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Copy #3 > FAR - GASB - Major Funds > Flashcards

FAR - GASB - Major Funds Flashcards

1
Q

Major Fund Rules

A

1) total assets & deferred outflows or resources, liab, and deferred inflows of resources, revenues, or expenditures/expenses of any individual gov’t fund or enterprise fund are at least:

10% of total corresponding amount for ALL FUNDS OF THAT CATEGORY (govt, or enterprise) and

2) 5% of corresponding amount for that element for all gov’t AND enterprise funds combined.

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2
Q

Balance Sheet

A

General fund = always a major fund

All other funds in statement are major funds

All non-major gov’t funds are aggregated & reported in single column

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3
Q

Operating Statement

A

Modified accrual acct for gov’t fund types

Major funds shown in separate columns

Non-major funds aggregated & reported in single column

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4
Q

Budget & Actual Comparison

A

Budgetary comparison required for 1) general fund and for each annually budgeted 2) major special revenue fund

Presented as part of basic financials OR as supplemental info

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5
Q

Budget to GAAP Reconciliation

A

if budget is on basis that differs from GAAP, then reconciliation between budgetary basis & GAAP should be presented

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6
Q

Proprietary Fund Financials

A

1) Statement of Net Position
2) Statement of Revenues, Expenses, & Changes in Net Position
3) Statement of Cash Flows
4) Major fund reporting doesn’t apply to internal service funds; therefore, they are reported in single column

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7
Q

Fiduciary Fund Financials

A

1) Statement of Fiduciary Net Position
2) Statement of Changes in Fiduciary Net Position

  • not part of gov’t wide financials
  • never major funds
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8
Q

For what fund is major fund reporting not required?

A

Internal Service Funds -> not required b/c it’s an internal fund for internal purposes ONLY

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9
Q

True/False

Budgetary Comparison Schedule must report the original budget, the amended/final budget, and actual revenues and expenditures. The revenues and expenditures must be reported using the same basis used to prepare the budget: governmental budgets are frequently prepared on a cash or near-cash basis.

A

True

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10
Q

General Fund

A

Required Fund, only one

  • modified accrual
  • budgetary AND encumbrance acct
  • accts for financial resources of PG that are not accounted for by any other kind
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11
Q

General Fund

Revenue

A 
Taxes
Licenses/Permits
Intergov't revenues (grants)
Charges for services
Fines/Forfeits
Miscellaneous
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12
Q

General Fund

Expenditures

A 
Current Operating (salaries/supplies)
Capital Outlays (land, buildings, improvements)
Debt Service (interest/principal payments)
Intergov't
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13
Q

Revenues: Susceptible to Accrual

A
  • revenues = measurable/available
  • when both conditions met, revenue = susceptible to accrual
  • 60 day rule
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14
Q

Gov’t Fund Financials

A

1) Balance Sheet
2) Statement of Rev, Exp, Changes in Fund Balance

3) Revenues, Expenditures, & Changes in Fund Balance - Budget-to-Actual:
- “statement of” if part of basic financials
- “budget comparison schedule” if placed in RSI

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15
Q

Special Revenue Funds

A

Accounting similar to General Fund

  • specific revenues restricted/committed to expenditure for specific purpose other than debt service/capital project
  • restricted/committed revenues = substantial portion of fund’s resources
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16
Q

Purpose of Debt Service Funds

A

Fund required if:

  • legally mandated, or
  • financial resources accumulated for principal/interest payments to be made in future yrs

*otherwise general fund used

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17
Q

Debt Service Fund Acct

A

Modified Accrual

Fund life tied to life of debt

Accounts for resources used in periodic payment of interest/principle on general obligation long-term debt

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18
Q

Capital Project Funds

A

Financial resources restricted, committed, or assigned to expenditure for capital outlays

  • accounts for resources use to construct/acquire major fixed assets for general gov’t purposes
  • major resource accounted for: bond proceeds (other financing source)
  • doesn’t account for business-type (proprietary) or trust fixed assets
  • fund life tied to construction/acquisition period
  • modified accrual
  • encumbrance acct, budgetary acct = optional
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19
Q

Permanent Funds

A
  • acct for resources held in trust by gov’t for benefit of gov’t
  • principal required to remain intact
  • earnings transferred to general fund OR special revenue fund for expenditure
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20
Q

Perm Fund Financials

A

1) Balance Sheet

2) Statement of Revenues, Expenditures, & Changes in Fund Balances

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21
Q

Fund Balance Categories

A

1) Nonspendable
2) Restricted
3) Committed
4) Assigned
5) Unassigned

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22
Q

General Fund records the original receipt of cash as Revenues, then transfers the cash to the Debt Service Fund. The Debt Service Fund records this receipt of cash as an operating transfer. The cash payments are recognized as Expenditures by the Debt Service Fund.

A

True

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23
Q

Proprietary Funds

A

1) Internal Service Fund
2) Enterprise Fund

  • business-type transaction = business-like acct
  • accrual accounting (economic resource measurement focus)
  • acct for long-term debt/assets
  • depreciation expense recorded
  • “Expenses” rather than expenditures
24
Q

Internal Service Funds

A

IN HOUSE business type transactions

EX: central garage, data processing, print shops

“billings to depts”: revenue account on a cost reimbursement basis

  • financial statement reported in supplemental section, (NOT in basic financials)
25
Q

Enterprise Fund

A
  • acounts for business-type transactions that govt provides to GENERAL PUBLIC

EX: public utilities, parking lots, airports, and solid waste landfills

Intent to cover all costs (including depreciation/capital maintenance) through user charges for service

Reported in basic financials subject to major/non-major fund reporting requirements

26
Q

When enterprise fund is required

A

1) activity financed by debt secured solely by pledge of net revenues from fees/charges of activity (revenue bonds)
2) laws/regulations require that costs of providing services be covered by such fees/charges
3) pricing policies of activity establish fees/charged designed to cover its costs and to maintain capital of activity

27
Q

Financials

A

1) statement of net position (balance sheet)
2) Statements of revenues, expenses, and changes in fund net position
3) Statement of Cash Flows

28
Q

Statement of Net Position

A

Contains current/noncurrent assets/liab similar to private sector

Equity section: categories of net position

  • Net Investment in Capital Assets
  • Restricted
  • Unrestricted
29
Q

Net Investment in Capital assets

A 
Historic cost of capital assets 
- Accumulated Depreciation 
= Net BV
- Capital Asset-related debt
(adj. for unspent proceeds)
= Net Investment in Capital assets
30
Q

Statement of Cash Flows

A

4 sections

  • direct method required for operating section (FASB allows either direct/indirect method)
  • noncash transactions reporting on face of statement (private allows reporting in notes)
31
Q

GASB financing section of SCFs

A

Fasb Financing = 1) Noncapital financing activities and 2) capital and related financing activities

32
Q

Cash Flows from Operating Activities

A
  • excludes interest revenues/expenses
  • includes loans made/collected for operations
  • direct method required
  • reconciliation of operating income to cash flows from operating activities must be present as part of the statement
33
Q

Cash Flows from Noncapital Financing Activities

A
  • debt issued to finance OPERATIONS
  • include interest related to such debt
  • transfers not related to capital acquisition
34
Q

Cash Flows from Capital and related financing activities

A
  • issuance/repayment of debt issued to acquire capital assets
  • include interest related to such debt
  • acquisition and sale of capital assets (investing of FASB)
35
Q

Cash Flows from Investing Activities

A

Acquisition and sale of investments in debt/equity instruments

  • interest/dividends on such investments
  • loans made/collected (except operating loans which appear in operating activities section)
36
Q

Noncash transactions

A

don’t involve cash

EX: donated assets, capital leases, unrealized gains/losses on investments, debt issued to acquire capital assets

37
Q

Principal revenue for internal service revenue fund & enterprise fund?

A

1) fees charged to internal users

2) fees charged to external users

38
Q

true/false

Shared Revenues received by a Proprietary Fund for operating purposes should be recorded as Non-Operating Revenues in the period in which they are earned and become measurable

A

true

39
Q

Pension Trust

A
  • assets held in trust for employees, retirees, and beneficiaries of pension plans
40
Q

Pension Trust - Types

A

Single Employer

Multi- employer:
1) Agent: several single employer plans pooled for admin functions each receives separate actuarial valuation

2) Cost-sharing: 1 large pension plan w/cost-sharing arrangements and 1 actuarial evaluation performed

41
Q

Pension Trust Reporting

A

Financials

1) Statement of Fiduciary Net Position
2) Statement of Changes in Fiduciary Net Position
- “additions/deductions” rather “revenues/expenses”

Required Supplementary Information (RSI)

  • Schedule of Funding Progress
  • Schedule of employer Contributions
  • Actuarial Information
42
Q

Investment Trusts Funds

A

Gov’ts frequently pool/commingle resources for investments

  • fund accounts for portion of fund = held for govts other than reporting entity
43
Q

Private-Purpose Trust Funds

A

For benefits of individuals/organizations except those related to:

  • pension plans
  • investment pools
  • permanent funds

*rare in use

44
Q

Agency Funds

A

Assets held briefly & distributed (clearinghouse) to other funds, individuals, govts, or orgs

EX: tax collection, special assessments, pass-through grants, payroll deduction

NOT reported in govt wide financials

Recognize ONLY Current Assets = Current Liabilities, *no equity/revenues (additions) and no expenses (deductions), or Net Position

45
Q

Special Assessment Agency Funds

A

Property owners agree to finance capital improvements that benefit their properties

financed by special assessment debt for which the govt is NOT OBLIGATED in any manner

Govt acts as agent - collects from property owners, acts as debt service agent

Construction of asset accounted for in capital projects fund (street improvement) or Enterprise (utility) depending on type of project

46
Q

True/False

  • Fiduciary Funds EXCLUDED from gov’t wide financials
  • govt acts as trustee for fiduciary funds has no “equity”these funds
A

True

47
Q

equity account is used by Pension Trust Funds?

A

Net Position Held in Trust for Pension Benefits.

48
Q

funds are used to account for any resources managed in trust by the governmental entity where the beneficiaries are outside of the governmental entity itself?

A

Private Purpose Trust Fund

49
Q

Functions of tax Agency Funds

A
  • each govt maintains own tax records
  • assessments turned over to TAF for collection
  • TAF sends bills to taxpayers
  • collects tax from taxpayers
  • remit collections to participating govts
  • if collection fee charged by TAF, revenue is recognized in General Fund no in TAF
50
Q

True/False

funded ratio of a pension plan compares the actuarial value of plan assets to the actuarial accrued pension liability.

A

True

51
Q

True/False

Due to Pension Trust Fund should be credited, not debited in connection with employer pension contributions.

A

True

52
Q

True/False

In addition to the actual earnings on plan assets, both employer and employee contributions are recognized as Additions in the Pension Trust Fund.

A

True

53
Q

True/False

Concerning Investment Trusts, cash available from all the different accounting funds, irrespective of whether or not they are restricted or unrestricted funds. Realized and unrealized gains and losses must be equitably allocated among the participating funds.

A

True

54
Q

True/False

Agency Funds act as intermediaries in the process of disbursing monies from one governmental entity to another. The government has no claim on the resources in the Agency Fund and does not recognize revenues when it receives the monies or recognize expenses when the monies are disbursed.

A

True

55
Q

True/False

Private-Purpose Trust Fund may be either expendable or nonexpendable. It is expendable if the principal of the trust gift, as well as the earnings, is expendable. A nonexpendable Private-Purpose Trust occurs when the principal must be maintained intact and only the earnings are expendable, or neither the principal nor the earnings are expendable

A

True

56
Q

True/False

Agency Funds prepare a Statement of Net Position and a Statement of Changes in Net Position. Since Agency Fund assets are always completely offset by liabilities, they do not report Net Position (assets - liabilities = 0). Agency Funds collect and distribute funds (e.g., property taxes) and do not recognize either revenues or expenditures.

A

True

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