F8_governmental accounting

Question 1

the purpose of fund accounting

Answer 1

fund accounting enables service and mission-drive organizations to easily monitor and report compliance with:

1. spending purpses (fund restrictions)
2. spending limits (budget)

and other fiscal accountability objectives.

Question 2

separate fund financial statements for governmental and proprietary funds

Answer 2

is to report additional and detailed information about the primary government.

Question 3

1. governmental funds

Answer 3

• modified accrual accounting
• current financial resources measurement focus

(GRaSPP)
General fund
Special Revenue Fund
and 
Debt Service Fund
Capital Project Funds
Permanent Funds

Requirements _ 1. balance sheet - Financial position 2. cash flow - current financial resources

Question 4

2. Propritary Fund

Answer 4

• full accrual accounting
• economic resources measurement focus

(SE)
Internal service funds
Enterprise funds

Question 5

3. Fiduciary Funds

Answer 5

• full accrual accounting
• economic resource measurement focus

(PAPI)
Pension funds
Agency funds
Private funds
Investment trust funds

Question 6

which of the following characteristics of service effort and accomplishments is the most difficult to report for a governmental entity?

Answer 6

relevance - meaning the information must bear a logical relationship with the needs for its purpose. It must also be reliable. it is the most difficult characteristic to achieve.

Question 7

the dual objectives of governmental and not-for-profit reporting

Answer 7

1. operational accountability

2. fiscal accountability

Question 8

classification of governmental fund balances (GRaSPP)

Answer 8

1. non-spendable fund balance
2. restricted fund balance - external: legislation, grantor, or creditor requirements must be satisfied.
3. committed fund balance - Internal - highest governing authority establishes limits.
4. Assigned: Internal - Intention without formal commitment
5. Unassigned: no constraint as to use

Question 9

bond premium and discount on governmental funds

Answer 9

bonds premium and discount is not amortized in its governmental funds, including the debt service fund. the bond premium and discount is usually recorded in the fund receiving the proceeds. if the premium is to be used for debt service, as is often the case, the premium is accounted for in the debt service fund.

Question 10

governmental find - statement of revenues, expenditures, and change in fund balance - other financing sources

Answer 10

other financing sources = transfer between funds and bond proceeds

Question 11

fixed asserts valuation, donated

Answer 11

at estimated fair value when received

Question 12

Derived (non-exchange) tax revenues

Answer 12

it represent taxes imposed on or derived from exchange transactions such as commercial sales (Sales taxes).

Question 13

Imposed non-exchange revenues

Answer 13

include property taxes and fines

Question 14

revenue and other financing sources

Answer 14

revenue - property taxes, licenses, and fines, intergovernmental revenues

financing sources - proceeds of debt issue, interfund transfers for debt service

Question 15

outstanding encumbrance

Answer 15

the encumbrances outstanding at year-end are the order that have not received yet.

Question 16

what is the major difference between an exchange transaction and a non-exchange transaction for governmental units?

Answer 16

the relationship between the amount of value given and received.

an exchange transaction is a reciprocal transfer in which each party receives and sacrifices something of approximately equal value.

a non exchange transaction involves giving/receving value without receiving / giving equal in return.

Question 17

what is internal service fund?

Answer 17

internal service funds are established to finance and account for services and supplies provided exclusively to other departments within a government unit.

• balance sheet “statement of net position”
• income statement “statement of revenues and expenses”
• statement of cash flows
• footnotes

Question 18

internal service fund - “statement of new position”

Answer 18

Assets (current and noncurrent)

Liabilities (current and noncurrent)

Net Position (RUN)
Restricted
Unrestricted
Net Investment

Question 19

what is enterprise fund?

Answer 19

enterprise funds are used to account for operations that are financed and operated in a manner to private business enterprise.(public utilities, public hospitals, lottery!!!!)