FAR Module 21 Governmental Fund JEs Flashcards
What are the three General Fund Real Accounts & their standard account balances?
Current Assets (DR) Current Liabilities (CR) Fund Balance/Fund Equity (CR)
The General Fund, Fund Balance/Fund Equity Account has what items in it?
Reserved & Unreserved
What are the four General Fund Nominal Accounts & their standard account balances?
Revenues (CR)
Other Financing Sources (CR)
Expenditures (DR)
Other Financing Uses (DR)
What are the six General Fund Budgetary Accounts & their standard account balances?
1) Estimated Revenues (DR)
2) Estimated Other Financing Sources (DR)
3) Appropriations (CR)
4) Encumbrances (DR)
5) Estimated Other Financing Uses (CR)
6) Budgetary Fund Balance (DR/CR)
Show the standard JE for adopting a budget (which will occur in the general fund)
Estimated Revenues (DR)
Appropriations (CR)
Estimated Other Financing Uses (CR)
Budgetary Fund Balance (CR)
What accounts would you debit/credit in a transfer out of the General Fund?
Other Financing Uses - Transfer Out (DR)
Due to … (CR)
What accounts would you debit/credit in a transfer in to the General Fund?
Due from … (DR)
Other Financing Sources - Transfer In (CR)
What JE would you make when recorded taxes as revenue (which will occur in the general fund)?
Taxes Rec - Current (DR)
Allowance for Uncollectible Taxes Current (CR)
Revenues (CR)
T/F
Under the modified accrual basis, revenues are recognized when earned
FALSE
Revenues are recorded in the period in which they are both measurable and available
What are the unique requirements for recognizing property taxes? This occurs in the General Fund
Property taxes are recognized as revenue when:
1) Available - either collected by year end or soon enough to pay the liabilities of the current period, which is no more than 60 days after the end of the fiscal year
2) The taxes are to finance the budget of the current period
What journal entry would you record when incurring liabilities (which will occur in the General Fund)?
Expenditures (DR) Vouchers Payable (CR)
T/F
All resource outflows which are legally authorized appropriations are debited to Expenditures
TRUE
What JE would you make when recording a purchase order, which will occur in the General Fund? (Nothing received)
Encumbrances (DR)
Reserved for Encumbrances (CR)
What JEs would you make when receiving a previously recorded purchase order, which will occur in the General Fund?
First, reverse the entry made previously:
Reserved for Encumbrances (DR)
Encumbrances (CR)
Second, record the expenditure
Expenditures (DR)
Vouchers Payable (CR)
What JE would you make when paying off a liability, which will occur in the General Fund?
Vouchers Payable (DR) Cash (CR)
What JE do you make when revenue collections exceed estimated revenues, which will occur in the General Fund?
Allowance for Uncollectible (DR)
Revenues (CR)
Plug the amount that exceeded the estimation
What might you do if items purchased during the year and charged to expenditures are still unused? Use Supplies as an Example (supplies are recorded in the general fund)
Materials & Supplies Inventory (DR)
Reserved for Inventory of Materials & Supplies (CR)
What entry would you make the reclassified receivables from current to delinquent (this entry will occur in the general fund)
Receivable - Delinquent (DR)
Allowance for Uncollectible Revenues - Current (DR)
Allowance for Uncollectible Revenues - Delinquent (CR)
Receivable - Current (CR)
What are the closing entries that need to be made for the general fund?
First, Reverse the Entry that was made to record the budget:
Budgetary Fund Balance (DR)
Appropriations (DR)
Estimated Other Financing Uses (DR)
Estimated Revenues (CR)
Second, Record ending balances:
Revenues (DR) Expenditures (CR) Encumbrances (CR) Other Financing Uses - Transfers (DR/CR) Fund Balance - Unreserved (DR/CR)
Under GASB 33, the revenue from a reimbursement grant cannot be recognized until when (reimbursement grants are recognized under the Special Revenue Fund)
After the expenditure is recognized.
Most granting governments won’t even provide resources unless the receiving government provides evidence that an appropriate expenditure has taken place.
Show the JEs that will be made when an expenditure is recorded that allows a reimbursement grant to be received (these JEs occur in the Special Revenue Fund)
First, show the expenditure:
Expenditures (DR)
Cash (CR)
Next, show the grant is receivable:
Grants Rec (DR)
Revenues - Grants (CR)
Finally, show when the grant is received:
Cash (DR)
Grants Rec (CR)
T/F
Must like the budgets of general and special revenue funds, capital project funds record annual budgets
FALSE
An annual budget for capital projects funds may not be legally adopted and need not be recorded formally in the accounts
T/F
In some situations, bonds may be purchased to support financing for a capital project fund, therefore you may need to record and bond premium and discount and amortize it
FALSE
Premiums and discounts are not amortized in governmental funds or in the fund financial statements because it is on the modified-accrual method.
If bonds are issued for the purpose of a capital project and they are issued at a premium, what do you do?
Record a JE transferring the premium amount to the Debt Service Fund for the eventual payment of the debt:
Other Financing Uses - Transfers Out (DR)
Cash (CR)
Show the JE to record issuance of bonds for the purpose of a capital project
Cash (DR)
Other Financing Sources - Proceeds of Bonds (CR)
Show the JE to record acceptance of a bid from a general contractor for a capital project
Encumbrances (DR)
Reserved for Encumbrances (CR)
Show the JEs made to record progress billings due to a General Contractor, and then partial payment of the progress billings
First, reverse the JE that was done when the bid was accepted:
Reserved for Encumbrances (DR)
Encumbrances (CR)
Second, record the progress billings: Expenditures - Construction (DR) Contracts Payable (CR)
Finally, show partial payment:
Contracts Payable (DR)
Cash (CR)
Contracts Payable - Retained Percentage (CR)
What kind of account is the Contracts Payable - Retained Percentage account?
This is a liability.
T/F
Interest accrued on investments that are for the purpose of paying off capital projects should not be recognized.
FALSE
Interest is recognized when it is measurable and soon available to finance the debt service fund expenditures
What are the closing entries for a capital projects fund?
First, close out the revenues and financing sources to the Unreserved Fund Balance:
Revenues - Interest (DR)
Other Financing Sources - Proceeds of Bonds (DR)
Fund Balance - Unreserved (CR)
Next, use the fund balance, unreserved to clear out any encumbrances or expenditures:
Fund Balance - Unreserved (DR)
Encumbrances (CR)
Expenditures (CR)
T/F
Impaired capital assets that are no longer used by the government should be reported at the lower of carrying value or fair value
TRUE
Under modified accrual account, expenditures for principal and interest are recorded when?
When they are legally due. This will affect the timing of Debt Service Fund JEs
What JEs will you make in a Permanent Fund when a donation is received to be invested?
Cash (DR)
Revenues (CR)
Investments (DR)
Cash (CR)
What JEs will you make in a Permanent Fund when interest is earned on an investment?
Cash/Rec (DR)
Revenues - Investment Income (CR)
What JEs will you make in a Permanent Fund when expenditures are made from investment income?
Expenditures (DR)
Cash/Vouchers Payable (CR)
According to GASB 52, land and other real estate held by an endowment for investment purposes should be reported at what?
at FV at each reporting date
According to GASB 52, for land and other real estate held by an endowment for investment purposes that have changes in FV during the period, the changes should be reported how?
As a part of investment income
Accounting for special assessment depends on the liability of the governmental unit for the special assessment debt. If the governmental unit is not obligated in any way for the debt, how should the special assessment activities be accounted for?
In the agency fund
Accounting for special assessment depends on the liability of the governmental unit for the special assessment debt. If the governmental unit is primarily or potentially liable for the debt, how should the special assessment activities be accounted for?
As if it were any other capital improvement and financing transaction. Therefore, construction activities will be recorded in the capital projects fund, debt principal and interest activities will be recorded in a debt service fund, etc.
