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ACCT 4421 > Exam 1 > Flashcards

Exam 1 Flashcards

1
Q

government officials need to exercise a healthy does of __________

A

professional skepticism

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2
Q

what is professional skepticism

A

is an attitude that includes a questioning mind and a critical assessment

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3
Q

mission of the government

A

provide services for the betterment of society

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4
Q

what is the governing force of a government entity

A

budget

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5
Q

Nonprofits and charities may have to file an IRS Form _____

A

990

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6
Q

What is the board that dictates Generally Accepted Accounting Principles for businesses and nonprofits?

A

Financial Accounting Standard Board (FASB)

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7
Q

What is the board that dictates GAAP for state and local governments?

A

Governmental Accounting Standards Board (GASB)

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8
Q

What is the board that dictates GAAP for federal government?

A

Federal Accounting Standards Advisory Board (FASAB)

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9
Q

Sarbanes-Oxley made it to where FASB and GASB are funded by ______________________

A

independent sources

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10
Q

What was the latest GASB was number _______

A

103

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11
Q

What is GASB 103?

A

Improvements to financial reporting model

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12
Q

What does the Chief Financials Officers Act of 1990 do?

A

improve the financial management and accountability of the United States government

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13
Q

Governmental activities are funded primarily by ________ & ___________

A

Primary taxes and grants

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14
Q

Business activities are funded by _____________ / _______________

A

user feeds/ revenues

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15
Q

Governmental activities focus: ___________________________

A

available current financial resources

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16
Q

Business activities focus:
___________________________

A

all economic resources

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17
Q

Governmental activities accounting method: _________________________

A

Modified accrual basis of accounting

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18
Q

Business activities accounting method: _______________________

A

accrual (activity and cash don’t happen at the same time)

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19
Q

Governmental activities type of funds: ________________________

A

governmental funds

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20
Q

Business activities type of funds: _______________________________

A

proprietary funds

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21
Q

How many governmental funds are there?

A

5

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22
Q

What are the 5 governmental funds

A
  1. general fund
  2. special revenue
  3. debt service
  4. capital projects
  5. permanent
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23
Q

How many propriety funds are there?

A

2

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24
Q

What are the 2 propriety funds?

A
  1. enterprise
  2. internal service
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25
Q

What is an enterprise fund?

A

Provides business services to external customers (ex: water company)

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26
Q

What is an internal service fund?

A

Provide business services to internal customers (ex: state of LA has vehicles so of auditor needs to go on trip they rent vehicle and the department pays)

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27
Q

Which fund is the most significant of all the governmental funds?

A

General fund

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28
Q

What are some characteristics of a general fund

A

largest number of transactions; everything not legally or contractually set aside for a specific purpose

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29
Q

Every government must have one and only one of which governmental fund?

A

General fund

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30
Q

What is a special revenue fund?

A

The tax or the source is “special” and comes with constraints

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31
Q

What are two ways that constraints could be placed on a special revenue fund

A
  1. Government that grants it
  2. or restricted by voters
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32
Q

Does debt appear in the debt service fund? Yes or No

A

No

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33
Q

What does a debt service fund do?

A

Accumulate resources to repay long term debt; sets aside money to pay debt when debt comes due

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34
Q

What fund has money that officials agree they HAVE to put aside?

A

Debt service fund

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35
Q

What two funds are often times related?

A

Capital projects fund and debt service fund

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36
Q

What is a capital projects fund?

A

Account for resources committed/ restricted to a capital project

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37
Q

Do capital projects/ assets appear in the capital projects fund? Yes or No

A

No

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38
Q

What in a permanent fund can be spent?

A

the interest made from the fund but not the principal

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39
Q

The principal can NEVER be spent in which fund

A

the permanent fund

40
Q

The permanent fund must do what?

A

Must benefit the government or its citizens

41
Q

(formula ) Fund balance =

A

assets (+ deferred outflows) - liabilities (+ deferred inflows)

42
Q

What are the five categories of fund balances

A
  1. non-spendable
  2. restricted
  3. committed
  4. assigned
  5. unassigned
43
Q

What is a non-spendable fund balance

A

only can spend the interest/ earnings

44
Q

What is a restricted fund balance

A

constrained by a 3rd party

45
Q

What is a committed fund balance

A

constrained internally by highest authority or elected body

46
Q

What is an assigned fund balance

A

expressed explicit intent, lower authority

47
Q

What is an unassigned fund balance

A

general government services

48
Q

What are a required sections of the Annual Comprehensive Financial Report

A

MD&A and statistical section

49
Q

what kind of funds are in fund financial statements

A

governmental and proprietary

50
Q

information about the fund balance sheet

A

lists funds individually; major funds individual; non-major funds combine

51
Q

what accrual do governmental funds use in the fund balance sheet

A

modified accrual

52
Q

what accrual do proprietary funds use in the fund balance sheet

A

full accrual

53
Q

Governmental wide statement of net post categorizes as either: _________________ or ______________

A

governmental activities or business type activities

54
Q

What basis do statement of net post use

A

full access basis

55
Q

How many funds are there for non profits?

A

2

56
Q

What are the 2 types of non profit funds

A

restricted/ nonrestricted

57
Q

What does the governmental wide financial statement do?

A

Provide a full view of the financial situation of a governmental entity

58
Q

What are some example of who may want to use a governmental wide financial statement?

A

lenders, bondholders, and bankers

59
Q

Can a government have multiple capital project and debt service funds? Yes or no and why

A

Yes if they have multiple capital projects and debt issuances

60
Q

Not-for-profit entities typically use which type of accounting?

A

Fund accounting

61
Q

What do not-for profit entities typically fall under: FASB or GASB?

A

FASB

62
Q

Are not-for-profits required to use fund accounting?

A

No

63
Q

Do not-for-profit entities have to distinguish between restricted and unrestricted resources?

A

Yes

64
Q

What type of balance does a general fund have?

A

Unassigned balance

65
Q

What is the only fund with an unassigned balance?

A

general fund

66
Q

what is a government bond?

A

a bond issued by government and backed by full faith and credit of issuing government

67
Q

what is a revenue bond?

A

a bond only backed by the revenues it is financing

68
Q

which bond (revenue or government) has interest rates that are a little higher and riskier?

A

revenue

69
Q

What is this an example of: developer come to baton rouge and says they are going to put in a mall but need a road widened so the government will out taxes for this

A

tax increment financing

70
Q

What type of funds have a statement of cash flows?

A

proprietary funds

71
Q

What type of funds don’t have statement of cash flows

A

governmental funds

72
Q

fund balance + estimated revenues=

A

available resources for the year

73
Q

Available resourced for the year should ______________________

A

meet or exceed expenses

74
Q

who executes the budget

A

organization’s executive branch

75
Q

Governments integrate their _______________ into their accounting systems

A

budgets

76
Q

On what basis are budgets prepared

A

GASB has no control over the budget

77
Q

what basis does GASB recommend that the budget is prepared on

A

modified accrual basis

78
Q

governments and some not-for-profits record _____________ to help prevent overspending the budget

A

encumbrances

79
Q

the entry to record an encumbrance is usually prepared when a purchase order is .. (3 answers)

A

issued, contract signed or commitment made

80
Q

How are encumbrances recorded

A

with a journal entry

81
Q

What do encumbrances do

A

put a restraint on a fund balance

82
Q

a pension is what kind of a fund?

A

fiduciary

83
Q

what is a fiduciary fund?

A

a fund of trust (holding on behalf of someone else)

84
Q

Do fiduciary funds show up on the face of the financial statement?

A

No

85
Q

Why do fiduciary funds not show up on the face of the financial statement?

A

it is not the state’s money (instead disclosed in the footnotes)

86
Q

what are the two types of retirement plans?

A

1.defined contribution
2. defined benefit

87
Q

what is a defined contribution?

A

benefit in future is not defined

88
Q

what is a defined benefit?

A

know exactly what the monetary benefit will be

89
Q

defined contribution is usually called what:

A

a 401K

90
Q

What is GASB Stmt 68

A

participant from a multi employer plan must report their prorita pension obligation on their financial statements

91
Q

What are some key uncertainties that come with a pension

A

employee life expectancies; employee turnover rates; future wages & salaries rates; the investment

92
Q

Do pension plans get get audited?

A

Yes

93
Q

What are the four types of fiduciary funds

A
  1. pension and other employee benefit trust funds
  2. investment
  3. private purpose trust
  4. custodial
94
Q

What does OPEB stand for

A

other employee benefits

95
Q

examples of OPEB

A

health insurance, paid time off, life insurance

ACCT 4421 (8 decks)

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