F8 Flashcards
What does fund accounting enable?
Service and mission-driven organizations to monitor compliance with spending purposes (legal restrictions), spending limits (budget and financial control), and other fiscal accountability objectives
What is the only find that should have a positive unassigned fund balance?
General fund
Why are separate fund financial statements presented for governmental and proprietary funds?
To report additional detailed information about primary government
What qualitative characteristic is most difficult for government entities to report?
Relevance
What are the two determinants of measurement focus of governmental type funds?
Current financial resources; financial position
What is the fund structure for governmental funds?
GRaSPP: General fund Special Revenue fund Debt Service fund Capital Projects fund Permanent fund
What is the fund structure for Proprietary funds?
SE:
Internal Service Fund
Enterprise fund
What is the fund structure for Fiduciary funds?
PAPI: Pension (and other employee benefit) trust fund Agency trust fund Private purpose trust fund Investment trust fund
What is the measurement focus for governmental proprietary and fiduciary funds?
Current financial resources; economic resources; economic resources
How are fund resources segregated?
For the purpose of carrying on specific activities or attaining certain objectives
What is accounting and reporting for fiduciary and proprietary funds similar to?
Accounting and reporting for business enterprises
What type of accounting do governmental, proprietary, and fiduciary funds use?
Modified accrual; accrual; accrual
What are the restrictions on governmental fund balances?
NU CAR: Non-spendable Restricted Committed Assigned Unassigned
Expenditures incurred for specific purposes exceed amounts restricted, committed, or assigned to these purposes, how do we report?
Negative unassigned fund balance
How are permanent funds used?
Used to report resources that are legally restricted to the extent income, and not principal, maybe used for purposes supporting the reporting governments programs
What is the measurement focus and basis of accounting for governmental fund financial statements and government-wide financial statements
Current financial resources, modified accrual; economic resources, accrual
What do imposed nonexchange revenues consist of?
Real estate taxes and fines and penalties
Under modified accrual accounting, when is revenue recognized?
When measurable and available
Under modified accrual accounting, what is the journal entry for issuance of commitment to purchase?
Debit: encumbrance
credit: budgetary control
Under modified accrual accounting, what is the journal entry for an expenditure?
Debit: expenditure
credit: vouchers payable or cash
What is adopting a balanced budget supportive of?
Interperiod equity as a financial reporting objective of a governmental unit
How are budgetary comparisons presented?
Same basis of accounting as adopted budget
What is the journal entry for recording taxes?
Debit: taxes receivable
credit: allowance from collectible taxes
credit: revenues
What is the journal entry to record the revenue budget?
Debit: estimated revenue control
credit: budgetary control
What are the classifications of governmental expenditures?
Function/program, organizational unit, activity, character, object classes
Differentiate between the alternatives for expense recognition
Purchase method: expenditure current assets when purchased, reverse for items not used during the current period; consumption method: set up as current assets when purchased, expenditure items as consumed
What is the journal entry to record budget with appropriations an estimated revenues?
Debit: estimated revenues
credit: appropriations
credit: budgetary control
How are interfund transfers and death proceeds classified?
Other financing sources
What is the journal entry for when encumbrances are received?
Debit: budgetary control
credit: encumbrance
debit: expenditures (actual)
credit: vouchers payable
What goes into the governmental funds for expenditures (revenue)?
Amount paid (collected) and current liabilities (assets)
How is Fund Balance calculated?
Total assets - total liabilities
How is the unassigned portion of fund balance calculated?
Total fun balance minus assigned (budgetary control) fund balance
What is the equation for available appropriations?
Budget: appropriations - activity: expenditures - encumbrances = available appropriations
Why is depreciation not recorded in governmental funds?
Focus is on the flow of financial resources and appreciation does not reflect use of financial resources
What is a non-exchange transaction?
Giving/receiving value without receiving/giving equal value in return
How are transfers from other funds classified?
Other financing sources
How do you fiduciary funds present their statement of financial position?
Net position format: (assets + different outflows) - (liabilities + different inflows)
What is the journal entry for assets associated with unavailable revenues?
Debit: accounts receivable
credit: deferred inflows of resources
How do governmental funds present their statement of financial position?
(assets + different outflows) - (liabilities + different inflows) + fund balance
What do debt service funds account for?
Accumulation of resources for, and payment of, general long-term debt principal and interest
How are assets donated to a governmental unit recorded?
At estimated fair value when received
Where is special assessment debt maturing in five years to be repaid from general resources of the government reported?
Government wide statement on net position
How do you governmental funds report interfund transfers?
Other financing sources
What are permanent funds used to account for?
Principal that is restricted and may not be expanded and earnings that may be used for purposes that benefit the public
Under the modified accrual basis, how are principal and interest on long-term debt recorded?
When they become due and payable, not when they accrue
How is debt to be repaid from general resources recorded?
General long-term liability and governmental activities column of government-wide statement of net position
How is property retained by the government treated?
Capitalized at the lower of cost or market value
When our interest expenditures recorded?
When legally payable per the bond agreement
What type of expenditures are underwriter fees and debt issue costs?
Debt service expenditures
What is the exception to the modified accrual basis of accounting for and how is it recorded?
Interest and principal and long-term debt a recorded when they become due and payable, not when they accrue
Where are transfers in/out placed
Other financing uses/sources
What are enterprise funds used to account for?
Provision of goods and services to the general public financed mainly by user charges
How are shared revenues received by a proprietary fund recorded?
Non-operating revenue
What is the journal entry for an internal service find billing?
Debit: due from other funds
credit: operating revenues control
How do enterprise funds treat their own fixed assets?
Record and depreciate consistent with economic resources measurement focus and accrual accounting
With government operations who’s costs are primarily supported by outside user charges, how do we classify these?
Enterprise funds
How are internal designations in the enterprise fund classified?
Unrestricted
What does the internal service fund account for?
Providing of goods/services by one department to other departments on a cost reimbursement basis
How are capital and non-capital financing activities reported on the statement of cash flow?
Separately
How are debt service transactions of a special assessment issue with the government is not obligated in any manner reported?
Agency fund
Which funds are used to account for assets held by governmental unit acting as an agent for another governmental unit?
Agency funds
Which fund accounts for unrestricted grants?
General fund
Which financials are required for an investment trust fund?
Statement of fiduciary net position and statement of changes in fiduciary net position
What is the basis for defining the financial reporting entity?
Accountability perspective
What do fiduciary and proprietary funds do with their debt?
Carry it
How are governmental capital leases treated?
As purchase of fixed assets with related debt
What is the journal entry for closing budgetary revenue accounts?
Debit: appropriations control
credit: revenues control
When a purchase order is approved, what happens to the budgetary control account?
Increases
What do government pension plans disclose in their financial statements?
Employer/employee obligations to contribute to the plan, statement about plan, and employee eligibility requirements
What funds are statements of cash flows issued for?
Proprietary, not governmental or fiduciary
When our revenues recognized under the modified accrual basis of accounting?
When measurable and available
What is the journal entry to formally integrate a revenue budget?
Debit: estimated revenue
Credit: appropriations control
Credit: estimated transfer to debt service fund
Credit: budgetary control
What is the journal entry to record a budgeted expenditure?
Debit: expenditures control
Credit: vouchers payable
What fund accounts for the restricted principal and interest payments?
Debt service fund
What are the two requirements to be accounted for as an enterprise fund?
User charges cover the costs of general public services and net income information is provided for an activity
What is the only amount included in a general funds encumbrance account?
Outstanding purchase order amounts
Under modified accrual accounting, when does interest accrue?
Only when legally due
How was that used to finance capital projects recorded?
Other financing sources
Where is work-in-progress reported in governmental financials?
Only government wide financial statements because all other capital project funds are closed out at year-end
What year are grant revenues recognized?
In the year in which the monies are used
How are outstanding encumbrances at year and reported?
Component of committed or assigned fund balance
What is the journal entry for payments of principal and interest on operating funds?
Debit: expenditure control
Credit: cash
How long must governmental financial statements display data as required supplementary information?
Minimum of 10 years or however long the governmental unit has been in existence
How is a bond anticipation note classified?
Current liability if entity does not have the ability to refinance as a non-current application
