F9 Flashcards
What is the order of reporting for general-purpose governmental units?
Managements discussion and analysis, government wide financial statements, fund financial statements, notes to financial statements, required supplementary information
When are budgetary comparison schedules required? And what do they display?
Prepare for general fund and each major special revenue fund requiring a budget. Display original budget, final budget, an actual inflows, outflows, and balances on a budgetary balance
What is the pneumonic used in the reconciliation of the change in Fund Balance and governmental fund financial statements to change in position for governmental activities in the government wide financial statements?
GOES. Change in governmental fund balance, other financing sources, expenditure - capital outlay (net of depreciation), internal service fund net income
What type of accountability is the focus for governmental wide financial statements?
Operational
What type of activity or cash receipts associated with interest income on the statement of cash flow?
Investment activities
What are the three sections and a comprehensive annual financial report?
Intro, basic financial statements and other required supplementary information, and the statistical section
What type of accountability is the focus of fund financial statements?
Fiscal
What three items are included in the basic financials?
Government wide financials, fund financials, and notes to the financials
What approach is the joint presentation of government wide and fun financial statements and appropriate reconciliation called?
Integrated approach
What we do with nonmajor funds?
Man include combining financial statements and supplementary information
In the comprehensive annual financial report, how is management discussion and analysis considered?
Required supplementary information
What is the purpose of management discussion and analysis?
Introduce basic financials and provide analytical overview of financial activity
What activities are excluded from government wide measures of operational accountability and why?
Fiduciary activities since the resources cannot be used to support the governments programs or services
How can government wide financial statements classify net assets?
RUN. Restricted, unrestricted, net investment
Under the modified approach to capitalizing infrastructure, how are regular infrastructure expenditures treated? What if the expenditures result in improvements or additions?
Report as expenses; capitalize
With government wide financial statements, where can we find information about all assets liabilities revenue expenses gains and losses?
Statement of net position and statement of activities using economic resources measurement focus and accrual method of accounting
What is the criteria for determining major funds?
Revenues, expenditures or expenses, assets, or liabilities at least 10% of the associated total for all governmental or enterprise and at least 5% of total of the associated totals for all governmental and enterprise funds
Are variances required or optional when preparing budgetary comparison schedules?
Optional
How should budgetary comparison schedules be presented?
As required supplementary info or in the basic financial statements for the general fund and for each major special revenue fund that has legally adopted the budget
What are the eligibility requirements for infrastructure assets to not report depreciation expense under the modified approach?
Government must report assessed condition of infrastructure every three years and estimated annual amount to maintain and preserve the conditions level established and disclosed
What is the SELF test and what is it used for?
Used to determine whether presentation should be blended or discreet. Separately elected governing body, Legally separate, Fiscally independent of other state and local governments
In government wide statements, how are interfund receivables/payables reported?
As internal balances
Where do we report debt to be repaid for general resources?
In government wide statement of net position
When with the unassigned fund balance in the general fund increase?
When appropriations exceed actual expenditures
What is the pneumonic for remembering categories of program revenue?
SOC. Charges for services, operating grants and contributions, capital grants and contributions
What fun data appears in a governmental activities column of government wide financials?
GRaSPP + S
What method must proprietary funds used to prepare their statement of cash flow?
Direct
What three criteria must be met in order for art/historical treasures to elect to not capitalize?
Held for public exhibition, collection is protected, and there is a policy in place requiring proceeds from sales of collection items to be used to acquire other items for collections
What is the BARE mnemonic?
Basis of accounting issues (conversion from modified to full accrual) Accrual of additional Revenue Expenses
Where is the reconciliation of governmental fund financial statements to government wide presentations found
On the face of the financial statements or accompanying disclosure in notes to financial statements
What type of fund is the general fund always displayed as?
Major
What is the criteria for major fund treatment?
Fund must be both 10% of its fun categories assets, revenues, or expenditures/expenses and 5% of combine governmental in enterprise assets, revenues, and expenditures/expenses
What are the requirements for blended presentation?
Only one of the following required:
Board of the component unit is substantially the same as the primary government
Component unit serves the primary government almost exclusively
Component is not a separate legal entity
When is discrete presentation used?
When criteria for blended is not met
Which activities are excluded when governmental fund financial statements are converted to government wide financial statements?
PAPI, Fiduciary Activities
What does reciprocal interfund activity include?
Interfund services and interfund loans
What does nonreciprocal interfund activity include?
interfund transfers and interfund reimbursements
What three financial statements are required from not-for-profit organizations?
Statement of financial position, statement of activity, and statement of cash flow
What happens when we received a conditional promise?
Nothing
What happens when temporarily restricted items are expended?
Reclassified to unrestricted
For not-for-profits, how do we calculate contribution revenue?
Amount contributed - fair value of purchases given in exchange
What is the journal entry for recording promises to give?
Debit: pledges receivable
credit: allowance for doubtful accounts
credit: contribution revenue
Differentiate between temporarily and permanently restricted net assets
With temporarily restricted, donor imposed stipulations either expire by passage of time or can be filled and removed by actions of the organization while permanent do not expire or become fulfilled
How do we treat internal board designated funds?
Unrestricted
How do we treat contributed services? Promises to contribute?
Unrestricted; Temporarily restricted
The two characteristics for not for profits to be interrelated?
One organization must be able to influence the operating in financial decisions of the other and have an ongoing economic interest in the net assets of another
For not-for-profit, how is donated property recorded and recognized?
At fair market value as support
What type of assets are affected in a not-for-profit exchange transaction?
Unrestricted
What are the two expense categories used by not-for-profits and what do they involve?
Program services: functional expenses directly related to the mission of the organization
Support services: functional expenses related to general and administrative costs, cost of membership development, and fundraising
What do contributions to a not-for-profit include?
Transactions that are unconditional, nonreciprocal, voluntary, and not of an ownership investment
How do not-for-profits report their expenses in the statement of activities and notes to the financials?
By functional classification: program classification, supporting activity
What are the journal entries to record the satisfaction of temporary donor restrictions and issuance of scholarships?
Debit: satisfaction of program restrictions – temporarily restricted
credit: satisfaction of program restrictions – unrestricted
debit: scholarship expense
credit: tuition revenue
What are the two criteria for recognizing donated services?
Services received either create/enhance non-financial assets or require specialized skills that would regularly need to be purchased if not for donation
debit: expense
credit: contributions
When a not-for-profit receives a donation for the benefit of a specific beneficiary without variants power, how are these assets accounted for?
Assets at fair value and a liability to the beneficiary
What are the three conditions that must all be met for an entity to not need to recognize the contribution?
Help for public exhibition, protected, organizational policy in place for proceeds from sale of collection items are used to require other items for collections
How do we treat common costs incurred?
Allocate to various functional classifications
How are unrestricted gift to a hospital treated?
Non-operating income
What is the focus of not-for-profit reporting guidance?
Basic information for the organization as a whole
What is a quasi-endowment fund and how is it displayed?
Accounts for assets that have been internally designated by the institution for a specific purpose.
Displayed as unrestricted net assets
How are funds restricted and hospital accounting?
Externally restricted as to use by donor, grantor, or other source of resources
How are revenues from tuition and fees reported?
At gross amount
In a not for profit, when our pledges recorded in the accounts?
With legally enforceable
In the analogy of a not-for-profit, how are marketable securities reported? Where the gains and losses reported?
At fair value; gain/loss reported and statement of activities
How may not-for-profit’s pool their investments?
May pool all investments, but must read locate realized and unrealized gains and losses to net asset classifications
What type of activity are unrestricted cash contributions in the statement of cash flow?
Operating
In the statement of activities for not-for-profit us, all expenses are reported as a decrease in which net asset class?
Unrestricted
For not-for-profit’s, how are operating expenses recorded?
Unrestricted
Which not-for-profit entities are required to prepare a statement of functional expense?
Voluntary health and welfare organizations. A statement of functional expense is optional for all other not for profits
How are good faith deposits associated with conditional promises recorded?
As a liability titled “refundable advance”
How are unconditional pledges collected over more than one year reported and valued?
Reported as pledges receivable; valued at present value
How are cash contributions restricted by the donor for long term purposes reported in the statement of cash flow?
Cash inflow from financing activities
What are the two requirements to record donated services at fair value?
Create/enhance non-financial assets or required specialized skills would have been otherwise purchased
When organizations are financially in a related, how do you beneficiaries recognize an interest in the net assets (what is the journal entry)?
Debit: interest in net assets
credit: equity transactions
(in statement of activity)
How are donor imposed restrictions that are met in the same period they were received recorded?
Unrestricted support
What type of activity is the sale/purchase of works of art in the statement of cash flow?
Investing
How are not-for-profit gains and losses classified?
Reported in the statement of activities as increase or decrease in unrestricted net assets
How are not-for-profit investments valued?
At fair value
When are cash contributions and unconditional pledges recognized?
As contribution revenue in the year itch the cash for pledges received
Where are funds received five college from downers the stipulated that the principal is not expendable but that the income generated maybe expended by current operating funds for?
Endowment fund
For which not-for-profit colleges this depreciation expense required and not required?
Private colleges require; public colleges do not require
How are transfer is received by governmental type find reported in the statement of revenue, expense, and changes and fund balance?
Other financing source
To reconcile the Fund Balance of governmental funds to the net position of governmental activities on the government wide financial statements, what mnemonic do we use?
GALS BARE:
+ Governmental fund balances
+ Assets used in governmental activities (net of accumulated depreciation)
- Liabilities (long term) not recorded on the fund financial statements
+/- internal Service fund net position
Basis of
Accounting
+ additional accounts receivable associated with Revenue recognized under accrual versus modified accrual basis
- additional accounts payable associated with Expenses recognized under accrual vs. modified accrual basis
What mnemonic do we use to reconcile the change in Fund Balance of governmental funds to the change in net position of governmental activities on the government wide financial statements?
GOES BARE:
+ Governmental changes in fund balances
- Other financing sources associated with new debt proceeds or capital leases
+ Expenditures related to capital outlay in excess of depreciation
+ Expenditures related to debt service principal
+/- internal Service fund change in net position activity
Basis of
Accounting
+ accrued revenue associated with earnings recognized under accrual vs. modified accrual basis
- additional accrued expenses recognized under accrual vs. modified accrual basis
What is the mnemonic for recording donated services?
SOME + Enhanced physical asset Specialized skills Otherwise purchased Measured Easily