Fund Financial Statements (F10:M5)

Question 1

which funds must present a statement of cash flows?

Answer 1

proprietary funds

Question 2

what are the seven differences between the statement of cash flows presented by proprietary funds and commercial entities?

Answer 2

1. direct method required
2. reconciliation of OPERATING INCOME (not net income) to net cash provided by operations is required
3. four categories instead of three
   * operating activities
   * noncapital financing activities
   * capital and related financing activities
   * investing activities
4. investing and financing activities reversed
5. interest income is an investing activity
6. interest expense is either capital and related financing or noncapital financing
7. capital asset purchases are reported as financing activities

Question 3

what are some operating activities?

Answer 3

sales/services

payments to suppliers/employees

inter fund reimbursements and exchanges including PAYMENTS IN LIEU OF TAXES

Question 4

what are some investing activities?

Answer 4

inflows and outflows associated with loans to others (including interest income)

inflows and outflows associated with equity transactions

Question 5

what are some capital and related financing activities?

Answer 5

issuing debt associated with capital assets (including interest expense)

capital grants

contribution activity associated with capital assets

activity related to special assessments associated with capital assets

Question 6

what are some non capital financing activities?

Answer 6

issuing debt for noncapital purposes (including interest expense)

grants or subsidies

property taxes (not restricted for capital use)

operating transfers (other than for inter fund services)

Question 7

when doing the reconciliation of operating income to net cash provided by operating activities, what should be excluded?

Answer 7

revolving debt/bonded indebtedness

G/L on disposal of fixed assets

Question 8

how do you determine if a fund is a major fund?

Answer 8

governmental funds are compared with total of all governmental funds

enterprise funds are compared with total of all enterprise funds

> 10% is good, but there is one more step

all governmental funds and all enterprise funds are added. each governmental and enterprise fund is compared with the grand total.

> 5% is good

*a fund is a major fund if it passes both tests

Question 9

when is the general fund treated as a major fund?

Answer 9

always brah!

Question 10

when determining major funds, which figures can be used?

Answer 10

revenues
OR
expenditures/expenses

assets
OR
liabilities