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CPA - FAR > FAR 29 - Governmental Accounting > Flashcards

FAR 29 - Governmental Accounting Flashcards

1
Q

What are the three major types of funds in governmental accounting?

A

Governmental, Proprietary, Fiduciary

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2
Q

Which two accounting bases are used in governmental accounting?

A

Accrual basis - current economic resources focus (revenues recognized when earned)

Modified accrual basis - current financial resources focus (revenues recognized when available and measurable)

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3
Q

What is a budget appropriation, encumbrance & expenditure?

A

Appropriation - The highest amount allowed for a particular expenditure under a budget. “Authorized to spend”

Encumbrance - An open order; can be considered a form of estimated expenditure. “Expected to spend”

Expenditure - Actual Cost

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4
Q

What are the five types of governmental funds?

(Modified Accrual)

A

General Fund

Special Revenue Fund

Permanent Fund

Capital Projects Fund

Debt Service Fund

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5
Q

What is a General Fund?

A

The operating fund of the governmental unit.

Records Significant Revenues: Taxes; Tickets; Fines; Licenses Records Significant Expenditures: Police; Education; Fire Dept

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6
Q

What is a Special Revenue Fund?

A

Restricted for a specific purpose such as street repair. Earmarked

Example: gas tax that finances repairs & maintenance of the roads

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7
Q

What is a Permanent Fund?

A

Legally restricted fund; where only earnings can be used to fund programs. Principal remains intact.

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8
Q

What is a Capital Projects Fund?

A

Used to acquire and build facilities. Major acquisition or construction activities.

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9
Q

What is a Debt Service Fund?

A

Handles repayment of long-term debt and related interest.

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10
Q

Which financial statements are issued in Governmental Funds?

A
  • Balance Sheet
  • Statement of Revenues, Expenditures, and Changes in Fund Balance
  • (Modified Accrual)
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11
Q

When is Revenue recorded in Governmental Accounting?

When is Revenue accrued in Government Accounting?

A

When it is BOTH available and measurable; regardless of when it is spent.

Acrrued for:

  • Property Tax to be collected within 60 Days
  • Grants
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12
Q

What is Derived Tax Revenue?

A

Money collected from people doing things: Sales tax (buying cars) or income tax (people working) or motor fuel tax

or

Taxes assessed on exchange transactions.

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13
Q

What is Imposed Tax Revenue?

A

Tax assessed just because things exist.

Example: property tax on a car (even if it’s never driven); real estate tax Recorded as a revenue when BUDGETED.

Estimated uncollectible property tax revenues don’t offset revenues; so don’t net them.

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14
Q

What are the types of Proprietary Funds?

(Accrual)

A

Internal Service Funds - to serve the needs of other governmental units (i.e. motor pool, IT department)

Enterprise Funds - provide goods or services to external users (i.e. post office/untilities)

  • Usually “Fees” based.
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15
Q

What are the five Fund Balance Types found in the Balance Sheet of a Governmental Funds Financial Statement?

A

Restricted - Restricted by Contributor

Committed - Restricted by Government

Assigned - Intended for a purpose

Unassigned - Available to be spent

Non-spendable - Not in a spendable state

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16
Q

What are the types of Fiduciary Funds?

A

Agency Fund - government acts as an agent or custodian (Collects money and disburses to others) (Due To/From)

Pension Trust Fund - Government is a trustee for a pension plan

Investment Trust Fund - Government is a trustee over a series of investments

Private Purpose Trust - Trust that benefits various individuals and entities

17
Q

How are Capital Assets shown on a Government-Wide Statement of Net Position?

A

Capital Assets are shown net of debt.

+ Asset Cost

  • Accumulated Depreciation
  • Asset Liabilities

= Net Assets

18
Q

How is Infrastructure reported on a Government-wide FS Statement of Net Position?

A

Infastracture is shown Modified approach:

  • Reported at Cost; NO accumulated depreciation

Infastracture shown on Preferred Approach:

  • Report at Cost & Depreciate
19
Q

On a Government-wide F/S, how is a Statement of Net Position presented/divided?

A

Rows to the very Left:

Asset, Deferred Outflows, Liabilities, Deferred Inflows = Net Position

Columns to the Right:

Governmental Activities

  • Consists of 5 Govt Fund + Internal Svc

Business Activities

  • Consists of Enterprise fund

Total (Govt & Bus Activities)

Component Units

20
Q

How are activities presented in a Statement of Activities of a Government-wide FS?

A

They are divided by function If the activities of a component are distinguishable from the rest of the governmental entity; then discreet presentation is required If the activities of the component cannot be identified and separated from the rest of the governmental activities; then blended presentation is warranted. Component units are reported in the Entity-Wide Financial Statements and not the Fund Financial Statements.

21
Q

What is the primary objective of governmental accounting?

A

To provide information that is useful and benefits a wide range of users including: Costs of services provided Sufficiency of revenues to cover costs Financial position of entity

22
Q

What are Government-mandated revenues?

What are voluntary Revenues?

A

Govt Mandated Revenues - One level of government provides funds to another level.

  • Example: Federal Grants

Voluntary Revenues - Transactions entered into willingly by parties (Unrestricted grants & voluntary donations)

23
Q

Modified accrual funds (PD Consents to Smoking Grass)

A

Permanent

Debt Service

Capital Projects

Special Revenue

General

24
Q

Accrual Funds (I-PIPE-Alot

A

Internal Service

Pension Trust

Investment Trust

Private Purpose Trust

Enterprise

Agency

25
Q

Interfund Transactions (4 Types)

A
  1. Operating
    • General to Capital; General to Debt Svc
  2. Quasi-external - pmts from one fund to another
    • General buying from Enterprise Fund
  3. Reimbursements
    • repmt from one fund to another
  4. Loans
26
Q

Bugetary Entry Set-up Budget (JOURNAL ENTRY)

A

DR: Estimated Revenues

DR: Estimated Sources

DR: Budgetary Fund Balance (PLUG)

CR: Appropriations

CR: Estimated Uses

CR: Budgetary Fund Balance (PLUG)

***Reverse Entries to close at YE

27
Q

Spending Cycle (Encumbrance Accounting)

A

Purchase Order Journal

DR: Encumbrances

CR: Reserved for Encumbrances

Order Filled (received goods) 2-Step

DR: Reserved for Encumbrances (same amt as PO)

CR: Encumbrances (same amt as PO)

DR: Expenditures

CR: Voucher’s Payable

28
Q

What are the five major sections to the general purpose financial statements of a government entity?

A
  1. MD & A
  2. Government-wide FS (Accrual)
    • Statement of Net Position
    • Statement of Activities
  3. Fund Financial Statements
    • Government Fund (Modified Accrual)
      • Statement of Net Position (B/S)
      • Stmt of Rev, Expenditures & Change in Fund Bal
    • Proprietary Funds (Accrual)
      • Statement of Net Position (B/S)
      • Stmt of Expenses & Change in Fund Bal
      • Statement of Cash Flows
    • Fiduciary Funds (Accrual)​
      • Statement of Fiduciary Net Position
      • Statement of Changes in Fiduciary Net Position
  4. Footnotes
  5. Required Supplementary Information (RSI)
29
Q

Which financial statements are issued in Proprietary Funds?

A
  • Statement of Net Position
  • Statement of Revenues, Expenses, and Changes in Fund Net Position
  • Statement of Cash Flows
    • Operating (direct method required)
    • Investing
      • Includes interest/dividend income
      • Loans made
    • Noncapital Financing
    • Capital Related Financing
30
Q

Which financial statements are issued in Fiduciary Funds?

A
  • Statement of Fiduciary Net Position
  • Statement of Changes in Fiduciary Net Position
31
Q

Which statements are issued in the Governmnet-wide Financial Statements?

(Accrual)

A
  • Statement of Net Positions
  • Statement of Activities
    • Provides info to asses operational accountability

CPA - FAR (36 decks)

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