Government Accounting Flashcards
What does BAE stand for and what does each do?
Budget - Manage Spend
Activity - Understand the flow of current resources
Encumbrance - Monitor spending on purchase orders
Which funds use modified accrual accounting and BAE?
The governmental funds (GRaSPP)
What rolls up under GRaSPP?
General fund
Revenue (Special) fund
and
Service (Debt) fund
Projects (Capital) fund
Permanent fund
What are governmental sources of revenue?
Taxes on income, Taxes on property, Fines/penalties, Debt, Transfers
What is non-exchange revenue with governmental funds?
Give or receive value without an equal return
Derived - transactions
Imposed - imposed on non-exchange transactions
What is the revenue recognition based upon for non-exchange revenue?
Time requirements - within 60 days
Eligibility
Which governmental funds use full accrual accounting?
SE-CIPPOE, Proprietary and Fiduciary Funds
What two GRaSPP funds that do not record encumberances
Debt Service Fund
Permanent Fund
What makes up Proprietary Funds, what financial statements are required and what basis of accounting do they use?
Its the “SE”, CF, IS and BS, full accrual
Internal Service (lots of “Central” funds)
Enterprise (lots of “Public” funds)
What are the 3 general characteristics of
Fiduciary Funds?
Controlled by the government
Not created by the government (own source)
Not subject to administrative involvement by the government
What are the 4 Fiduciary Funds, what financial statements are required and what basis of accounting do they use?
CIP POE, IS, BS, NO CF - Full Accrual
Custodial Fund
Investment Trust Fund
Private Purpose Trust Fund
Pension or Other Employee Fund
For modified accrual fund accounting, how do you recognize revenue?
Collections during the period plus the expected collections 60 days after. Estimated uncollectible would not be considered.
For a general fund, how would proceeds from debt issue and inter-fund transfers for debt service (or just plain inter-fund transfers) be classified?
Other financing sources, not revenue.
What is the main difference between an exchange and non-exchange transaction?
An exchange transaction has each party receiving and sacrificing something of approx equal value. A non-reciprocal gives value without receiving.
What are derived tax revenues?
Taxes imposed on exchange transactions such as sales taxes and income taxes.
What are imposed, non-exchange tax revenues?
Taxes imposed on non-exchange transactions like fines or property taxes (wealth) where there is not a like for like exchange.
The expenditure salaries is what type of classification: function, program, object, activity
Object
What is the governmental equivalent of an operating lease?
short term lease
If a city leases equipment and retains ownership at the end of the lease what would it be classified as?
It would be a contract that transfers ownership and the equivalent of a finance lease in commercial accounting.
How would a long term lease without a transfer of ownership be booked for a proprietary fund?
An ROU Asset and Liab at FV
How would a long term lease without a transfer of ownership be booked for a governmental fund?
Capital outlay expenditure and other financing sources
When issuing a purchase order, what is the credit side of the entry?
Budgetary Control
What is reciprocal interfund transfers?
When providing a service and using the services.
Non-reciprocal transfers are what?
When there is not any repayment for services rendered. No trade or deal.
The only fund that should show a positive amount in its unassigned fund balance would be:
General Fund
What is the debit side of the entry for purchase orders?
Encumbrances
Encumbrances appear in which funds?
Governmental = GRaSPP
Where do you see “Appropriations”?
Appropriations is a budgetary account and represents the approved spending.
When would a transfer between funds give rise to operating expenditures or revenues?
Where a fund acquires a good or service that could have been purchased from an unrelated business.
Interfund transfers received by a governmental fund should be reported as:
“Other financing source”
If a utility raises rates to fund capital improvements how would the inflows from those raised rates be accounted for?
Deferred inflows until the improvements are made
What are the 5 constraints fund balances are categorized as?
Nonspendable
Restricted
Committed
Assigned
Unassigned
How do you calculate a City’s fund balance and unassigned fund balance?
Assets - Liabilities
A-L-Open Purchase Orders
Which funds report “Net Position” and which funds report “Fund Balance” as their equity in financial statements?
Proprietary, Governmental
How would a negative fund balance be displayed in a government fund?
Negative fund balance - unassigned
How are internal designations of fund balances categorized based on the 5 categories?
Internal designations are classified as unrestricted
What funds would a debt service fund support the resources for?
General debt under governmental funds. It would not support fiduciary or proprietary funds as they record their own long term liabilities.
For Government Funds (GRaSPP) where are on the statement of revenues, expenditures and changes in fund balances does “proceeds from sale of capital assets” fall?
“Other Financing Sources” below revenues and expenditures.
What is an extraordinary item?
Both unusual and infrequent and would be reported separately from expenditures.
When user charges are the main support for goods and services, what type of fund would be used?
An Enterprise Fund
What is included in a proprietary funds net investment in capital assets?
Capital assets - accumulated depreciation - any outstanding debt incurred to acquire/construct/improve
What are the 3 instances when an Enterprise fund is used?
Fees support debt financed by pledged fees
laws and regulations require costs be defrayed by fees
Pricing policies require recovery of costs with fees
When an enterprise fund has shared revenues received from another government, how are they recorded?
Non-operating revenues
When a government is not obligated in any manner when related to a debt service transaction, which fund should the government use instead of debt service?
Custodial Fund, which is a Fiduciary Fund
What are the required financial statements for fiduciary funds?
Statement of Fiduciary Net Position (Balance Sheet)
Statement of Changes in Fiduciary net Position (Income Statement)
what is the difference between a defined benefit plan and
If you are dealing with Escheat/abandoned properties you are most likely dealing with what type of fund?
Private Purpose Fund, Fiduciary
Government wide financial statements focus on what accountability?
Operational
What are the GASB 34 financial report sections?
Introduction
Basic Financials and supplementary info
Statistical info
Which activities are shown in business-type activities under governmental-wide financial statements?
Enterprise Funds
GRaSPP and the “S” (Internal Service) in SE are included in the governmental activities.
When analyzing blended vs. discrete presentation for government what are the 3 circumstances that with any of them would put them in blended?
Is the primary board the same as the component?
Does the component serve the primary govt exclusively?
Does the component not qualify as a legal entity?
What are the basic financial statements and required supplementary info according to GASB 34?
Basic: Government-wide financials
Fund financials
Notes to the financials
RSI: MD&A and supporting schedules (combined financial statements by fund type and budget vs. actual)
“The Integrated Approach” is:
Joint presentation of govt-wide and fund financials with reconciliation
What are the 3 sections of the govt annual comp financial report?
Introduction
Financial
Statistical
What are the the items included in the Introductory Section of the govt annual comp financial report?
letter of transmittal
Org chart
principal officers
How many years are covered in the statistical section of the govt annual comp financial report?
10
What is the SeLF test for a primary government?
It must be:
Separately Elected
Legally Separate
Fiscally independent
To be considered a primary and not a component
Component units of a primary government can be reported as either of two:
Discrete or Blended
Government-wide financials are presented using the ____ measurement focus.
Economic resources
What is the difference in treatment between donated property and property seized or acquired through forfeiture?
Donated property is capitalized at FV and the other is capitalized at lower of cost of market.
What does SOC stand for in relation to government wide program revenue?
S - Services Charges
O - Operating Grants
C - Capital Grants
How do you calculate which funds would be considered major for the fund financial statements?
10% of category AND 5% of total Govt+Enterprise AND General Fund
Fiduciary funds must present their statement of financial position in a ___ format.
Net Position
Governmental funds must present their statement of financial position in a ___ format.
Balance Sheet
What does the CPAS RIDES pneumonic mean?
Capital outlay
Principal payments
Asset disposals
Sources of financing
Revenue - sales tax
Interest expense
Depreciation Expense
Service fund
How do you reconcile govt funds to govt-wide asset disposals?
The book value needs to be subtracted from the govt fund amount to reconcile to govt wide.
What are the required portions of the MD&A for govt?
analysis of the govt financial activities/initiatives and discrete component units
3 Years of condensed financial statement information
Analysis and description of overall financial position and results of operatoins
Analysis of balances and transactions of individual funds
Analysis of delta from original and final budget
Significant assumptions and implications of use of modified
What are the GASB 34 requirements for budget schedules?
Prepared for general and each major special revenue fund. comparing original, final, actual inflows and outflows and balances. NOT govt-wide financials.
Does the MD&A come before or after the the basic financial statements?
Before
Budget comparison schedules can be found in either:
RSI or in the Basic Financial Statements
GASB 34 Financial statements include:
Govt-wide accrual based financial statements
Fund financial statements
Notes to the financial statements
Required Supplementary Info:
MD&A
Original Budget/Amended Budget v Actual
For government expenditures classification, what is “Character” associated with?
Timing/When
For government expenditures classification, what is “Function” associated with?
Purpose
For government expenditures classification, what is “Object” associated with?
GL Classification
When doing the journals for a governmental budget, expenditures are recorded to what account?
“Appropriations”
A purchase order is booked to what account?
“Encumbrance”
Which funds are excluded from government-wide presentations?
Fiduciary (CIPPOE) are presented as fund financial statements only
Where are road and bridge assets reported?
RSI
Internal Service fund financial statements are reported where in the govt-wide financial statements?
Consolidated with governmental activitities
The comparison of budgets to actual activity are included where?
RSI
Where are budget variances shown in the govt-wide financials?
Optional Supplementary Information
Analysis of significant budget variances are included in which part of the govt-wide financials?
MD&A
Information on non-major fund financials are included where in the govt-wide financials?
Optional Supplementary Information
