F8 Flashcards
What is the purpose for separate fund FS?
Should be presented for govt’l and proprietary funds to report additional & detailed info about the primary govt
What is the characteristic of service efforts and accomplishments is the most difficult to report for a govt entity?
Relevance
The measurement focus of governmental type funds is on the determination of
Current Financial Resources
Financial Position
Is income a determination for governmental fund measurement focus?
No.
Current Financial Resources
Financial Position
What is the orientation of accounting and reporting for all proprietary funds?
Income determination
The primary emphasis in accounting and reporting for governmental funds is on:
“flow of current financial resources” focus which measure sources, uses, and balances of current financial resources
When does modified accrual basis of accounting recognize revenue?
Available and measureable
When does full accrual basis of accounting recognize revenue?
In the accounting period in which they are earned
Compensated absence liability should be calculated based upon the pay and salary in effect at…
BS date
What are the governmental funds?
GRaSPP G: General R: Special Revenue S: Debt Service P: Capital Projects P: Permanent
What are the proprietary Funds?
SE
S: Internal Service
E: Enterprise
What are the Fiduciary Funds?
PAPI P: Pension Trust A: Agency P: Private Purpose I: Investment Trust
What are restricted fund balances?
Represent resources whose use has been limited by external sources such as creditors, contributors, other govts, laws, constitutional provisions or enabling legistration
What are non-spendable funds?
Represent resources in a form that cannot be spent (e.g. inventories and prepaid expenditures) or are legally or contractually required to remain whole (e.g permanent fund principle)
What are committed fund balances?
Represent resources that can only be used for specific purposes pursuant to constraints imposed by formal action of the govt’s highest level of decision making authority
What are assigned fund balances?
Are constrained by the govt’s intent to be used for a specific purpose, but are neither restricted or committed.
Unassigned Fund balance is the residual classification for what fund
General fund
If expenditures incurred for a specific purpose exceed the amount restricted, committed or assigned for those purpose, what may be necessary?
Report a negative unassigned fund balance
Debt Service Fund resources that are subject to the terms and conditions of a bond indenture would be classified w/n fund balance as:
Restricted
What are permanent funds used for?
To report resources that are legally restricted to the extent income, and not principal, may be used for purpose supporting the reporting govt’s programs for the benefit of the public
What is the paramount objective of financial reporting by state and local govt
Accountability
J/E for purchase order under modified accrual accounting?
DR: Encumbrance
CR: Budgetary Control
J/E for general fund salaries to the fire department
DR: Expenditures- Sal & Wages
CR: Sal Payable
How should budgetary comparisons be presented-basis of accounting?
In the same basis of accounting as the adopted budget
J/E for property tax being levied
DR: Prop Tax Receiv
CR: Allowance for uncollectible prop tax
CR: Revenue
J/E for when the encumbrance account is decreased
DR: Budgetary Control
CR: Encumbrance
J/E for when appropriations are recorded
DR: Fund Balance
CR: Appropriations
J/E when Budget is recorded
DR: Est Rev
CR: Appropriations
CR: Fund Balance
The expenditure element “sal and wages” is an example of which type of classification?
Object
- Most specific classification = chart of accounts
- Expenditures of govt’l resources should be classified by object classes, according to the type of items purchased or services rendered.
How should general fixed assets be accounted for in the general fund?
Expenditure
J/E
DR: Expenditure
CR: Vouchers Payable
J/E To record budget
DR: Est Rev
CR: Appropriations
CR: Budgetary Control
How are interfund transfers and proceeds of debt issue classified?
Estimated Other financing sources
J/E when supplies and invoice are received for governmental funds
DR: Budgetary Control (org amt)
CR: Encumbrances (org amt)
DR: Expenditures (actual amt)
CR: Vouchers Payable (actual amt)
How are encumbrances outstanding at year-end in a state’s general fund reported as?
Fund Balance Commitment in the general fund
What types of accounts is it inappropriate to record depreciation expense?
governmental funds
What is an exchange transaction for govt’l units?
Is a reciprocal transfer in which each party receives and sacrifices something of approx. equal value
What is a non-exchange transaction for govt’l units?
Involves giving/receiving value without receiving/giving equal value in return
J/E to record prop tax levy with uncollectibles
DR: Prop Tax Receive
CR: Est Uncollect
CR: Prop Tax Rev
What is the purchase method accounting for inventory under MAA?
Records additions to inventory as an expenditure and then establishes inventory bal and related non-spendable fund balance amts based on physical counts and valuations at year end.
Govt-Wide Statement of Net Position Equals
Assets and deferred outflows of resources minus liabilities and deferred inflows of resources = net position
J/E for assets associated with unavailable revenues
DR: AR
CR: Deferred inflow of resources
Govt’l funds presentation of financial position equation
Assets and deferred outflows of resources equals liabilities and deferred inflows of resources plus fund balance
How will a derivative qualify for a hedge accounting treatment?
If it is effective
How are changes in a government’s pension liability that result from changes in actuarial assumptions are accounted for?
Deferred outflows and deferred inflows
How are property taxes collected in advance of the year in which they are levied accounted for (governmental funds)
Deferred inflows of resources
Which govt’l fund would a special tax levy to retire and pay interest on general obligation bonds
Debt Service
How should capital assets donated to a governmental unit be recorded at
Estimated FV when received
How would proceeds from general obligation bond issue be reported as?
Other Financing sources
What is special revenue funds?
Account for the proceeds of specific revenue sources (other than permanent funds or for major capital projects) that are legally restricted or committed to re expenditures for specific purposes
What is the debt service fund account for?
Accounts for the accumulation of resources for, and the payment of, general long-term liability principal and interest.
What are permanent fund?
Are used to account for principal that is restricted and may not be expended (earnings may be used for purposes that benefit the public
What is a major exception to the general rule of expenditure accrual for govt’l funds under MAA
Is the treatment of interest and principal payments for long-term debt.
What is the term used to identify the equity section in proprietary funds?
“Net Position”
J/E in internal service fund for the billings for transportation services provided to other govt;l units
DR: Due from other funds
CR: Operating Revs
The estimated total current cost of Municipal Solid Waste Landfill Enterprise fund closure and post-closure care, should include
- Cost of a final cover to be applied to the landfill
2. cost of equipment to be installed to monitor methane gas buildup
Under PF, what is included in cash flows from capital and related financing activities
Proceeds from capital debt, capital contributions, purchases of capital assets, principal paid on capital debt, interest paid on capital debt
What is an enterprise fund used for?
To account for the provision of goods and services that are financed mainly by user charges.
What PF are required to present a statement of CF
ALL of them
How should shared revenues received by a PF be recorded?
Non-operating
J/E for PF Internal Service Fund billing for services to other funds
DR: Due from other Funds
CR: Operating Revenues Control
Does due from other funds affect an internal service fund’s change in net position?
No - Due from other funds appears on the BS. They are not a component of changes in net position
What is an enterprise fund?
It accounts for a government’s for-profit type operations, which provide goods or services to the general public.
What is an internal service fund?
Accounts for the providing of goods or services by one department to other departments on a cost-reimbursement basis. Municipal motor pools are a good example of internal service funds.
Are both Govt’l Funds and PF affected by interfund transfers
Yes. Govt’l Funds -these are recorded as other financing sources rather than revs(exp).
J/E for Taxes and fees collected by the agency fund
DR: Cash
CR: Due to other govt (taxes)
CR: Due to other funds (fees)
Private Purpose Fund
is the designated fund for reporting all other trust arrangements under which principal and income are for the benefit of one of the following
How are employer contribution additions to a governmental pension fund recorded?
As expenditures and expenses in the appropriate fund FS. The annual required contribution, not the benefits paid or the unfunded actuarial liability, is the amount of the expense.
Dual objectives of govt’l accounting ?
Objectivity and Accountability
Fund Structure
GF, PF, FF
What are sources of Governmental Resources?
Revenue
Other Financing Sources
Revenue:
Taxes - Income & Sales
Taxes - Property & Real estate
Fines & Penalties
Other Financing Sources:
Debt Proceeds (bonds & notes)
Interfund Transfers
Property Tax J/Es
~Property Tax levied
~Collection of Property Taxes
~Reclassify receiv to deliquent
~Reclassify current allowance for uncollectible
Property Taxes Levied:
DR: Real property taxs receivable (current)
CR: Revenues (property taxes)
CR: Allowance for uncollectible taxes receivable (current)
Collection of Property taxes:
DR: Cash
CR: Real property taxes receivable - current
J/E to reclassify receivables to delinquent:
DR: Property taxes receivable - deliquent
CR: Property Taxes Receivable - current
J/E to reclassify curr allowance for uncollectible
DR: Revenues – prop taxes
DR: Allowance for uncollect -current
CR: Allow for uncoll taxes - deliquient
J/E to book an encumbrance
J/E to reverse estimated encumbrance
J/E to record actual expenditure
J/E for outstanding POs
DR: Encumbrance
CR: Budgetary Control
DR: Budgetary Control
CR: Encumbrance
DR: Expenditures
CR: Vouchers Payable (or cash)
DR: Unassigned fund bal
CR: Fund fal commities
