: Tax Title Liens
Debit: Reserve for Taxes Receivable
Credit: Reserve for Tax Title Liens
Credit: Taxes Receivable

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30
Q

JE: Applying Tax Overpayments

A

Debit: Tax Overpayments
Credit: Taxes Receivable

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31
Q

JE: Setting Up Overpayments (transfer the actual overpayment to tax overpayments on balance sheet)

A

Debit: Taxes Receivable
Debit: Prior Taxes Receivable
Debit: Tax Title Liens
Credit: Tax Overpayments

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32
Q

JE: Realizing Tax Revenues (Current Year) - By adjusting reserve

A

Debit: Reserve for Taxes Receivable
Credit: Amount to be Raised by Taxation

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33
Q

JE: Realizing Tax Revenues (Prior Year) - By adjusting reserve

A

Debit: Reserve for Prior Year Taxes Receivable
Credit: Receipts from Delinquent Taxes

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34
Q

JE: Realizing Tax Revenue (Tax Title Liens) - By adjusting reserve

A

Debit: Reserve for Tax Title Liens
Credit: Receipt from Delinquent Taxes

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35
Q

JE: Cancelling Tax Overpayments to Operations

A

Debit: Tax Overpayments
Credit: Operations

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36
Q

JE: Applying Prepaid Taxes

A

Debit: Prepaid Taxes
Credit: Taxes Receivable

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37
Q

JE: Lapsing Uncommitted Appropriation Reserves

A

Debit: Appropriation Reserves
Credit: Operations

38
Q

JE: Closing Revenue Accounts

A

Debit or Credit: Revenue Accounts

Debit or Credit: Operations

39
Q

JE: Closing Operations to Fund Balance

A

Debit: Operations
Credit: Fund Balance

40
Q

Definition of Fund

A

Independent fiscal accounting entity with a self-balancing set of accounts, segregated for the purpose of carrying out specific activities or attaining certain objectives

41
Q

RMA

A
  • Registered Municipal Accountant

- Conducts Annual Audit

42
Q

5 Most Common Funds

A
  • Current Fund
  • Trust Funds
  • Capital Funds
  • Utility Funds
  • Public Assistance
43
Q

5 Basic Accounts that Make Up General Ledger

A
  • Assets
  • Liabilities
  • Fund Balance
  • Revenues
  • Expenditures
44
Q

Accounting Equations

A

Assets = Liabilities + Fund Balance

45
Q

Balance Sheet Accounts

A

Assets, Liabilities, & Fund Balance

-Permanent Accounts

46
Q

Non-Balance Sheet Accounts

A

Revenues & Expenditures

-Temporary Accounts

47
Q

Cash Basis

A
  • Revenues are realized when received

- Expenses are realized when paid

48
Q

Accrual Basis

A
  • Revenues are realized when earned or levied regardless of collection
  • Expenses are recorded when incurred or liability becomes known
49
Q

New Jersey Basis of Accounting

A
  • OCBOA: Other Comprehensive Basis of Accounting
  • Modified Accrual
  • Revenues are realized when collected
  • Expenses are recorded when incurred
50
Q

Collateral Entries

A

Since we do not realize revenues until it is received, all receivable balances are offset with a reserve for receivables.
-Extra step when realizing revenues

51
Q

NJSA 40A:2

A

Bond Law

52
Q

NJSA 40A:4

A

Budget Law

53
Q

NJSA 40A:5

A

Fiscal Affairs Law

54
Q

NJSA 40A: 11

A

Local Public Contracts Law

55
Q

File Annual Debt Statement

A

Calendar Year: January 31

Fiscal Year: July 31

56
Q

File AFS

A

Calendar Year: February 10

Fiscal Year: August 10

57
Q

Introduce Budget

A

Calendar Year: February 10

Fiscal Year: August 10

58
Q

Adopt Budget

A

Calendar Year: March 20

Fiscal Year: Sept 20

59
Q

Responsible to Prepare & File AFS

A

CMFO/CCFO

60
Q

Responsible for Preparing Financial Statements presented in the Audit

A

CMFO/CCFO - Not Auditor

61
Q

Fine for Failure to file AFS on time

A

$5 each day

62
Q

Definition of Internal Control

A

Comprises the plan of an organization and all the coordinate methods and measures adopted within a business to safeguard its assets, check the accuracy and reliability of its accounting data, promote operational efficiency, and encourage adherence to managerial policies.

63
Q

Internal Control Examples

A
  • Segregation of Duties
  • Procedure Manuals
  • Competent Staff
  • Passwords for computers
  • Locking filing cabinets
  • Review ledgers regularly
64
Q

Appropriations Cap

A
  • 2.5%

- Can go up to 3.5% by passing COLA ordinance

65
Q

Tax Levy Cap

A
  • 2%

- Exceptions: Pension, Health Insurance, Debt, Capital and Emergencies (depends)

66
Q

Major Budget Revenues

A
  • Fund Balance
  • Misc Revenue Anticipated
  • Receipts from Delinquent Taxes
  • Amount to be Raised by Taxation
67
Q

Major Budget Appropriations

A
  • Operations
  • Contingent
  • Capital Improvements
  • Debt Service
  • Deferred Charges & Statutory Expenditures
  • RUT
68
Q

Line Budget

A

-Each Appropriation must be categorized between Salary & Wages and Other Expenses

69
Q

Reserve for Uncollected Taxes

A

-Amount of the tax levy we do not anticipate to be collected

70
Q

Temporary Budget

A
  • Provides the operations of the local unit in the new budget year until the budget has been adopted
  • Resolution must be passed within 30 days
  • Total Appropriations can not exceed 26.25% of prior years appropriations excluding Capital Improvement Fund, Debt Service, Public Assistance
71
Q

Budget Calendar

A
  • Introduction: C/Y Feb 10
  • File Introduced with DLGS: 3 days after intro
  • Budget Publication: Mar 10 (10 days prior to adoption)
  • Budget Hearing: Mar 20 (not less than 28 days after intro)
  • Budget Adoption: Mar 20
72
Q

Over Expenditure of Budget

A
  • No person shall expend any money where an appropriation has not been provided, in excess of the amount appropriated for said purpose
  • Violation of this section is a misdemeanor, and is subject to penalties under criminal law
73
Q

NJSA 40A:4-85

A
  • Chapter 159 Budget Amendment
  • Correction of Title, Text or Amount
  • Requires Resolution and Approval by Director of DLGS
74
Q

NJSA 40A: 4-87

A
  • Chapter 159 Budget Amendment
  • Insertion of Special Items of Revenues and Appropriations
  • Requires Resolution and Approval by Director of DLGS
75
Q

Emergency Appropriations

A

NJSA 40A: 4-46 through 4-55
-A local unit may make emergency appropriations after the adoption of the budget, for a purpose which is not foreseen at the time of adoption thereof, or for which adequate provision was not made herein.

76
Q

Reserve Year Budget

A
  • Second year of the budget to serve as catch up period for bills that were not paid during the initial year of budget
  • The goods had to have been received or services rendered in the year of that budget
77
Q

Budget Transfers

A
  • Current Year Appropriations: Last Two Months
  • Reserve Year Appropriations: First Three Months of new year
  • Must be approved by 2/3 vote of full membership
78
Q

Budget Transfer Restrictions

A

No Transfers permitted FROM:

  • Contingent
  • Deferred Charges
  • Cash Deficit
  • RUT
  • Down Payments
  • Capital Improvement Fund
  • Interest & Debt Redemption Charges
79
Q

Cancellation of Unexpended Balances

A
  • Any unexpended balance may, by resolution, be cancelled prior to the end of year.
  • Helps balance shortfall in revenue to minimize impact of overall operations and Fund Balance regeneration
80
Q

Lapse of Appropriation Balance

A
  • At end of year, all remaining unexpended balances will automatically lapse
  • Any commitments outstanding maybe set up as accounts payable before the funds lapse ensuring that funds are available for these obligations
81
Q

Tax Point

A
  • Cent or Penny on the tax rate

- One Ten Thousandths of the total amount of assessed valuations

82
Q

Calculate Tax Rate

A

Total Tax Levy / Assessed Value of all Properties X 100

83
Q

GUDPA

A
  • Governmental Unit Deposit Protection
  • Guarantees that Governmental Funds are secure in the event that the Bank goes bankrupt
  • 1st $250,000 covered by FDIC, remainder covered by GUDPA
84
Q

Cash Management Plan

A

CD

  • CMFO is charged with administering the plan
  • Includes: Designation of Depositories; Designation of Funds Covered; Authorized Investments; Policies for selecting and evaluating investments; guidelines under which CMFO can maximize return on public funds
85
Q

Securities purchased by municipalities

A
  • US Bonds
  • Government Money Markets
  • Bonds or other obligations by local unit or school district
  • Local government investment pools
  • CDs
  • Checking & Savings Account
86
Q

Cash Management Reporting Requirements

A
  • Monthly report provided to governing body and recorded in minutes
  • Report contains: Organizations where funds are invested; amount of securities purchased; class or type of investments purchased; Book value, earned income, fees incurred
87
Q

Petty Cash Fund

A

NJSA 40A: 5-21

  • Permits establishment of petty cash fund
  • Approved by resolution; include amount, purpose, custodian
  • Approved or denied by Director of DLGS
  • Change in custodian must be communicated by resolution and sent to Director of DLGS
  • Written policy should be established
  • Year End: Petty cash turned over to CFO and then re-established in the new year
88
Q

Books of Original Entry

A
  • Cash Receipts Journal
  • Cash Disbursement Journal
  • Payroll Journal
  • General Journal
  • Provide basic foundation for accounting system
  • Maintain double entry principle of bookkeeping
  • For every debit there is a credit
89
Q

General Ledger

A
  • Provides for orderly and systematic recording of financial transactions, usually in summary form as they have been recorded in the books of original entry
  • No entry made in general ledger unless first made in book of original entry
90
Q

Encumbrance

A

The obligation restricts further charges to an account unless the unencumbered balance is adequate for such future charges

91
Q

Current Fund Calculations

A

Worksheet
RUT
Tax Calculations

CMFO Exam (12 decks)

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