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Becker Financial > Financial Lecture 8 > Flashcards

Financial Lecture 8 Flashcards

1
Q

Name the primary authoritative body for GAAP for governmental entities.

A

Governmental Accounting Standards Board (GASB)

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2
Q

What are the three account themes addressed by governmental accounting?

A

Fund structure

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3
Q

Identify the major categories of funds used by state and local governmental units.

A

Governmental Proprietary Fiduciary

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4
Q

What terms define the manner and timing of transaction recognition in governmental fund accounting?

A

Fund accounting principles are defined by:

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5
Q

What are the objectives of external reporting?

A

Operational accountability Fiscal accountability

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6
Q

What types of external reports meet the accountability objectives of government?

A

Operational accountability Fiscal accountability

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7
Q

Name each governmental fund type.

A

General Fund

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8
Q

What are the fund accounting principles applicable to governmental funds?

A

Measurement Focus Basis of Accounting

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9
Q

What specialized accounting practices are followed by the governmental funds?

A

Budgetary Accounting Accounting Accounting

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10
Q

Name and define the five classifications of fund balances used by governmental fund types.

A

Nonspendable Restricted Commited: Assigned: Unassigned:

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11
Q

Name each proprietary fund type.

A

Internal Service Funds

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12
Q

What are the fund accounting principles applicable to proprietary funds?

A

Measurement Focus Basis of Accounting

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13
Q

Name each fiduciary fund type.

A

Pension (and other employee benefit) Trust Funds
Agency Funds
Trust Funds
Trust Funds

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14
Q

What are the fund accounting principles applicable to fiduciary funds?

A

Measurement Focus Basis of Accounting

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15
Q

Distinguish between alternative measurement focuses.

A

Current Financial Resources

Economic Resources

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16
Q

Define modified accrual and list the funds that use it as a basis of accounting.

A

Modified accrual:

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17
Q

What do the terms “measurable” and “available” mean in the context of the modified accrual basis of revenue accounting?

A

Measurable means reasonably estimable or of known determined amount.
Available means collectible within (generally) 60 days of year-end.

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18
Q

When are revenues recorded in governmental funds?

A

Governmental funds record revenues then measurable and available.

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19
Q

Define the different classifications of expenditures.

A

Expenditure classifications include:

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20
Q

What is the journal entry to record the annual budget?

A

Actual expenditures have a natural debit balance.

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21
Q

Define encumbrance and give the journal entry to recognize a purchase order on supplies.

A

Encumbrance: A commitment related to an unperformed contract for goods or services (generally an open purchase order.)

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22
Q

What journal entries are made to record the liabilities incurred associated with previously encumbered funds?

A

Expenditure of previously encumbered funds results in the following entries:

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23
Q

When are budgetary, actual, or encumbrance entries combined?

A

NEVER

24
Q

What are the closing budgetary, actual, or encumbrance journal entries?

A

At the beginning of the next year, the above encumbrance entry is reversed.

25
Q

Journal entry to recognize supplies remaining at year-end.

A

Purchase method: Consumption method:

26
Q

List examples of transaction that qualify for treatment as deferred outflows of resources (reported after assets) or deferred inflows of resources (reported after liabilities).

A

Changes in fair value of hedging derivative instruments.

27
Q

What is the purpose of the general fund?

A

The general fund is created at the beginning of the governmental unit and it exists throughout the life of that unit. The general fund accounts for the general activities of a governmental unit that are not accounted for by any other fund.

28
Q

What are the typical revenue sources of the general fund?

A

Taxes (property taxes)

29
Q

What is the purpose of the special revenue fund?

A

Special revenue funds account for revenues and expenditures that are restricted or committed for specific purposes. The life of a special revenue fund may be limited or unlimited.

30
Q

What are the typical revenue sources of a special revenue fund?

A

Intergovernmental revenues (e.g., sales taxes or gasoline taxed restricted for use)

31
Q

What is the purpose of the debt service fund?

A

The debt service fund is created to account for the accumulation of resticted, committed, or assigned resources (cash and investments) for the payment of currently due interest and principal on long-term general obligation debt.

32
Q

What are the typical components of revenue and other financing source classifications for debt service funds?

A

Revenues

Other financing sources

33
Q

What is the purpose of the capital project find?

A

Capital projects funds are established to account for resources restricted, committed, or assigned for the construction or purchase of leasing of significant fixed assets used by the governmental (GRSPP) funds.

34
Q

What are typical components of revenue and other financing source classifications for capital project funds?

A

Revenues

Other financing sources

35
Q

What is the purpose of the permanent fund?

A

Permanent funds are used to report resources that are legally restricted to the extent that only earnings and not principal may be used for the purposes that support the reporting government’s programs.

36
Q

What are the required fund financial statements for the individual governmental fund types?

A

GRSPP Funds require:

37
Q

What is the basic structure of the balance sheet for the governmental funds?

A

Assets = Liabilities + Fund balance

38
Q

What is the basic structure of the statement of revenues, expenditures and changes in fund balances for the governmental funds?

A

Revenues

39
Q

What is the purpose of the internal service fund?

A

Internal service funds are established to finance and account for services and supplies provided exclusively to other departments within a governmental unit or to other governmental units, typically on a cost-reimbursement basis.

40
Q

What are typical revenue sources for internal service funds?

A

Operating Revenues Nonoperating Revenues

41
Q

What is the purpose of the enterprise fund?

A

Enterprise funds are used for operations that are financed and operated in a manner similar to private business enterprises. Activities should be reported in enterprise funds if:

42
Q

What are typical revenue sources for enterprise funds?

A

Operating Revenues Nonoperating Revenues

43
Q

What are the required fund financial statements for the individual proprietary fund types?

A

SE funds require:

44
Q

What are the alternative structure of the statement of net position for proprietary funds?

A

Alternative Structures

45
Q

What is the basic structure of the statement of revenues, expenses and changes sin net position for the proprietary funds?

A

Operating Revenues

46
Q

What is the basic structure of the statement of cash flows for the proprietary funds?

A

Cash flows from Cash flows from Cash flows from Cash flows from

47
Q

What is the purpose of the pension trust fund?

A

Pension (and other employee benefit) trust funds account for government-sponsored defined benefit and defined contribution plans and other employee benefits, such as postretirement health care benefits.

48
Q

What are the unique note disclosures and required supplemental information reporting associated with pension funds?

A

Note Disclosures Required Supplementary Information

49
Q

What is the purpose of the agency trust fund?

A

An agency fund collects cash to be held temporarily got an authorized recipient to whom it later will be disbursed. This recipient may be another fund or some individual or fund even government outside of the reporting government.

50
Q

What is unique about agency fund revenues and expenses?

A

Agency funds do not report revenues and expense, only assets and liabilities.

51
Q

What is the purpose of the private purpose trust fund?

A

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 individual, private organization, and other governments.

52
Q

What is the purpose of the investment trust fund?

A

Investment trust funds account for external investment pools sponsored by a governmental entity.

53
Q

What is the required fund financial statements for individual fiduciary fund types?

A

Most PAPI funds require:

54
Q

What is the basic structure of the statement of fiduciary net position for the fiduciary funds?

A

Net Position

55
Q

What is the basic structure of the statement of changes in fiduciary net position for the fiduciary funds?

A

Additions

Becker Financial (10 decks)

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