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FAR 8 Flashcards

1
Q

How do you reconcile the net increase in fund balance for governmental funds to the change in net position for governmental activities?

A

G Change in Governmental Fund Balance
O Other Financing Sources
E Expenditure-Capital Outlay (Net of Depreciation)
S Internal Service Fund Net Income
= Change in Net Position in Gov’t Wide Fin Statements

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2
Q

The focus of government wide financial statements is?

A

Operational accountability.

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3
Q

What is the minimum budgetary information required to be reported in the supplementary schedules?

A

A schedule showing the original budget, the final appropriations budget, actual inflows, outflows and balances on a budgetary basis.

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4
Q

How do you classify disbursements of loans on the cash flow statement? (They do this as their business)

A

Operating activities (if that is their primary business)

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5
Q

A water enterprise fund received interest of $10k on long-term investments. How is this recorded on the cash flow stmt?

A

Investing activities
Although cash receipts associated with interest income are frequently classified as operating activities for purpose of commercial statement of cash flow reporting, enterprise funds report these cash inflows as investing activities.

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6
Q

What are the three comprehensive annual financial report sections?

A

1) Introductory section
2) The Basic financial statements along with other required supplementary information mandated by GASB #34
3) Statistical Section

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7
Q

Governmental-wide financial statements focus on the

A

operational accountability of the government.,

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8
Q

Government reporting standards established by GASB 34 require?

A

Government wide fianncial statements, Fund Financial Statements and notes to the financial statements.

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9
Q

Management’s discussion and analysis and required supplementary information represent part of the total requirement to meet?

A

GASB 34 Reporting Standards, not the basic financial statements.

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10
Q

A city has identified the non-major funds within its fund types. In its financial report, the city

A

May (Not Must) include combining financial statements for non-major funds for each fund type in the supplementary information.

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11
Q

The Management’s Discussion and Analysis section in the Comprehensive Annual Financial Report should be titled?

A

Basic Financial Statements and Required Supplementary information.

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12
Q

What is a required component of the required supplementary information preceding the basic financial statements for general-purpose governments?

A

Management’s discussion and analysis

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13
Q

The MD&A section would not include?

A

A reconciliation of fund financial statements and government wide financial statements.

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14
Q

Government-wide financial statements should include all government-wide activities associated with operational accountability for ?

A

Component Unit Activities
Business Type Activities
Governmental Activities
(Fiduciary activities should be excluded from government wide measures of operational accountability since fiduciary resources cannot be used to support the governments programs or other services)

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15
Q

Under the modified approach to capitalizing infrastructure, governments apply the following to recording current year additions:

A

Infrastructure expenditures are reported as expenses except for outlays that result in additions or improvements, which should be capitalized.

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16
Q

The government-wide financial statements include?

A

A statement of net position and as statement of activities prepared using the ECONOMIC RESOURCE MEASUREMENT FOCUS and ACCRUAL BASIS OF ACCOUNTING

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17
Q

Governemnt wide financial statements do not include what statement?

A

Cash flows.

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18
Q

The statement of activities includes separately displayed categories of program revenues which include?

A

Charges for services
Operating Grants and Contributions
Capital Grants and Contributions

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19
Q

A government would consider which statistics when determining major funds?

A

Aggregate Revenues / Expenditures

Aggregate Assets / Liabilities

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20
Q

Financial statements prepared in accordance with the provisions of GASB 34 will include:

A

Government wide financial statements prepared using accrual basis accounting, fund financial statements, notes to the financial statements and required supplementary information the encompasses a letter title “managements discussion and analysis” and budget vs actual comparisons including display of the originally adopted budget and the changes that resulted in the final amended budget.

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21
Q

IF a city plans to present its Budgetary Comparison schedule as part of the required supplementary information, what is required?

A

1) Must include originally adopted budget, the final amended budget and the actual results for the year
2) May compute the difference between the original budget and the final amended budget
3) May use either GAAP or budgetary presentation formats as basis of accounting
4) May include the variance of actual performance from the final amended budget.

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22
Q

Budgetary comparisons are made relative to what financial statements?

A

Fund financial statements, not the government wide financial statements.

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23
Q

Presentation of variance of the amended budget to the actual results are?

A

Optional.

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24
Q

A town elected to use the modified approach for reporting infrastructure. In order to comply with the requirements of modified approach to reporting infrastructure, the town my prepared schedules which:

A

Describe the assessed condition of the infrastructure (updated once every 3 years) and the estimated annual amount to maintain and preserve the condition level established and disclosed.

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25
Q

When is blending financial statements used?

A

When the component unit is so intertwined wit the primary government that it is in substance the same as the primary government. Use the failure of legal entity test. Entities that are no legally separate entities are blended with the primary government.

26
Q

What is the basic criterion used to determine the reporting entity for a governmental unit?

A

Financial accountability.

27
Q

Governmental funds do not prepare what statement?

A

Cash Flows, since the measurement focus is financial resources.

28
Q

Should cash outflow from a city utility representing payments in lieu of property taxes be included in a statement of cash flows for a governmental entity?

A

Yes, because it is an enterprise fund. Enterprise funds prepare a statement of cash flows.

29
Q

In preparing government wide financial statements for a governmental entity, interfund receivables and payable between governmental and enterprise funds should be?

A

Reported as internal balances.

30
Q

Inter fund receivables and parables are displayed in the fund financial statements but are?

A

Eliminated as part of the preparation of the government wide financial statements.

31
Q

If a primary government’s general fund has an equity interest in a joint venture, all or a portion of this equity interest should be reported in the ?

A

Government-wide statement of net position.

32
Q

Trust funds are used to account for?

A

Resources of the governmental unit acting as a trustee.

33
Q

Agency funds are used to account for?

A

Funds where the governmental entity is acting as a custodian.

34
Q

Fixed assets of a governmental unit, other than those accounted for in proprietary funds or fiduciary funds, should be accounted for in the ?

A

Governmental activities column of the government wide statements of net position.

35
Q

How do you record a transfer between general fund and enterprise fund for services rendered to the general fund?

A

Dr. Expenditures

Cr. Due to electric utility enterprise fund

36
Q

The portion of special assessment debt maturing in five years, to be repaid from the general resources of the government, should be reported in the?

A

Government wide statement of net position.

37
Q

The agency funds reports special assessment debt that will be repaid by?

A

Collections from third parties, NOT BY GENERAL RESOURCES OF THE GOV’T. (Must be the custodian).

38
Q

What is a cash equivalent?

A

An investment with original maturities of 3 months or less.

39
Q

What situation would increase the unassigned fund balance in the general fund at year end?

A

Appropriations exceed actual expenditures.

40
Q

What are the categories of program revenues? “SOC”

A

S Charges for services
O Operating grants and contributions
C Capital grants and contributions
(“SOC” away these revenues)

41
Q

Cash flows from non capital financing activities include:

A

1) Proceeds or payments related to borrowing not attributable to the acquisition, construction or improvement of capital assets.
2) Cash receipts or pmt related to grants or subsidies not attributable to capital purposes.
3) Property Taxes not designated for capital purposes.
4) Cash paid to other funds (other than for inter fund services)

42
Q

What are the governement funds?

A 
General
Special Revenue
Debt Service
Capital Project
Permanaent
Internal Service Funds
43
Q

What are the fiduciary funds?

A

Pension Trust

Private Purpose Trust

44
Q

Which format must an ENTERPRISE fund use to report cash flow operating activities in cash flow?

A

Direct method.

45
Q

What are the proprietary funds?

A

Internal service fund

Enterprise Fund

46
Q

What is the art criteria for capitalization?

A

Work of art must be held for public exhibition
Be protected/unencumbered
Proceeds from sale of any of the work must be reinvested for more work.
(IF SO, the artwork MAY be capitalized, but not required, and depreciated, which is also not required.)

47
Q

Government wide financials are presented in

A

Accrual basis

Economic resources

48
Q

Major fund treatment for purposes of fund financial statement presentation requires that a fund be?

A

Both 10% of its fund category’s assets, revenues, or expenditures/expenses and 5% of the combined governmental and enterprise assets, revenues and expenditures/ expenses.

49
Q

Is the general fund treated as a major fund?

A

Yes, it always is. It is the general operating fund of the government.

50
Q

The reporting status of a governmental unit is determined by whether it can stand-alone by it SELF based on the following characteristics:

A

Separately
Elected governing body
Legally separate entity
Financially independent status

51
Q

What is considered an optional presentation within a government’s required supplementary information?

A

Variances of actual performance from budget.

52
Q

Cash payments from customers are classified as cash flows from?

A

Operating activities.

53
Q

Property tax receipts and operating transfers out would be classified as cash flows from?

A

Net non capital financing activities.

54
Q

Special assessments for capital improvements are classified as?

A

Capital and related financing activities.

55
Q

Capital and related financing activities include?

A

Acquiring and disposing of capital assets, borrowing money for capital acquisitions and repaying amounts borrowed (including interest) as well as capital grants, special assessments levied for capital acquisitions.

56
Q

Non capital financing activities include?

A

Borrowing for non capital purposes as well as cash receipts from grants or subsidies, property taxes, internal transfers.

57
Q

Cash flows from operating activities would reconcile as follows:

A

Operating Income
Less: Increases in current assets other than cash
Plus: Increases in current liabilities (net of current portion of bonded debt)
Plus: Depreciation
=Total

58
Q

What activities should be excluded when governmental fund financial statements are converted to government wide financial statements?

A

Fiduciary activities are excluded from the gov’t wide financial statements.

59
Q

What does reciprocal interfund activity include?

A

Interfund Loans

Interfund Services

60
Q

Non reciprocal include:

A

Interfund transfers

Interfund reimbursements

61
Q

What should the budgetary comparison schedule show?

A

The original budget, the final amended budget and actual amounts. (Variance computations and process descriptions are optional)

62
Q

What should be included in the introductory section of a local governments comprehensive annual financial report?

A

Letter of transmittal.

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