FAR 13 Flashcards
How do you record the JE for a new truck?
Dr. Cash
Dr. New Truck
Cr. Gain on exchange
Cr. Old Truck (net)
When a non monetary exchange lacks commercial substance, the general rule is?
No gain or loss is recognized and the book value approach is used, unless the cash/boot received is a proportional part of the gain recognized.
Personal financial statements should report assets and liabilities at?
Estimated current values at the date of the financial statements.
Demand bank deposits and long term receivables are considered?
Monetary assets.
Any security deposit is recorded as?
A liability, refundable security.
In a bond transaction, stockholders equity is increased by?
The value of the warrants.
How does a lessee record a lease with no bargain purchase option (a operating lease not finance)
The lessee records the lease as an asset and a liability at the lower (lesser) of the FMV of the asset at inception of the lease or cost (PV of the min lease payments)
How should a lease be depreciated (amortized) if the lessee does not take ownership at the end of the lease?
Depreciated amortized over the lease terms.
What should be disclosed for operating leases having remaining lease terms in excess of one year?
The future minimum rental payments required as of the last BS date should be disclosed in the aggregate and for each of the next five succeeding years.
How do you calculate a bonds book value?
The face value less the unamortized discount.
Encumbrances would not appear in which fund?
Enterprise.
If a government is agreeing to accept cash and spend it in a specified way, where does it belong?
Special revenue fund.
Sales taxes collected by Arien to be distributed to other governmental units belongs in which fund?
Agency fund.
A forfeiture act confiscate cash from illegal activities and disbursements can be used only for law enforcement activities. What fund does that belong in?
Special revenue fund.
What is a focus used in proprietary funds?
Income determination, capital maintenance and measurement of cash flows and balances.
An enterprise fund would be used when?
1) User charges cover the costs of the general public service and
2) net income information can be provided for an activity.
Accounting for financing of an agency’s services to other government departments on a cost-reimbursement basis should be accounted for in an?
Internal service fund.
The town operates municipal electric and water utilities. In which fund should the operations of the utilities be accounted for?
The enterprise fund. This fund accounts for a govt’s FOR PROFIT type of operations, which provide goods or services to the general public.
What are internal service funds?
Proprietary funds, which service internal users, one dept servicing another within the governmental entity.
What are special revenue funds?
Governmental funds, which account for proceeds of special revenue sources that are legally restricted to expenditure for specified purposes (such as a the fuel tax for highways).
The billings for transportation services provided to other governmental units are recorded by the internal service funds as?
Operating revenues
Dr. Due from other funds
Cr. Operating Expenses
A city purchased a piece of equipment to be used by a dept. financed by the general fund. How should the city report the acquisition in the general fund?
As an expenditure. Under the current financial resources measurement focus, all fixed asset acquisitions are recorded as expenditures.
The prescribed format for the presentation of the statement of financial position of a governmental fund adheres to what equation?
Assets and deferred outflows of resources equals liabilities and deferred inflows of resources plus fund balance
What are permanent funds used for?
To account for principal that is restricted and may not be expended.
