FAR 2 Flashcards
The fundamental qualitative characteristics of useful financial information are
Relevance & faithful representation
Comparability of government financial reports
Differences between financial repost should be due to substantive differences in underlying transactions or the governmental structure
The process of reporting an item in the financial statements of an entity is
Recognition
IASB two underlying assumptions
Going concern
Accrual accounting
FASB fundamental assumptions
Monetary unit
Historical cost
Periodicity
The cumulative effect of a change is accounting principle is shown as
An adjustment to beginning retained earnings
Budgetary activity JE
Estimated Revenue control
Appropriations control
Budgetary control
Actual activity JE Govt
Principal payment on debt
Debt service- principal expenditure xx
Cash. Xx
New debt proceeds are recorded as other financing resources, a resource inflow
Cash. Xxx
Other financing sources– debt proceeds. Xxx
Property tax GE （no bad debt expenditure)
Property tax receivable–current xx
Allowance for in collectible taxes-current. Xx
Property tax renenue。 xx
Encumbrance activity
Encumbrances. Xxx
Budgetary control. Xxx
Budgetary control. Xxx
Encumbrances. Xxx
Expenditure. Xxx
Vouchers payable. Xxx
Inventory of supplies govt JE
The purchase method
Expenditures 5000
Vouchers payable. 5000
Inventory of supply 1000
Non- spendable Fund balance inventory. 1000
The consumption method govt JE for inventory
Inventory of supply. 5000
Vouchers payable. 5000
Expenditures. 4000
Inventory of supply. 4000
Fund balance classifications
Non-spendable (permanent fund principal)
Restricted
Committed
Assigned
Unassigned positive& negative if over expenditure
Government-wide statement of net position
Assets
deferred outflows of resource （consumption of net assets）
-
Liabilities
Deferred inflows of resources （acquisition of net asset)
=
Net position
“tax position” as used in FASB refers to
The characterization of income or a decision to exclude reporting taxable income in a tax return
A decision not to file a tax return
An allocation or a shit of income between jurisdictions
A decision to classify a transaction, entity, or other position in a tax return as tax exempt
An entity’s status, including its status as a pass-through entity or a tax-exempt not for profit entity
The govt-wide financial statements consist of
Statement of net position
&
Statement of activity
The effective interest rate for a loan restructured in a troubled debt restructuring is based on:
The original contractual rate
Nongovernmental not-for-profit entities are required to provide
The statement of financial position
The statement of Activities
Statement of cash flows
FASB: An unrestricted cash contribution should be reported as
Operating Activities
cash received from contributions restricted by donors for noncurrent purposes such as fixed asset construction, acquisition or improvement, term endowments or permanent endowments are classified as
Financing activities
cash received from investment income restricted by donor stipulation to the same purpose are reported as
financing activities
