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FAR > F8pt1-3 Govt' Acct > Flashcards

F8pt1-3 Govt' Acct Flashcards

1
Q

Budgetary Accounting

A
  • A balanced budget supports Inter-period Equity

- As an objective of Public Administration & Fiscal Accountability

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2
Q

Derived Tax Revenues

A
  • Non-Exchange
  • Taxpayer income (inc.taxes)
  • Measurable & Available
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3
Q

Imposed Non-Exchange Revenues

A

-Wealth/ Property Taxes

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4
Q

J/E to record accrual of Real Property taxes levied & Est for Uncollectible accounts.

A

Debit:
-Real Property Taxes Rec.-Current

Credit:

  • -Revenues- Property Taxes
  • -Allowance for Uncoll.taxes Rec.- Current
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5
Q

J/E to reclassify Current Allowance for Uncoll. taxes to Delinquent & accrue Rev.

A

Debit:

  • Revenues- Property Taxes
  • Allow. for Uncoll. Taxes- Current

Credit:
—Allow. for Uncoll. Taxes- Delinquent

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6
Q

Purchase Method

[Expenditure Method]

A
  • Asset as Expenditure & Reserve for items on hand.
  • Expenditure Current Assets when purchased:
    ~Supplies & Inventory
  • Reverse (set up as current asset) for items not used during period (still on hand)
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7
Q

Consumption Method

[Expenditure Method]

A

-Set up Current Asset when purchased
(Supplies & Inventory)

-Expenditure items as Consumed.
(by Periodic physical count)

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8
Q

Encumbrances

A
  • Open Purchases orders represent an encumbrance or commitment of the available appropriations of a Gov’t.
  • Effectively monitor the degree to which they have used their budgetary appor.
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9
Q

J/E to set up Encumbrance in General Fund

[Step 1]

A

-Encumbrances

—–Budgetary Control

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10
Q

J/E to Reverse estimated Encumbrances

[Step 2]

A

-Budgetary Control

—–Encumbrances

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11
Q

J/E to Record the actual Expenditures

[Step 3]

A

-Expenditures

—– Voucher’s Payable/Cash

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12
Q

Encumbrances Not Used for?

A
  • Recurring Expenditures

- Such as Salaries

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13
Q

Encumbrances that are still Outstanding at Yr-End & Don’t Lapse

A
  • Reverse the J/E & Include Outstanding encumbrances in an appor. fund balance classification.
  • Included in ‘Fund Balance, Committed’
    OR
  • ‘Fund Balance, assigned’
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14
Q

Encumbrances in F/S

A
  • Will Not be specially detailed on the face of the F/S

BUT

  • May be disclosed if material
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15
Q

J/E to close Outstanding Encumb. at Yr-end & Reserve the Fund Balance

A

-Budgetary Control

—-Encumbrances

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16
Q

Gov’t- Wide Statement of Net Position

A

(Assets + Deferred Outflows of Resources)
MINUS
(Liab. + Deferred Inflows of Resources)
= NET POSITION

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17
Q

Gov’t Fund Balance Sheet/Present Financial Position that displays:

A

(C.Assets + Deferred Outflows of Resources)

[(C.Liab. + Deferred Inflows of Resources)
+ Fund Balance]

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18
Q

Proprietary & Fiduciary St. of Net Position

A
  • P. Funds are Encouraged & F.Funds are Required to report Net position as the difference Betwn:

(Asset + Deferred outflows of resources)
MINUS
(Liab.+ Deferred Inflows of resources)

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19
Q

Criteria for Qualifying for Deferred Outflow/Inflow Treatment

A
  • Transferor (Gov’t) conveys to the operator the right & related obligation to provide public service
  • Through the use & operation of a capital asset in exchange for significant consideration
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20
Q

Deferred Outflow/Inflow Treatment Examples:

A
  • An upfront payment
  • Installment Payments
  • New Facility or Improvements to an existing facility
  • Operator collects & is compensated by fees from 3rd parties.
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21
Q

Transferor Accounting

A
  • Continues to show the managed facility as a Capital Asset

- Displays a Liab. for significant contractual obligations

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22
Q

Derivatives Accounting Treatments

A
  • Derivatives are reported at FV

- Changes in value of derivatives used as investments are displayed within the investment revenue classification

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23
Q

Hedge Accounting Treatments

A
  • Changes in value of derivatives used for Hedging Activities are reported as either:

~ Deferred outflow or inflows of resources.

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24
Q

Imposed Non-Exchange Revenue Transactions

A
  • That are Reported as receivable prior to their formal levy
  • Such as property taxes recorded in Dec. but all fully levied until Jan.
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25
Q

Which two accounting bases are used in governmental accounting?

A
  • Accrual basis

- Modified accrual basis

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26
Q

What is a budget appropriation?

A

The highest amount allowed for a particular expenditure under a budget.

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27
Q

What is an encumbrance?

A

Records purchase and reserves it for the encumbrance.

Not used for Interest payments, considered expenditures

28
Q

What is the opening budgetary entry?

A

-Estimated Revenues Control

——Appropriations Control

Dr/Cr: Budgetary Fund Balance (plug)

29
Q

What is the closing budgetary entry?

A

-Appropriations Control

Dr/Cr Budgetary Fund Balance (plug)

——- Estimated Revenues Control

30
Q

Which fund statements are issued in Governmental Accounting?

A

Balance Sheet

Statement of Revenues; Expenditures; and Changes in Fund Balance

31
Q

When is Revenue recorded in Governmental Accounting?

A

When it is BOTH available and measurable; regardless of when it is spent.

32
Q

What is Derived Tax Revenue?

A

Money collected from people doing things:

Sales tax (buying cars) or income tax (people working)

33
Q

What is Imposed Tax Revenue?

A

Tax assessed just because things exist

Recorded as a revenue when BUDGETED.

Estimated uncollectible property tax revenues don’t offset revenues; so don’t net them.

Example: property tax on a car (even if it’s never driven); real estate tax

34
Q

How are Assets & Liabilities presented on the Statement of Net Position?

A

-Assets (Current & Non-Current)

  • —- Deferred Outflows of Resources
  • —- Liabilities (Current & Non-Current)
  • —–Deferred Inflows of Resources
35
Q

How are Capital Assets shown on a governmental Statement of Net Assets?

A

They are shown net of debt

Asset Cost - Accumulated Depreciation - Asset Liabilities : Net Assets

36
Q

How is infrastructure reported on a governmental Statement of Net Assets?

A

Modified approach:

- Reported at cost; no accumulated depreciation

37
Q

How is a Statement of Net Assets divided?

A

Into Governmental Activities and Business Activities

38
Q

How are activities presented in a Statement of Activities?

A

They are divided by function

Component units are reported in the Entity-Wide F/S & NOT the Fund F/S

39
Q

What is the primary objective of governmental accounting?

A

To provide information that is useful and benefits a wide range of users including:

Costs of services provided

Sufficiency of revenues to cover costs

Financial position of entity

40
Q

Dual Objectives

A

Both Gov’t & Non-For-Profit Organizations seek to demonstrate their:

  • Operational Accountability for entity taken as a whole
    &
  • Fiscal Accountability for specific funding.
41
Q

Purpose of Fund Accounting & Reporting

A
  • Compliance with legal restrictions

- Budget Control overspending limits

42
Q

I/S: Modified Accural Revenue is Recognized when?

(GraSPP)

A
  • Available: Means collectible within the current period or soon enough thereafter to be used to pay liab. in current period.
    &
  • Measurable means quantifiable in monetary terms.
43
Q

Inc. Statement: Modified Accrual Exceptions

A

Un-matured Interest on Long-term debt is not accrued

  • It is only recorded when legally due.
44
Q

Income Statement: Full Accrual

[Se-PAPI]

A
  • Revenue is Recognized when Earned

- Expenses are Recognized when Incurred

45
Q

Modified Accrual Basis of Acct. & Current Fin. Resources Measurement Focus

A

[GRaSPP]

  • General
  • Special Revenue
    AND
  • Debt Service
  • Capital Projects
  • Permanent
46
Q

Economic Resources Measurement Focus & Full Accrual Basis of Accounting

A

[SE-PAPI]

  • Service (Internal)
  • Enterprise
  • Pension
  • Agency
  • Private
  • Investment
47
Q

Non-Spendable

[Levels of Constraints]

A
  • Practical
  • Monies have spent, assets are either maturing or expiring
  • Inventory
48
Q

Restricted

[Levels of Constraints]

A
  • External
  • Legislation, Grantor, or Creditor Requirements must be satisfied
  • Bond Holder
49
Q

Committed

[Levels of Constraints]

A
  • Internal
  • Highest Governing authority establishes limits
  • Legislator
50
Q

Assigned

[Levels of Constraints]

A
  • Internal

- Intention without Formal Commitment

51
Q

Unassigned

[Levels of Constraints]

A
  • No Constraint as to use
52
Q

Budgetary Accounting: BEG. J/E

A

DR

  • Estimated Revenue Control
  • Est.Other Fin. Sources
  • Budgetary Control

CR

  • –Appropriations Control
  • –Est. Other Financing Uses(T.I./T.O.)
  • –Budgetary Control (Pos./Surplus)
53
Q

Budgetary Accounting:

End of Period J/E

A
  • Appropriations Control
  • Est. Other Financing Uses(T.I./T.O.)
  • Budgetary Control (Pos./Surplus)
  • —- Estimated Revenue Control
  • —–Est.Other Fin. Sources (T.I)
  • —–Budgetary Control (Negative)
54
Q

Accrual basis

A
  • Current Economic Resources Focus

- Revenues Recognized when Earned

55
Q

Modified Accrual Basis

A
  • Current financial Resources Focus

- Revenues recognized when Available and Measurable

56
Q

Activities Presented in a ‘Discreet’ Statement of Activities

A

Is Required:

  • If the activities of a component are distinguishable from the rest of the governmental entity
57
Q

Activities Presented in a ‘Blended’ Statement of Activities

A

Warranted:

  • If the activities of the component cannot be identified
    &
  • Separated from the rest of the governmental activities
58
Q

Which characteristics of service efforts & accomplishments is the most difficult to report for a Gov’t entity?

A

Relevance

59
Q

Fund Accounting is used by Gov’t units with resources that must be?

A
  • Segregated for the purpose of carrying on specific activities or attaining certain objectives.
60
Q

Compensated absences liab. in Gov’t wide F/S, should be reported at?

A
  • Balance Sheet date
61
Q

A Special Revenue Fund, overspent its available resources, the deficit would likely be displayed as?

A
  • Negative Fund Balance- Unassigned
62
Q

Order to Qualify for Hedge acct. treatment, a derivative must be?

A
  • Effective
63
Q

When should Property taxes due to a Gov’t unit be recorded as Deferred Inflow of Resources?

A

Property taxes Receivable:

  • Are Recogn. in advance of the year for which they are levied
  • Are Collected in advance of the year in which they are levied.
64
Q

Transferor Accounting: Deferred Inflow of Resources

A
  • Upfront or installment payments are displayed as an asset at their P.V. along with a deferred Inflow of Resources.
  • Recogn. in a Systematic & Rational Manner.
65
Q

Object Classes

A

[Gov’t Expenditures]-Examples:

~Personnel Service & Supplies

~Principal & Interest Payments for Debt Service expenditures

66
Q

Gov’t Expenditures: Character

A
  • Period of Benefit & Intergovernmental
  • Current Expenditures: Current Fiscal Period
  • Capital Outlays & Debt Service:
    ~Both the present & future fiscal periods

FAR (24 decks)

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