F9: Governmental Accounting (Part B) Continued

Question 1

What 4 things should be included in the MDA?

Answer 1

1- Description of the financial statements
2- Identity of primary government and component units
3- Economic conditions and outlook
4- Major initiatives

Question 2

Types of things in the description of the financial statements in MDA

Answer 2

• An easily readable analysis
• Condensed financial statement info
• Analysis of overall position and results of ops
• Analysis of balances and transactions of individual firms
• A description of the significant assumptions

Question 3

What 2 statements are included in the set of government-wide financial statements?

Answer 3

1- Statement of Net Position

2- Statement of Activities

Question 4

What focus and method of accounting is required for both statements?

Answer 4

• Economic resources measurement focus

- Full accrual basis of accounting

Question 5

Statement of Net Position Format

Answer 5

Assets
-Liabilities
= Net Position

Question 6

Net Position is divided into what 3 components?

Answer 6

RUN
R- Restricted
U- Unrestricted
N- Net investment in capital assets

Question 7

The term infrastructure assets refers to:

Answer 7

Streets, bridges, gutters, and other assets of the government

Question 8

How are infrastructure assets reported?

Answer 8

As capital assets

Question 9

2 approaches for recording capital assets

Answer 9

1- Required Approach

2- Modified Approach

Question 10

Required approach definition

Answer 10

All capital assets are recorded and depreciated

Question 11

Modified approach definition

Answer 11

• Infrastructure assets that are part of a network are not required to be depreciated
• Ongoing infrastructure expenditures are typically reported as expenses

Question 12

Governments may use the modified approach IF they meet these two requirements:

Answer 12

1- Government’s asset management system meets certain conditions
2- Government documentation should include data on asset preservation

Question 13

What conditions included in requirement one of the modified approach:

Answer 13

• Inventory is up-to-date
• Summarized condition assessment is done
• Each year, estimate is made of amount necessary to maintain and preserve the eligible infrastructure assets

Question 14

What conditions included in requirement two of the modified approach:

Answer 14

• A complete condition assessment is done at least ever 3 years
• reasonable assurance

Question 15

As a general rule, governments should _______ works of art, historical treasures and similar assets

Answer 15

Capitalize at historical cost or fair value at date of donation

Question 16

Regardless of whether collection items are donated, governments may elect to not capitalize if ALL of these 3 conditions are met:

Answer 16

1- Collection is held for public exhibition
2- Collection is protected
3- Collection is subject to an organizational policy

Question 17

In government-wide financial statements, ______ are not included

Answer 17

Fiduciary funds

Question 18

What is reported on the “Statement of Activities”?

Answer 18

Revenues & expenses using the full accrual basis

Question 19

The net expense/revenue for each function is classified into one of 3 categories:

Answer 19

1- Primary governmental activities (GRaSPP +S)
2- Primary business-type activities (E, no PAPI)
3- Component units

Question 20

3 Program Revenue Category Types

Answer 20

“SOC” away these revenues
S- charges for Services
O- Operating grants and contributions
C- Capital gains and contributions

Question 21

Internal transactions that artificially “double up” on activity should be ________

Answer 21

Eliminated

Question 22

Internal service fund activity should be reported in what column?

Answer 22

Governmental activities column