F10 Flashcards
What is the most significant characteristic defining an enterprise fund?
Pricing policies of the activity establish fees and charges designed to recover its cost
Tip: Fees and charges - NOT taxes
Self sustained by fees and charges
Gain vs special item on proprietary fund financials
Must be material to be considered a special item. A gain of 1000 is not considered a special item. A gain of 1,000,000 on the sale of land would be
JE to establish enterprise fund from general fund cash
Cash
Interfund Transfers In
If capital assets are donated
Capital Assets
Contributions
What type of fund is the lottery?
Enterprise fund
What fund(s) should a public university use for their accounting?
Can choose between using the proprietary fund model (FA, Depr, LTD) or the governmental fund model (no FA, no depr, no LTD)
What financial statements do proprietary funds require?
BS / IS
But NO statement of cash flows
What financial statements do agency trust funds require?
Only the balance sheet
NO IS
NO statement of cash flow
When agency funds collect fees, do they recognize revenue?
No, the fees are passed onto the general fund
Examples of clearance funds
Alimony, child support, food stamps
No monitoring
JE to record Receivable due to capital projects fund from private purpose fund
Due from private purpose trust
Interfund transfer from the private purpose trust
Cash
Due from private purpose trust
True or false, each investment pool must be reported separately for the investment funds
True
Plan assets for investment funds and pension funds are reported at what measurement basis?
Fair value
What fund reports a fiduciary net position as a single line item?
Pension trust funds
Are fiduciary funds reported on the government wide financial statement?
No
Fiduciary funds use special terms for revenues and expenses - what are they?
Additions and deductions
Which fund reports no income statement?
Agency fund
Which funds report a statement of cash flows?
SE only
Pension fund receives cash of employer contributions JE
Cash
Additions: Employer Contributions - Restricted
What are inflows to the pension fund called?
Additions
What are outflows to a pension fund called?
Expenditures
Where are pension fund liabilities displayed?
Government wide financials (or the specific fund, but not the pension fund!)
Remember: deferred outflows and inflows
Is a reduction in pension liability a deferred inflow or a deferred outflow?
Deferred inflow (benefit)
An agency fund (such as a tax collection fund) - how do they record collection of fees?
Liability - due to other funds
Will go to the general fund
Escheat property
Abandoned property that reverts to gov - held in the private purpose trust
How are the assets of an investment trust fund treated different for the city-owned fund vs funds from other governments?
City-owned funds: would display in the general fund as assets of investing fund
Funds from other governments - would
be kept in the investment trust fund
Deferred compensation plans go to which fund?
Pension fund (and other EE benefits)
What two types of accountability does government reporting focus on?
Operational accountability and fiscal accountability
Operational accountability
Answers are we efficiently and effectively meeting our objectives?
Gov wild financials answer this
Fiscal Accountability
In compliance with public decisions concerning raising and spending of public funds in the short term?
What categories does the government wide financial statement cash flow have?
There is no statement of cash flows for government wide financials
What required supplementary information is there for gov wide financials?
Pension, Budget, and Infrastructure info
What is CAFR?
Comprehensive Annual Financial Report
Non GAAP
Sections of CAFR
Intro (unaudited)
Basic financial and required supplementary info (audited)
Statistic section (unaudited)
SELF test
Test determines if you are a primary government item
Separately elected governing body?
Legally separate
Fiscally independent?
Examples of special purpose local governments
Hospital, school district
Examples of component units in gov reporting
Board of Ed and Rescue Squad
Blended presentation for component unit requirements
Board is substantively the same as primary gov
- OR -
Unit serves primary gov exclusively
Basic financial statements for general purpose gov units
Gov wide financials, fund financial statements; and notes to financials
Integrated Approach
Operational and fiscal accountability is shown individually and show relationship there-in between via a reconciliation
A statement of activities of the gov wide financials is designed primarily to provide info to assess what?
Operational accountability
Is MD+A required supplementary info or part of the basic financial statements for general purpose gov units?
Required supplementary info
Financial statement names for gov wide financials
Statement of net position
Statement of activities
Component unit - blended or discrete if not a separate legal entity?
Blended. Must be a separate legal entity to be discrete (but still fail the SELF test)
What activities should be excluded from gov wide financial statements?
Fiduciary Activities - b/c these funds hold money for others
What is included in the introductory section of the CAFR?
Letter of Transmittal
Org Chart
List of Officers
What order does the MD+A get placed in the gov wide financial statements?
First
Impairment
Reduction in asset life / reduced utility / or physical damage
Prior year taxes collected between 60 and 90 days into current year - this year’s revenue or last year’s?
Not Measurable and available - so this year’s taxes
SOC gov accounting
SOC away the revenue
Service charges
Operating grants and contributions
Capital grants and contributions
Grants are restricted cash
Defered inflows are coupled with
Liabilities
Deferred outflows are coupled with
Assets
Compensated absences for gov liability should be calculated with the salary at what date?
Balance sheet date
Acquisition through forfeiture of a capital asset, what measurement basis should the gov record?
Lower of cost or market
Unlike donated assets, which are recorded at fair value
Equipment, facilities, and services previously included in the estimated current cost of closure of a landfill and lost closure care are now purchased. What is the JE?
Liability
Cash
Modified approach to capitalizing gov infrastructure
Expense all but capitalize additions.
No depreciation
Enterprise fund interest income statement of cash flows section
Investing
NOT operating like in commercial
Major fund status = what?
General fund OR
( 10% rule AND 5% rule )
revenues / expenditures
assets / liabilities
NOT fund balance / net position
Where does the cash inflow from issuing bonds to finance city hall construction go on the gov statement of cash flows?
It doesn’t because it would be a part of the capital projects fund which does NOT have a statement of cash flows
Where do cash receipts from grants / subsidies for operating purposes go on the cash flows for governmental not-for-profits?
Noncapital financing
Where does cash paid to other funds (other than interfund services) go on the gov statement of cash flows?
Noncapital financing
Cash payment in lieu of taxes from enterprise fund to general fund, what category on gov statement of cash flows?
Operating
This is cash payment for interfund services
Are principal payments expenses in full Accrual?
No - they reduce liability
Are principle payments expenses in modified Accrual?
Absolutely - there is no liability to reduce so they must be expenses
