Government Accounting

Question 1

GASB concepts statement #1 lists the which three groups as primary users of financial statements?

Answer 1

CitizenryInvestors and creditorsLegislative and oversight bodies

Question 2

Internal Service Fund definition

Answer 2

Internal Service Funds are established to finance and account for services and commodities furnished by a designated agency of a governmental unit to other departments of the same governmental unit.

Question 3

Capital Projects Fund purpose

Answer 3

Accounts for the purchase or construction of major capital facilities.

Question 4

Encumbrance

Answer 4

Encumbrance are recorded obligations for in performed contracts for goods and services.

Question 5

Modified Accrual Basis definition

Answer 5

Part cash and Part accrualModified Accrual is used by the five governmental funds.

Question 6

Proprietary Funds

Answer 6

Business-type activities run by the government and supported by user charge.

Question 7

Fund Accounting definition

Answer 7

Each fund is a separate accounting entity and all the funds taken together make up the government’s financial reporting system.

Question 8

Current resources management focus (introduced by GASB 34)

Answer 8

Focused on short-term results and is used in areas where the focus is on measuring current financial resources such as cash, investments and receivables and the current claims against them. Theses areas do not report buildings, equipment or long-term debt because they do not gave a direct impact on current financial resources.

Question 9

Government-wide financial statement purpose?

Answer 9

Government-wide financial statements provide an overall entity perspective and include information about the long-term stewardship of governmental resources.

Question 10

Governmental Accounting Standards Board (GASB)

Answer 10

Is the public sector equivalent to the FASB

Question 11

Enterprise Fund definition

Answer 11

The Enterprise Fund is used to account for financing of self-supporting enterprises which render public service.

Question 12

Special Revenue Fund purpose

Answer 12

Special Revenue Funds are used to account for revenues derived from specific taxes or other earmarked revenue sources.

Question 13

In Governmental Accounting, the General Funds accounts for what?

Answer 13

The General Funds account for all revenues and expenditures of a governmental unit which are not accounted for in other funds.

Question 14

Name four types of Fiduciary Funds

Answer 14

Investment Trust FundsPrivate-Purpose Trust FundsPensions Trust Fund AccountsAgency Funds

Question 15

Five types of Governmental Funds

Answer 15

General FundSpecial Revenue FundsCapital Projects FundsDebt Service FundsPermanent Funds

Question 16

Governmental-wide Financial Statement

Answer 16

Will have a longer-term focus because they will report “all revenues and all costs of providing services each year, not just those received or paid in the current year or soon after year-end.”

Question 17

GASB 33 classified all such non-exchange transactions into which fourdistinct classifications?

Answer 17

Derived tax revenuesImposed non-exchange revenuesGovernment-mandated non-exchange transactionsVoluntary non-exchange transactions.

Question 18

Interperiod Equity

Answer 18

Financial resources received by a government during a period should suffice to pay for the devices provided during that period. Moreover, debt should be repaid during the probable period of usefulness of the assets acquired.

Question 19

Is a reconciliation of the fund financial statements required?

Answer 19

A reconciliation of the fund financial statements to the government-wide statements is also required. This reconciliation must be presented at the bottom of the fine statements or in an accompanying schedule.

Question 20

Definition of Government Accounting

Answer 20

Government Accounting is the accounting for state and local government.

Question 21

GASB No.6 effect on the Special Assessment Fund

Answer 21

GASB No. 6 eliminated the Special Assessment Fund for financial reporting purposes and requires that these special assessments are accounted for in the Capital Projects Fund.

Question 22

Why are operating transfers used in governmental accounting?

Answer 22

Operating transfers are often made to provide financing for the broad range of government activities.

Question 23

Under the modified accrual basis, expenditures are generally recognized when?

Answer 23

Expenditures are generally recognized on the accrual basis. The exceptions are interest and long-term debt. Interest and long-term debt payments are not accrued but are recognized when due.

Question 24

Fiduciary Funds

Answer 24

Assets that are held in a trustee capacity for external parties and the funds cannot be used to support the government’s own programs.

Question 25

Governmental Funds

Answer 25

Account for activities primarily designed to serve the public and are generally financed through taxes.

Question 26

Fund-based Financial Statements

Answer 26

Shows restrictions on the planned use of resources or to measure, in the short term, the revenues and expenditures arising from certain activities.

Question 27

GASB Statement 33 purpose

Answer 27

Provides a comprehensive system for recognizing the wide array of revenues applicable to state and local government units.

Question 28

Goal of Governmental Accounting

Answer 28

The goal of making the government accountable to the public is the one goal that has been constant over the years.

Question 29

Fund Based Financial Statement Focus

Answer 29

The focus of government and proprietary fund financial statements is on major funds (but major fund reporting is not required for the internal services funds).

Question 30

Debt Service Fund Function

Answer 30

The function of this fund is to accumulate resources for the payment of principal and interest on general obligation long-term debt.

Question 31

Why are interfund transactions used?

Answer 31

Interfund transactions are used within most government units as a means of directing sufficient resources to all activities and functions.

Question 32

Under the modified accrual basis, revenues are recognized when?

Answer 32

Revenues are recognized by the expendable funds when they are both “measurable and available.”

Question 33

Name the two types of Proprietary Funds

Answer 33

Enterprise Fundsinternal Service Funds

Question 34

Three Major Categories of Fund in Fund Accounting

Answer 34

Governmental FundsProprietary FundsFiduciary Funds

Question 35

Economic Resources Management Focus (Introduced by GASB 34)

Answer 35

Provides an overall entity perspective and provides information about the long-term stewardship of governmental resources. This concept is used in areas that do not focus solely on current financial resources but report all the assets at the disposal of the government as well as the liabilities that must be paid.

Question 36

SGAS 34 requires which two government-wide financial statements?

Answer 36

A Statement of Net AssetsA Statement of Acutivites