Government Accounting Flashcards
Concept statements form GASB are NOT authoritative guidance. TF
True
What are the 5 GASB concept statements?
- Objectives of financial reporting
- Services efforts and accomplishments
- Financial Reporting
- Elements of financial reports
- Service efforts and accomplishments (amended)
Accountability and ______ _____ are the two major objectives of financial reporting.
Inter-period equity, also not that inter-period equity is a basic component of accountability in general
What are the characteristics of financial reporting for governments?
TRUCCR
Timeliness, relevance, understandability, comparability, consistency, and reliability.
All service efforts and accomplishment information given should meet _____.
The characteristics for financial reporting guidelines (TRUCCR).
“Other supplemental information” is not required for governments to report. TF
True
What are the 5 elements of government Statements of Financial Position (balance sheet)?
- Assets
- Liabilities
- Deferred Outflow of Resources
- Deferred Inflow of Resources
- Net position
____ measures indicate the accomplishments that occur because of the services provided.
Outcome
Budgets are required to be prepared on the GAAP basis. TF
False
What are the 3 types of government funds?
- Government funds
- Enterprise funds
- Fiduciary funds
The 5 funds types within government funds are?
- General
- Special Revenue
- Debt Service
- Capital Projects
- Permanent
(consonants in DRIP CEG)
The two types of proprietary funds are?
- Enterprise
- Internal Service
(vowels in DRIP CEG)
The 4 types of fiduciary funds are?
- Pension Trust
- Investment Trust
- Private Purpose Trust
- Agency Trust
(PIPPA)
A major characteristic of an enterprise fund are _____ to users.
Charges
Flow of ______ ______ financial resources and flow of _____ resources are the two types of measurement focuses in government accounting.
CURRENT expendable (modified accrual), economic (accrual)
The two bases of accounting are:
Accrual and modified accrual
Modified accrual basis generally deals with _____ assets and liabilities.
Current
Modified accrual accounting is ONLY used in the government fund accounts. TF
True (the consonants in DRIP CEG)
Under modified accrual revenues are recognized when they become _____ and ______.
Measurable and available
“Legally available” means collectable within __ days after year end.
60
Under the modified accrual basis, when revenues are measurable but not legally available they are classified as ____ _____.
deferred inflows
Under modified accrual, expenditures are recognized when they are ____.
Incurred
“Expenditures” are unique to funds using the ____ basis of accounting.
Modified accrual
Repayment of principal on LT debt, payments to vendors, and equipment purchases are all considered expenditures. TF
True
Proprietary fund accounting is focused on ____ _____.
Income determination
The purpose for budgetary accounting is planning and control. TF
True
What are the 3 budgetary accounts?
- Appropriations
- Estimated Revenues
- Estimated other financing sources and uses
Record a basic balanced budget entry.
dr. Estimated Revenues
cr. Appropriations
Record a surplus budget entry.
dr. Est Revs
Appropriations
cr. Fund Balance
At year end, budgetary accounts are reversed and _______.
closed
In budgetary accounting, “transfers in from other funds” are considered as estimated revenues. TF
False, estimated other financing
In budgetary accounting, “intergovernmental transfers” are considered as estimated revenues. TF
True
In budgetary accounting, “licenses and permits” are considered as other financing sources and uses. TF
False, estimated revenues
When purchase orders are issued, how are expenditures recorded?
They aren’t. An encumbrance account is debited.
The budgetary fund balance account represents the difference between estimated revenues and the total of _____ + _____ to the debt service fund.
appropriations, estimated transfers
Encumbrances outstanding at the end of the year are reported as..?
Assigned or committed fund balance
Encumbrance accounting is only used int the governmental fund accounts. TF
True
Deferred outflows and inflows occur in the ______ ____ but relate to ______ ____.
Current year, future periods
GASB limits the term deferred to deferred _____ and ___ of resources.
Inflows and outflows
What are the 5 types of fund balances?
NU-CAR
- Non spendable (inventory, equip, etc)
- Unassigned
- Committed (specific purpose, formal action, highest level)
- Assigned (specific purpose, intent)
- Restricted (creditors, laws, grantors)
Special revenue accounts cannot report a positive amount of what type of fund balance?
Unassigned
Significant outstanding encumbrances should be disclosed in the notes rather than reported in a fund balance. TF
True
What are the 3 sections of the CAFR?
- Introductory
- Financial
- Statistical
In the CAFR, the minimum financial reporting requirements include a section of ______, basic financial statements, and RSI.
MD and A
Deprecation is optional for art collections. TF
True
The statment of activities is designed primarily to provide information to asses (fiscal or operational) accountability?
Operational
The independent auditors opinion is part of the introductory portion of the CAFR. TF
False, financial portion
Elected governing bodies, separate legal entity status, and fiscal independence, are all traits of the…..?
primary government
Financial dependence, and financially accountable to the primary government is descriptive of a….?
component unit
If the primary government appoints a voting majority of the units governing bodies and has the ability to impose its will and influence its finances, the unit is a component unit. TF
True
When the activities of the component unit are very similar to the primary government a ______ presentation is used. If not a _____ presentation is used.
blended, discrete
2 factors must be met in order to consider the blended presentation. What are they?
1, The component entity must be dependent (influence on elected board)
2. The component entity must be fiscally dependent (budgeting approval by higher)
*Both have to be met
Where is discrete component unit information presented?
In the Gov Wide statements only
The general fund is always a major fund. TF
True
How are non major funds reported?
Aggregated and within a single column on the balance sheet and operating statemtent
Fiduciary funds are always major funds. TF
False, they are NEVER major funds
What is the 10/5 rule for major fund determination?
10% of the total assets or liabilities for its fund category, and 5% of the corresponding total for all gov an enterprise funds combined.
If the principal must remain intact, what type of gov fund is used?
Permanent, if not, special revenue
Proprietary funds use _____ basis accounting and are accounted for like a ________.
Accrual, business
Internal service funds are reported in the basic financial statements. TF
False, in the supplemental section
“Billings to departments” is a common revenue account for which type of fund?
Proprietary - Internal Service
An enterprise fund aims to cover all of its costs while providing goods and services to the general public. Some examples would be…
subway systems, community swimming pools, utilities, airports, toll roads
The key distinction between enterprise and internal service funds is….
the primary user of the good or service
Enterprise funds are reported in the supplemental section. TF
False, they are reported in the basic financial statements are are subject to the major/non-major fund rules.
An enterprise fund is required when…
- Activity is financed by debt securely SOLELY by a pledge of the net revs of the activity
- Laws and regs require that the costs to provide the services be provided by fees and charges
- Pricing policies are designed to generate revs to cover its costs
Proprietary funds use expenses or expenditures?
Expenses
Proprietary fund statement of cash flows are shown through the direct or indirect method?
Direct
A government entity considers cash equivalents as cash if they MATURE within 3 months of the statement date. TF
True
What are the two broad types of pension trust funds?
Single and Multiple employer plans
Instead of revenues and expenses, fiduciary funds mainly use…..?
Additions and deductions
The purpose of an investment trust fund is to account for the portion of the fund that is held for governments ______ than the _______ entity.
other, reporting
Agency funds are for assets held briefly and then ____.
Distributed to other parties.
Can investments amongst funds be pooled into an investment trust fund?
Yes, but gains and losses but be allocated equitably amongst the funds
Government funds view contributions to pension trust funds as _______.
Expenditures
Contributions to pension trust funds are viewed as _____.
Revenues additons
Agency funds produce a statement of cash flows. TF
False
Only outside other government entity and unrealized GL are reported as the balance in the Investment Trust Fund. TF
True
Government entities are required to submit statements of cash flows. TF
False
Capital projects funds are the only funds that record depreciation? TF
False, internal service funds
Grants and subsidies are recorded in the _____ section of the statement of cash flows?
non capital financing
