F6 - M5 - Governmental Accounting Overview

Question 1

For governments, what is a fund?

Answer 1

Fund are money that are set aside for a specific purpose, and they have their own fiscal and accounting entity. Think of the different bills for cities and villages, like water, sewer, electricity, etc.

They will have their own financials.

Question 2

What are the three main type of funds for governmental accounting?

Answer 2

Governmental funds

Proprietary funds

Fiduciary funds

Question 3

What is the acronym for the financial reporting characteristics for governments?

Answer 3

U R MICE

U - Understandability

R - Reliability

M - Make a difference

I - In timeliness

C - Consistent year over year

E - Entity to entity comparability

Question 4

What is are enterprise funds?

Answer 4

These are funds that a government sets up, who’s customers are mainly external. User charges for example.

These include Water, Sewer, Airports, and transit systems.

Question 5

What is a fiduciary (trust) fund?

Answer 5

These are assets controlled by the government, on behalf of beneficiaries who own a trust.

Uses accrual includes, custodial funds, investment trust fund, purpose trust fund, pensions or trust funds.

Question 6

What are governmental funds?

Answer 6

These are funds that use modified accrual basis of accounting and only report current financial resources. No long term debt or liabilities. This includes assets, all have to be current.

These include general funds, special revenue fund, debt service fund, capital project fund. permanent fund (like endowment),

Question 7

What are proprietary funds?

Answer 7

These are for business type activities, and they use the full accrual basis of accounting.

These include, internal service funds,