Final Exam Flashcards
General Fund
A residual fund that is used to account for and report all financial resources not accounted for and reported in some other fund.
Accounts for a majority of the day-to-day operating activities of a government.
Special Revenue Fund
Are used to account the proceeds of specific revenue sources that are restricted or committed to spending for specified purposes other than debt service or capital projects.
Capital Projects Fund
Are used to account for and report on financial resources that are restricted otherwise limited to spending for capital outlays, including the acquisition or construction of capital facilities and other capital assets.
Enterprise Fund
May be used for any activity whose products of services are sold for a fee to external users, such as the general public” Activities may include municipally owned utilities, mass transit facilities, toll roads and toll bridges, airports, parking facilities, and lotteries.
Internal Service Fund
Are used to account for providing goods or services within the reporting government (including its agencies and departments, other funds, and component units) or to other governments, on a user-charge, cost reimbursement basis. Activities may include motor pool operations, data processing, printing services, and supplies acquisition and distribution.
Arbitrage
Borrowing money at a certain interest rate while investing the money at a higher interest rate. Limitations on the amount of interest which can be earned on these investments with the excess being paid to the federal government, or it will be subject to either an excise tax on the excess earnings or revocation of the tax-exempt status of its debt.
Minimum reporting requirements
Management’s discussion and analysis (MD&A)
Government-wide financial statements
Fund financial statements
Notes to the financial statements
Required supplementary information (RSI)
Government-wide Statements
Statement of net position (balance sheet)
Statement of activities
Fund financial statements - Governmental funds
Balance sheet
Statement of revenues, expenditures, and changes in fund balance
Fund financial statements - Proprietary funds
Statement of net position
Statement of revenues, expenses, and changes in fund net position
Statement of cash flows
Primary Government
All state governments and general-purpose local governments – such as counties, cities, towns, and villages – are primary governments.
Also, may include special purpose governments such as a local school district, park district, or hospital district provided it has a separately elected governing body, is legally separate, and is fiscally independent of other state and local governments.
Component Unit
Legally separate organizations for which the elected officials of a primary governments are financially accountable.
Nature and significance of their relationship may cause the primary governments financial statements to be misleading.
Fiscally independent requirements
Determine its own budget
Levy taxes or set user charges
Issue bonded debt
Management’s Discussion and Analysis (MD&A)
Provides an objective analysis of the government’s financial operations and financial position, based on facts known to management as of the date of the auditor’s report.
It should focus on the primary government, but cover matters applicable to component units if, in management’s professional judgment, it is appropriate to do so.
MD&A should compare the current year with the previous one, and discuss both positive and negative aspects of that comparison.
Management’s Discussion and Analysis (MD&A) required elements
Brief discussion of financial statements.
Condensed financial information from the government-wide statements, comparing current and prior years.
Analysis of the government’s overall financial position and results of operations.
Analysis of balances and transactions of individual funds.
Analysis of budgetary variations.
Capital asset and long-term debt activity.
Infrastructure assets.
Future effects.
Required Supplementary Information (RSI) – Budget vs. Actual
Original appropriated budget.
Final appropriated budget.
Actual inflows, outflows, and balances for the year on the budgetary basis of accounting.
***Variance between final and actual (NOT required)
Interfund transfer
Flow of assets (such as cash or goods) from one fund to another without equivalent flows of assets in return and without a requirement for repayment.
Interfund loan
One fund lends cash to another with requirement for repayment
Property-tax revenue
Recognized in the fiscal period for which the tax is levied.
Tax revenue must be available and used to pay current liabilities not exceeding 60 days
Revenues expected to be collected after the 60 day period are deferred and recognized in the next year.
Other Financing Source
Increases or decreases in assets of a fund that generally do not increase or decrease the net assets of an entity as a whole.
Interfund transfers, proceeds from the issuance of debt, and proceeds from the sale of capital assets.
Includes items which aren’t found in government wide statements – proceeds of debt, transfers in, transfers out. (Resources not shown in current assets or liabilities).
Fund Balance
Excess of assets over liabilities and deferred inflows of resources in the general fund.
Cumulative excess of difference between revenues and expenditures.
Nonspendable
Not spendable in form.
Legally or contractually required to be maintained intact
Restricted
Restricted to use for a specified purpose by external creditors by provisions of the law.
Committed
Constrained as a result of formal action such as legislation, resolution or ordinance.
Assigned
Internal restriction put into place by the governments board of directors.
Can more easily be reclassified for other uses than an external restriction.
Unassigned
Residual amounts from the general fund.
May be used for any legal purpose.
