E-FAR-Governmental Flashcards
The GASB Concepts Statements indicate that service efforts and accomplishments reporting
is necessary but not required.
GASB Concepts Statements indicate that the objective of SEA (service efforts and accomplishments reporting )reporting is to
provide more complete information about a governmental entity’s performance than can be provided in traditional financial statements and schedules.
Governmental fund revenues and expenditures should be recognized on:
the modified accrual basis.
Governmental funds include:
1 the general fund, 2 special revenue funds, 3 capital projects funds, 4 debt service funds, and 5permanent funds.
Funds recognized on the accrual basis:
1 Proprietary funds
2 Fiduciary fund
3 Pension trust funds
Proprietary fund revenues and expenses should be recognized on the accrual basis. Proprietary funds include
1 enterprise funds and
2 internal service funds
Fiduciary fund additions and deductions should be recognized on
the accrual basis.
Pension trust funds should be accounted for on
the accrual basis.
The governmental fund primary measurement focus is on
determination of current financial position (sources, uses, and balances of financial resources), rather than upon income determination.
Assuming that encumbrance accounting is utilized by the city, the journal entry to record the issuance of purchase orders and contracts is
Dr Encumbrances Control
Cr Budgetary Fund Balance—Reserved for Encumbrances (for the amount of the purchase order or estimated cost of the contracts.)
In the government-wide financial statement, the statement of net position, deferred outflows of resources are presented
In a separate section following assets.
A sale of future revenue should be recorded as
deferred inflow of resources and recognized over the life of the agreement.
statistical section of the Comprehensive Annual Financial Report (CAFR) of a governmental unit is
not part of the basic financial statements. GASB 34 (as amended) indicates that the basic financial statements include only the government-wide statements, the fund statements, and the notes to the financial statements.
GASB 68. What is the amount of liability that should be presented on the state government’s statement of net position related to the plan?
The portion of the actuarial present value of projected benefit payments attributable to past periods of employee service minus the pension plan’s fiduciary net position.
Required Supplementary Information for the financial statements of a defined-benefit pension plan under GASB 67:
A ten-year schedule of changes in pension liability.
B. A ten-year schedule of the amounts of total pension liability, fiduciary net position, net pension liability, the covered-employee payroll, and selected ratios.
C. A ten-year schedule of the actuarial computed required contribution, the required contribution, the actual contribution to the plan, and selected ratios.
GASB 33 defines nonexchange transactions as transactions
“in which a government gives (or receives) value without directly receiving (or giving) equal value in exchange.”
Exchange transactions are transactions
“in which each party receives and gives up essentially equal values.”
In accordance with GASB 33, Accounting and Reporting for Nonexchange Transactions, imposed nonexchange transactions are
revenues that result from taxes and other assessments imposed by governments that are NOT derived from underlying transactions. Examples include property taxes, special assessments, and fines and forfeits.
Derived tax revenues result from taxes assessed by government on exchange transactions such as
Income taxes, sales taxes, and motor fuel taxes are examples of derived tax revenues
According to GASB 52, land and other real estate held by an endowment as an investment should be reported at
fair value at each reporting date.
A deferred inflow is one of the five elements of the statement of financial position and can only be recognized when
identified by the GASB in authoritative pronouncements
GASB Concepts Statements are not GAAP T/F
True
GASB Concepts Statement No. 1 lists the following four financial reporting implications associated with the legally adopted annual budget:
(1) expression of public policy, (2) expression of financial intent, (3) form of control, and (4) it may provide a basis for evaluating performance (if the government established service efforts and accomplishment goals as part of its budget process).
GASB Concept Statement No. 1 defines two paramount objectives for financial reporting in government
: (1) Accountability and (2) interperiod equity.
Concept Statement No. 1 describes six characteristics of effective financial reporting:
(1) understandability,
(2) reliability,
(3) relevance,
(4) timeliness,
(5) consistency, and
(6) comparability (TRUCCR).
GASB Concepts Statement No. 4 identifies the following five elements of the Statement of Financial Position:
(1) assets,
(2) liabilities,
(3) deferred inflows of resources,
(4) deferred outflows of resources, and
(5) net position.
Taxes specifically designated to pay off general obligation long-term debt are accounted for in
the Debt Service Fund
Funds are used to
provide management accountability and control
An enterprise fund is used ……
Enterprise funds are also referred to as “business type” funds and use full accrual accounting.
when services are provided primarily to the public for a charge.Since enterprise funds use accrual accounting, it will provide the determination of net income and other control and accountability that management desires.
A fund is both a fiscal and an accounting entity.
A fund is “fiscal” because it has assets, liabilities, revenue, expenditure or expense, and fund balance or other equity accounts. A fund is “accounting” because it has its own ledgers and contains a self-balancing set of accounts. A fund is not a separate legal entity.
Fiduciary funds include the following 4 types of funds:
Recall the acronym “PIPPA” for fiduciary funds.
Pension trust funds,
Investment trust funds,
Private- P urpose trust funds, and A gency funds.
The focus of modified accrual basis accounting is on
the flow of financial resources
Governmental entities record property tax revenue when
the bills are sent out
At the beginning of the fiscal year, outstanding encumbrances from the prior year are recognized by
debiting Encumbrances of Prior Year.
When previously encumbered goods are received, normally the Budgetary Fund Balance account is
debited
The unexpended portion of bonds for capital improvements is excluded from
the net investment in capital assets.
A positive unassigned fund balance can appear only in
the General Fund
The Schedule of Direct and Overlapping Debt is presented in
the Statistical Section
Government-wide statements distinguish “governmental activities” from “business-type activities,” but do not identify funds T/F
True
An “other entity” is a component unit if it is
fiscally dependent on the primary government, its board is appointed by the primary government, and either the primary government can impose its will on the entity, or significant financial burdens or benefits can be shifted from one entity to the other, or the primary government’s financial statements would be misleading without the inclusion of the other entity
If the component unit is, in substance, a part of the primary government, then the balances for its funds
should be included with similar funds in the primary government
Permanent Funds account for
the principal and earnings of endowments that must be used for the benefit of governmental programs
Restricted assets are separately reported on
an Enterprise Fund statement of net position
Both employee and employer contributions to the pension plan are reported as
Additions in the Pension Trust Fund
An Investment Trust Fund must be used whenever
external entities contribute to a governmental entity’s Investment Pool
Okanoge County is responsible for collecting property taxes for the taxing jurisdictions within its boundaries and uses an Agency Fund to record transactions related to this process. When the taxes are levied,
the County records a receivable and an offsetting liability in the Tax Agency Fund
Residual Equity Transfers are
non-recurring, relatively infrequent, transfers of monies between funds
Quasi-External (Interfund Sales and Purchase) Transactions give rise to a
revenue entry in the fund supplying the services and an expenditure or expense in the fund using the services
Regular, routine, or recurring transfers of resources between funds to subsidize current activities are classified as
Operating Transfers
Governmental funds incur liabilities that don’t require the use of current resources and therefore
are not reported in the Fund-based statements until the period in which they are expected to be paid
All eligibility requirements or government mandated and voluntary nonexchange transactions must have been met before
both assets and revenue can be recognized
If revenue cannot be recognized under modified accrual basis as well as under GASB #33, then
the transaction is recognized as deferred inflow or unearned revenues depending on the circumstances
Government-mandated nonexchange transactions are
intergovernmental transfers of resources including entitlements, shared revenues, and payments in lieu of taxes
Derived tax revenues
are taxes resulting from the taxable exchange transactions of individuals and businesses
Quoted prices for similar assets or liabilities in an active market is an example of a level
2 input in determining fair value
