FAR 13 Flashcards
What type of balance do Government funds use in their equity section in the individual fund F/S?
-Fund Balance in Equity Section
What type of fund balance is show for Proprietary funds in the Equity section of the F/S?
Uses Net position
What is the J/E for purchase orders for supplies in a governmental fund?
Dr Encumbrances
Cr Budgetary Control
What type of Gov’t fund will most likely have non-spendable inventory of supplies?
General fund, since at the end of the period will have supplies not used
Committed fund balances
The most restrictive classification of Gov’t funds
Internally limited by Gov’t’s highest lvl of decision-making authority
What is the J/E for Property taxes receivable paid in advance for which they are levied?
Dr Property Taxes Receivable XXX
Cr Deferred inflows of resources XXX
Revenues are recognized when measurable and available
What is the J/E for Property taxes collected in Advance of the period that they are actually due?
Dr Cash
Cr Deferred inflows of resources
What is a reciprocal interfund activity?
Interfund loans & interfund services provided and used
Internal Service Billings
Non-Reciprocal Transfers
Interfund transfers - Routine transfers
Classified as Other Financing Sources in the statement of Revenues, Expenditures and Changes in Fund balance
What is the Equation to solve for Ending or available appropriations?
B - Budget: Appropriations XXX
A- Activity: Expenditures (XXX)
E - Encumbrances (XXX)
Available Appropriations: XXX
Appropriations
Approved spending for the budgetary account, estimated expenditures
Encumbrances
Committed or assigned amounts in the budgetary control account for purchase orders
Expenditures - Vouchers payable
Actual incurring of bills, recorded as a Cr to cash or Cr to vouchers payable
Vouchers payable - represent expenditures not paid off and included in total expenditures amount
What is the J/E for a Government budget when purchase orders are issued/Approved?
Dr Encumbrances (Estimated) 5000
Cr Budgetary Control 5000
What is the J/E when supplies and Invoice are actually received?
Dr Budgetary Control 5,000
Cr Encumbrances (Estimated) 5000
Dr Expenditures (Actual) 4,950
Cr Vouchers Payable. 4,950
What is the budgetary equation to solve for Total Fund balance?
What is the budgetary equation to solve for unassigned fund balance?
Total Assets - Total Liabilities = Total Fund Balance
Total Fund Balance - Any fund balance constrained (open purchase orders) = Unassigned Fund Balance
What is an example of a Quasi-external transaction between funds? Does it give rise to recording of an expenditure? What is the J/E?
ex: Routine Service charges for utilities - could have been purchased from a 3rd party and not from the city’s electrical utility enterprise fund
Dr Expenditures
Cr Due to Electric Utility Enterprise Fund
For Lease questions, pay attention to PMT date and solving for the ending balance of the lease liability
For example multiply PMT’s by implicit rate PV and than subtract out any payments made to solve for the Ending Lease Liability amount
What is not true regarding B/S accounts using the re-measurement (temporal) or translation (current rate) method?
Incorrect: All B/S accounts items are translated using the current year end rate un der translation method.
Accounts that do not use current year-end rates: C/S and APIC are translated using the historical exchange rate.
R/E is a roll forward calculation
SLOW DOWN WHEN READING QUESTIONS
YOU NEVER CALCULATE THE PROPROTION OF A LOSS ONLY FOR GAIN IN TRANSACTIONS THAT LACK COMMERCIAL SUBSTANCE
If Inventory is sold at cost which ratio decreases?
Net Profit Margin
Since Sales increases with no effect on Net Income since inventory was sold for the amount it was bought at
When a stock option plans grant date and exercise date are different, when should the stock options outstanding account be reduced?
When are stock options increased?
Reduced: At the exercise Date
Increased: Grant Date
Which fund Governmental, fiduciary or Proprietary fund reports transfers of other funds as an “Other Financing Use?”
Government funds: General Fund
How do proprietary funds record transfers to other funds?
As Non-Operating Expenses
Do Fiduciary funds reports transfers to other funds?
No, transactions with the Gov’t and fiduciary fund is accounted by a trustee or a 3rd party outside the Gov’t.
What is the purpose of a Debt Service Fund? (General Gov’t fund)
Accumulates resources and payments for General L/T liability principal and interest
Special tax restricted for paying back L/T debt of a county’s capital project
What is the purpose of an Enterprise Fund?
Proprietary fund:
Provide goods or services to the general public
similar to a for profit enterprise
What is the function of a Internal Service fund?
Provides goods and services to other Gov’t departments on a cost reimbursement basis
What is the function of a Capital Projects fund?
Account for resources to be used for buying or constructing major Capital Facilities
