FAR9 Flashcards

FAR9

1
Q

In governmental accounting

A

Accrue for payroll recorded:
DR Payroll Expenditures
CR Accrued Payroll Liabilities

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2
Q

City estimated 5% revenue will be uncollected

A

Receivable-THE SAME

Revenue-LESS

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3
Q

Salaries and wages incurred by general fund JE

A

DR Expenditures Control

CR Vouchers Payable

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4
Q

Primary difference b/w purchase and consumption method of accounting for inventory

A

The purchase method initially records purchase/additions as expenditures

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5
Q

the JE to record lease for agreement other than short term lease for lessor

A

DR Lease Receivable

CR Deferred inflows of resources

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6
Q

JE
DR Right of use asset
CR Lease liability

A

JE for Lessee
Proprietary fund entering into agreement as lessee for lease other than a short term lease and contract that transfers ownership

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7
Q

If lease financed with internal service revenue fund

A

DR Lease liability (principle)
DR Expenses control (interest)
CR Cash

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8
Q

If equipment is used in enterprise fund operations and financed with enterprise fund revenues and lease transfer ownership

A

DR Equipment

CR Liability

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9
Q

Estimated Revenues

A

Taxes

Fines and Penalties

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10
Q

Estimated Other Financing Sources

A
Interfund Transfers
Debt Proceeds (bonds and notes)
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11
Q

Actual expenditures are not relevant to the amount of appropriation

A

Estimated expenditures are appropriations- money set aside for specific purpose

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12
Q

The initial entry to set up the encumbrance

A

DR Encumbrances

CR Budgetary Control Account

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13
Q

Budgetary control account functions as

A

Constraint (ogranichenie) that reduces fuds availability

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14
Q

Appropriation – is the amount of money set aside from the budget to pay for certain budgetary line items. … Encumbrances – an encumbrance is a reservation of the appropriation for a specific item. Most expenditures are required to be encumbered before a legal obligation is made to pay for the item.

A

Encumbrances – an encumbrance is a reservation of the appropriation for a specific item. Most expenditures are required to be encumbered before a legal obligation is made to pay for the item.

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15
Q
City reported
$500k in appropriation
$100k in encumbrances
$300k in expenditures (Gov funds)
$75k in voucher payable
A

$500k originally available
$300k already spent on other items
$100k set aside on other items
$100k available

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16
Q

Governmental FS Classification (like IS):
Character
Function
Object

A
  • Character (when?) for Governmental Funds Current FY
  • Function (purpose?) Public safety
  • Transfers (Other financing source)
  • Object (enterprise expenses-salary)
17
Q

In Governmental Accounting

A

NO LTD
NO LT Assets
Expenditures Concept

18
Q

Depreciation Expense booked only in Governmental wide FS

A

No Depreciation expense in Governmental Fund! Fixed asset expensed.

19
Q

General fund JE to record lease without transferring ownership

A
  1. Lease execution (oformit)
    DR Capital outlay
    CR Other financial source (year lease payment*annuity factor)
  2. Lease payment
    DR Debt Service Expenditures-Principle (PLUG)
    DR Debt Service Expenditures-Interest (Implicit rate e.g.10%Total OUTSTANDING Lease OBLIGATONannuity due)
    CR Cash
  3. No JE for lease amortization
20
Q

Purchase method to establish supply inventory. Purchased supplies for $5K, in the year end $2k was not spend

A
1. DR Expenditure
   CR Cash
2. Supplies not used
DR Supplies/Inventory
CR Fund Balance-non-spendable
21
Q

PO was issued. Record in modified accrual accounting only.

Encumbrance- government obligation to spend money.

A
1. Record PO
DR Encumbrance
CR Budgetary control
2. To recognize satisfaction of PO Reverse JE 1 THE SAME AMOUNTS!
3. Record actual expenditures
22
Q

Remember BAE-BAE

Lapse- istekat’

A

For Budgetary accounting initial JE should be reversed

23
Q

JE to record lease establishment

A

Proprietary fund
DR ROU asset
CR Lease liability

Governmental fund
DR Capital outlay expenditures
CR Other financial sources

24
Q

Encumbrances outstanding at year end in states general fund

A

Liabilities in general fund

25
Q

Encumbrances outstanding at year end

A

Fund balance commitment at general fund

26
Q

Fund Balances-equity in BS if governmental funds =

Assets+deferred outflows-Liabilities-Degerred outflows

A

5 degrees of constraint:

  1. Non Spendable fund already spent. Not spent current assets by the end of the year. Prepaid expenditures, inventory Always, permanent fund principal). Always should be a balance
  2. Restricted Fund Balance (by external authorities by law, e.g. creditors)
  3. Committed fund balance (encumbered appropriation, resolutions by city commission, Encumbrances Outstanding at Year End)
  4. Assigned fund balance (not formally committed, government intends to assign it). Are not possible if unassigned balances are negative.
  5. Unassigned fund balance. Resources associated with not restricted, not committed, not assigned. Only General fund has positive unassigned fund balance.
27
Q

City council designeted funds in the enterprise fund

A

Unrestricted component of net position

28
Q

Budget control account increased when

A

PO is approved

29
Q

General fund always classified as

A

Major fund

30
Q

GRaSPP

A

General fund (taxes, ordinary operations)
special Revenue fund (specific taxes, restricted to finance specific activities)
and
Debt Service fund (paying general obligation debt)
Capital project fund (capital assets)
Permanent fund (principal not used)

31
Q

Which of the following fund of local government would report transfers to other funds as an other financing use?

A

General (only GRASPP funds)

32
Q

Capital Grants

A
  1. JE to record unrestricted government grant
    DR Cash
    CR Revenue
  2. JE to record restricted government grants (become revenue when spent)
  3. JE to recognize revenue restricted (when spent)
    DR Expenditures
    CR Cash
    DR Revenue collected in advance
    CR Revenue

Interfund transfers:
DR Cash (or due from other fund)
CR Interfund transfers

33
Q

JE to record contracts

A
  1. To record signed contract
    DR Encumbrances
    CR Budgetary Control
  2. JE for completed contract approved for payment
    DR Budgetary Control
    CR Encumbrances
  3. To record purchased/constructed asset
    DR Expenditures
    CR Cash
34
Q

JE to report Fixet Asset in Gov wide FS

A

Purchase- Cost to buy
Construction-Cost to construct
Lease obligation that transfer ownership-PV lease paymts
Donated-FV
Forfeited-Lower of cost to acquire or market

35
Q

GRaSPP

Balance Sheet

Assets (no fixed assets)

Liabilities (no LTD)

Fund Balances
Restricted for:

A

Statement of revenues, expenditures and changes in fund balance

Service
Expenditures ( no depreciation expense)
Other financing sources (uses)
Transfers
Net change in fund Balances
Fund Balance beginning
Fund Balance ending
36
Q

Relationship b/w the special Revenue, debt Service and capital project funds:

A

Intergovernmental -special revenue, unrestricted

Principal, Interest-Expenditures

Proceeds of long term capital related debt-Bond proceeds

37
Q

Encumbrances in GRASPP gunds

A

General : commit funds for PO
Revenue (special) fund:commit funds for PO
Project (capital fund): commit funds for PO
Debt Service fund:Not applicable
Permanent fund: Not applicable

38
Q

Public restricted funds recorded

A

Special Revenue fund used only if Principal and Interest available
Permanent fund used only if interest available
Permanent fund-to acquire art for city museum

In Permanent fund-FV

39
Q

Revenues

A
Revenues:
Property Tax
Fees and fines
Interest earned
Intergovernmental Special unrestricted
Interest earning
Charges for service
Receivable for state grant
Other financing sources:
Bond proceeds (LTD)
Transfers
Fund Balance beginning
Fund Balance ending