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Becker FAR > F9 > Flashcards

F9 Flashcards

1
Q

Operational Accountability Goal vs Fiscal Accountability Goal

A 
Operational = efficiency and effectiveness
Fiscal = compliance
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2
Q

Two Types of Reporting

A

Normal:

  1. MD&A
  2. Government-Wide Financial Statements
  3. Fund Statements
  4. Notes to Financial Statements
  5. Required Supplementary Information
  6. Other Supplementary Information

Comprehensive Annual Financial Report (CAFR)

  1. Introductory
  2. Basic Financial Statements and Required Supplementary Information
  3. Statistical Section
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3
Q

Primary Government Requirements

A
  1. Separately elected governing body
  2. Separate entity
  3. fiscally independent
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4
Q

Blended Presentation Requirements

A
  1. board is substantively the same
  2. component unit serves the primary government exclusively or almost exclusively
  3. component unit is not a separate legal entity
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5
Q

Reporting NFP Entities as a Component Unit Criteria

A
  1. resources are for the near-exclusive benefit of the primary government
  2. government has access to a majority of the resources
  3. resources held by the NFP are significant to the primary government
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6
Q

Are fiduciary funds reported on the government-wide financial statements?

A

No

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7
Q

Where is the analysis of significant variations in the original and final budget found?

A

MD&A

*does not include a variance analysis or a reconciliation of fund statements to government-wide statements

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8
Q

Must construction period interest be capitalized on the government-wide financial statements?

A

*it is not required for governmental activities

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9
Q

Modified Approach for reporting Capital Assets

A

Requirement 1: have an inventory and a summarized condition of assets
Requirement 2: a complete condition assessment at least every three years

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10
Q

Artwork & Historical Treasures Rules

A
  • can elect not to capitalize if:
    1. held for public exhibition
    2. collection is protected and cared for
    3. proceeds from sales of collection items be used to acquire other items for collections
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11
Q

Examples of component units

A

Rescue Squad & Board of Education

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12
Q

3 Categories for Government-Wide Revenues

A
  1. S ervice Charges
  2. O perating grants/contributions
  3. C apital grants and contributions
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13
Q

Major Fund Rules

A
  1. Larger than 10% of all revenues/expenses, asset, etc. of governmental funds or larger than 10% of all enterprise funds
    and
  2. larger than 5% of revenues, expenditures, etc. of all governmental and enterprise funds combined
  • general fund is always a major fund
  • internal service funds are not used in the calculation of these amounts
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14
Q

Reconciliation of Fund to Government-Wide

A 
1. Balance Sheet
G RaSPP Fund Balance 
\+ Assets (non-current) (NET OF DEPRECIATION)
- Liabilities (non-current)
\+ Service fund net position 
B asis of accounting
A ccrued
R evenues and
E xpenses
2. Statement of Revenues, Expenditures, and Change in Fund Balance 
G RaSPP Net change 
- Other financing sources 
\+ Expenditure - capital outlay (NET OF DEPRECIATION)
\+ Service fund net income 
B
A
S
E
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15
Q

For Fund Financial Statements, where is the statement of cash flows required?

A

*for proprietary funds

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16
Q

Classifications of Proprietary Fund Cash Flow Statement

A
  1. Operating
  2. Noncapital Financing
  3. Capital Financing
  4. Investing
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17
Q

What items are included in Noncapital Financing Cash Flows?

A
  1. property taxes (not restricted for capital use)
  2. operating transfers in/out
  3. operating grants or subsidies
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18
Q

Which cash flow method must be used by proprietary funds?

A
  • direct method

* also includes a reconciliation at the end

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19
Q

General Governmental Disclosures

A
  • description of government-wide activities
  • policies relating to elimination of internal activity
  • description of the modified approach if used
  • segment information
  • measurement standard for measurable and available
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20
Q

Required Supplementary Information

A

Budgetary comparison schedules showing the original budget, final budget, and actual amounts
*variance computation between budgets and between actual and budget are both optional

  • infrastructure and assessed condition and cost to maintain for past 5 years
  • pension information for the 10 most recent fiscal years
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21
Q

Reciprocal vs Non-reciprocal Interfund Activity

A

Reciprocal

  1. interfund loans
  2. interfund services provided and used (sales/expenses)

Non-Reciprocal

  1. Interfund transfers
  2. Interfund reimbursements
  • eliminated on the GOVERNMENT-WIDE FINANCIAL STATEMENTS
  • shown as transfers, due to/from on the fund financials
22
Q

How should transactions between the primary government and its fiduciary funds be reported?

A

*expensed, as if it was between external parties

23
Q

Interfund receivables and payable are titled

A

Due to/due from

24
Q

Which method of accounting do NFPs use?

A

full accrual accounting

25
Q

Required Financial Statements for NFPs

A
  1. Statement of Financial Position
  2. Statement of Activities
  3. Statement of Cash Flows
    (4. ) Statement of Functional Expenses (voluntary health and welfare organizations are REQUIRED)
26
Q

Components of Financial Position

A

Assets - Liabilities = Net Assets

27
Q

Are internally restricted funds listed as restricted?

A

NO

28
Q

Net Asset Classifications for NFP

A

Unrestricted
Temporarily Restricted
Permanently Restricted

29
Q

How are over-expenditures in temporarily restricted assets handled?

A

*they are treated as a decrease in unrestricted net assets

30
Q

Expenses decrease which net asset classification?

A

*expenses always decrease unrestricted net assets

31
Q

Which method of cash flow may be used for NFPs?

A

*direct or indirect method

32
Q

Restricted donor contributions are what type of cash flow?

A

Financing

33
Q

If a marketable security meets the definition of a cash equivalent but is restricted by a donor, how is it classified?

A

*not included as a cash equivalent

34
Q

Example of fundraising expenses

A

*unsolicited merchandise sent out

35
Q

Functional Classification of Expenses

A
  1. Program Support Expenses
  2. Fund-raising expenses
  3. Management and general costs
  4. Multiple cost items
36
Q

Revenue Recognition for:

  • Cash Contributions
  • Unconditional Promises
  • Conditional Promises
A

Cash Contribution = revenue when received
Unconditional Promises = revenue when received
Conditional Promises = revenue when the condition is met

*payment ahead of time is credited to REFUNDABLE ADVANCE

37
Q

Donated Services Requirements

A
  1. enhance or create a non-financial asset
    or
  2. require specialized skills that the provider possesses and would otherwise have been purchased by the organization

DR: Expense
CR: Contributions–non-operating revenue

38
Q

Donated Materials Recording

A

DR: Asset
CR: Contribution: Support

Pass Through Organization
DR: Expense
CR: Unrestricted contributions-supplies

39
Q

Account to use when restrictions are removed

A

DR: Satisfaction of time restriction
CR: Satisfaction of time restriction

*revenue can be temporarily restricted and an allowance for doubtful accounts can be set up as well

40
Q

Restricted Contributions Accounting Entries

A

*will usually include a DR: to expense and CR: to cash in the unrestricted fund as the assets are released from the restriction

41
Q

Exchange Transactions for Members

A

Amount Transferred

=Contribution Revenue

42
Q

Recipient Accounting: Holding Resources for Others

A

Without Variance Power
DR: Asset
CR: Refundable advance

Granted Variance Power
DR: Asset
CR: Contribution revenue

Financially Interrelated (manages on behalf of beneficiary)
DR: Asset
CR: Contribution revenue

43
Q

Beneficiary Accounting: Holding Resources for Others

A

*recognized unless the recipient is explicitly granted variance power

Financially Interrelated = Equity
DR: Asset
CR: Equity transaction

Pools of Assets - Beneficial Asset = Revenue
DR: Beneficial Interest
CR: Contribution Revenue

Recognized Receivable and Contribution Revenue
DR: Receivable
CR: Contribution revenue

44
Q

Gain/Loss Treatment for NFP

A

increase/decrease to UNRESTRICTED assets UNLESS it is restricted, at which point it increases/decreases temporarily or permanently restricted assets
*may be recorded in unrestricted if the stipulations are met in the same reporting period as the gains/losses

45
Q

Endowment Fund Types - NFP

A
  1. Permanent Endowment
  2. Term Endowment
  3. Quasi-endowment (governing body; unrestricted net asset)
46
Q

Gross Revenue from Tuition and Fees Calculation

A

Assessed Student Tuition and Fees

=Gross Revenue from Tuition and Fees

47
Q

Patient Service Revenue vs. Net Patient Service Revenue

A

Gross Patient Service Revenue

=Net Patient Service Revenue

Other Operating Revenue

Non-Operating Revenue = unrestricted

48
Q

Donated Services are what type of revenue for NFPs?

A

non-operating

49
Q

How should income be reported for voluntary health and welfare organizations?

A

*break out each revenue type by source and whether it is restricted or unrestricted

50
Q

Purpose of Statement of Functional Expenses

A

*assess an organization’s service efforts including the cost of services and how resources are utilized

  1. program support services
  2. fund-raising
  3. management and general

Becker FAR (10 decks)

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