FAR Own Flashcards 8
What is the purpose of an enterprise fund?
They are used to account for operations that are financed and operated in a manner similar to private business enterprise. (provision of goods and services that are financed by user charges).
What is the journal entry to record money billed to a governmental fund from an internal service fund?
DR: Due from other funds
CR: operating revenues control
An enterprise fund is required if any one of these criteria is met:
- The activity is financed with debt that is secured soley by a pledge of the net revenue from FEES and CHARGES
- Laws and regulations require that the cost of providing services be recovered through FEES
- The pricing policies of the activity establish FEES and CHARGES designed to recover its costs
What is the purpose of the internal service funds?
Established to finance and account for services and supplies provided exclusively to other departments within a government or other governmental units, typically on a cost-reimbursement basis (The other DEPARTMENT/FUND is customer NOT CITIZEN)
What are the sources of revenue for internal service funds?
Restricted Grant Revenue(money when spent), Operating Revenue(money when earned), Non operating Revenue
How is equity in the statement of net position displayed for internal service funds?
(like a balance sheet) RUN (Restricted, Unrestricted, and Net investment in capital assets)
Which funds have a fund balance and which funds have a net position?
The GRASPP funds have a fund balance and SE PAPI have a net position (on the statement of net position)
What is the order of presentation of line items on the proprietary fund statement of revenues, expenses, and changes in fund net position?
INCASET Income (operating) Non-operating income and expense Capital contributions and Additions to endowments Special items (unusual or infrequent) Extraordinary Items Transfers
What are the financial statements required for an investment trust fund?
Statement of changes in fiduciary net position and the statement of fiduciary net position
What is the purpose of the pension trust fund?
They account for government sponsored defined benefit and defined contribution plans and other employee benefits such as post retirement health care benefits.
What is required for SE funds but not for PAPI funds?
The statement of cash flow is required for proprietary funds but not required for fiduciary funds
What is the purpose of an agency trust fund?
Think of it like a mailman. It collects cash to be held temporarily for an authorized recipient to whom it will be later disburse. Can be from another fund or some individual or firm or even government outside of the government (makes no decisions and doesn’t recognize revenue)
What are the financial statements for the agency fund?
Only the balance sheet - statement of fiduciary net position. No income statement applicable and non statement of cash flows applicable
current assets = current liabilities
(No net position)
What is the purpose of the Private Purpose Trust Fund
(NOT general public use) The private purpose trust fund is the designated fund for reporting all other trust arrangements under which principal and income are for the benefit of one of the following:
- Specific individuals
- Private Organizations
- Other governments
What is the purpose of the Investment Trust Fund?
a governmental entity that sponsors one or more external investment pools (sponsoring government) Should report the external portion of each pool as a separate investment fund
