FAR Module 21 Misc. Flashcards
IAS 20 requires that revenue for a grant provided by a government entity be recognized when:
there is reasonable assurance that the entity can comply with the conditions of the grant and when there is reasonable assurance that the grant will be received.
What is the main difference between an extraordinary item and a special item?
An extraordinary item is outside of managements control. A special item is within managements control
T/F
a careful pro forma presentation of the implications of current year’s decisions for future financial statements is required to be included in the MD&A
FALSE
Which of the types of fiduciary funds should not be reported in the statement of changes in fiduciary net position?
Agency funds should not be reported in the statement of changes in fiduciary net position because they involve reporting for resources held by the government in a purely custodial activity. Current assets equal current liabilities in the statement of net position. There are no operating accounts and therefore no changes in net position.
How can you calculate Deferred Revenues using Receivable information?
Ending Receivables
Less Collections (within stated time-frame)
Less Ending Allowances
= Deferred Revenue
T/F
Government-wide financial statements should report information about the overall government without displaying individual funds or fund types.
TRUE
The government-wide financial statements consist of a statement of net position and a statement of activities. Those statements should “report information about the overall government without displaying individual funds or fund types” (GASB 2200.110). The statements should be prepared using the accrual basis of accounting and distinguish between governmental and business-type activities. Information about fiduciary funds should not be included in the statements.
T/F
Information about fiduciary funds should not be included in the government-wide financial statements.
TRUE
Unless required to be reported elsewhere, how should escheat property, held for a short period of time for another governmental entity, be reported?
As an asset in an agency fund, offset by a liability
T/F
Depreciation on general capital assets, including infrastructure, is always required.
Under GASB, certain infrastructure capital assets are not required to be depreciated under the modified approach.
A balance in the Budgetary Fund Balance—Reserved for Encumbrances account in excess of a balance of encumbrances account indicates
a recording error. These two accounts are always opposite of each other in a JE
River City has a defined contribution pension plan. How should River report the pension plan in its financial statements?
Identify in the notes to financial statements the types of employees covered and the employer’s and employees’ obligations to contribute to the plan.
Expenditures of a governmental unit for insurance extending over more than one accounting period can be treated how?
may be allocated between or among accounting periods or may be accounted for as expenditures of the period of acquisition.
GASB states: “Expenditures for insurance and similar services (prepaid items) extending over more than one accounting period need not be allocated between or among accounting periods, but may be accounted for as expenditures of the period of acquisition.”
A city taxes merchants for various central district improvements. Which of the following accounting methods assists in assuring that these revenues are expended legally?
Both fund accounting and budgetary accounting
How can you calculate Current Year Revenue using Receivable Information?
Current Year Receipts \+ Ending Receivables - Ending Allowances - Beginning Receivables \+ Beginning Allowances = Current Year Revenue
T/F
Report the interest from the notes payable benefiting specific functions as a direct expense of those functions and report the remaining interest as a separate line as an indirect expense.
TRUE
