F9 (Fund Structure and Acct, Transactions and Events, Gov Funds FS)

Question 1

current financial resources measurement focus (GRSPP):

Answer 1

• non-CA/CL not reported in gov fund BS
• cap outlay expenditures reported on face of gov-fund CFO
• proceeds from LTD recorded in gov fund as OFS
• pmt of “P”+int recorded as expenditures

Question 2

derived tax revenues: [accrual upon receipt]

Answer 2

taxes imposed on exchange transactions (commercial sales tax, income tax)

Question 3

imposed non-exch revenues: [accrual when billed]

Answer 3

non-exch transaction taxes (fines, penalties, property taxes)

*typically accrued when billed since collection is not in doubt

Question 4

gov-mandated non-exch transactions:

Answer 4

grants conveyed by 1 gov to another (state/county) to mandate certain activities

Question 5

voluntary non-exch transactions:

Answer 5

resources willingly conveyed by a gov to another for purpose or use w/o equal exchange in value; revenues recog’d when restrictions are met

Question 6

primary gov and component units:

Answer 6

primary gov:
meets "SELF" test;
-Sep'ly 
-Elected gov board
-Legal entity and
-Fin'ly independent

component unit:
-gov that cannot stand by itself (presented with primary gov)

Question 7

discrete vs blended presentation (of component units):

Answer 7

[discrete units are presented in separate columns]

*blended:
- unit exclusively serves primary gov
OR
-substantially the same as primary gov
(consolidation of activities)

• discrete:
• all other units that are not blended

Question 8

reciprocal vs. non-reciprocal interfund activity:

Answer 8

• reciprocal:
• includes exch-type transactions b/w funds
• accounted for as I/R and I/P (due from/due to)
• interfund svc’s provided and used represent sales and purchases b/w funds at external prices [rev and exp]
• non-recpirocal:
• non-exch transactions
• interfund transfers of assets and funds w/o equiv exch are reported as OFS/OFU after nonop rev and exp
• interfund pmt of exp’s accounted for as reimbursements (not displayed as interfund transactions)

Question 9

in gov-wide, FS display for interfund activity:

Answer 9

• interfund activity within a particular column = eliminated before prep of gov-wide FS
• interfund activity b/w columns = report as “internal balances” on statement of NA and “transfers” (rev/exp) in statement of act’s; not eliminated
• interfund activity b/w primary gov and fiduciary funds are reported as if b/w external parties

Question 10

JE for new debt proceeds:

Answer 10

Dr Cash

Cr OFS-debt proceeds

Question 11

JE for imposed non-exch rev [no BDE recog’d]:

Answer 11

Dr property T/R (current)
Cr allowance for uncoll taxes (current)
Cr property tax revenue

Question 12

inventory of supplies purchase method: [initial addition of inventory as expenditures]

Answer 12

*time of purchase:
Dr Expenditures
Cr V/P

*at YE:
Dr Inv of supply
Cr Nonspendable fund bal - Inv

**under this method, remaining inventory must be placed in BS b/c it cannot be spent in that year

Question 13

Consumption method:

Answer 13

*time of purchase:
Dr Inventory of supply
Cr V/P

*at YE:
Dr Expenditures
Cr Inventory of Supply

Question 14

Fund balance class’n “NU CAR”:

Answer 14

• N = nonspendable
• inventories, prepaid expenditures, legally/contractually req’d to be maintained intact (perm fund principal)
• U = Unassigned
• residual class’n for G fund (only fund possessing (+) balance
• C = Committed
• can only be used for specific purposes imposed by gov’s highest level of decision-making authority
• A = Assigned
• constrained by gov’s intent to be used for specific purposes
• R = Restricted
• limited by such external sources (debt covenants, contributors, other gov/law/provision

Question 15

gov-wide statement of NP (BS):

Answer 15

(liabilities + def’d inflows)
= NP [RUN]

Question 16

Gov Fund BS:

Answer 16

(assets + def’d outflows) = (liabilities + def’d inflows) + fund bal

[A = L+ FB]

Question 17

shortcut for gov-wide and gov fund BS:

Answer 17

[GRSPP]:
A = L+FB

[SE PAPI]:
A-L = NP
- prop funds encouraged to report like this; fid funds required

[SE]:
A = L+NP

Question 18

Derivatives (hedge acct) in gov:

Answer 18

accounted for as def’d outflows/inflows of resource IF effective

[example]:
Dr Def’d outflow (unrealized loss)
Cr Derivative instrument

Dr Derivative instrment
Cr Def’d inflow
(unrealized gain)

Question 19

other def’d outflows/inflows list:

Answer 19

• refunding of debt
• imposed non-exch rev trans
• gov-mandated non-exch trans and voluntary ones
• sales of future rev’s and intra-equity transfers of future rev’s
• debt issuance costs
• leases
• regulated op’s
• assets assoc’d with unavailable resources
• certain changes in NPL

Question 20

special rev funds include:

Answer 20

sales tax fund, gas tax fund, funds to account for specific fees (special/admin/parking), grants funds (state+fed)