Government Accouting Flashcards
Property Taxes
Receivable within 60 days
deferred taxes after the 60 days
allowance for not recievable
Exchange and non-exchange transactions
Exchange transactions are those transactions where equal amounts are given or received. Non-Exchange transaction Derived Imposed Govt mandated Voluntary Grant
11 Types of funds
Govermental Funds:( Modified Accrual) General Fund Capital Projects Fund Special Reserve Fund Debt Service Fund Permanent Fund Propritory Fund Internal Service Fund Enterprise Fund Fiduciary Funds Pension trust Investment trust Private purpose trust Agency Trust
Debt Service Fund
IS the money we accumulate to pay off interest of principles and interest for bonds
Permenant fund
Non expendable fund.moeyresricted and may not be fund
Propritory funds
Accrual- Utilities, Bus service train service
Government Obligated
Government Not Obligated
Govt Obligated- Capitol projects or debt service fund
Govt not obligated- Agency fund
Agency
No-fund balance
Financial statements
MDA Government wide F/S(Acrual Basis) Statement of net position Statement of Activities Fund FS
Govt wide funds
No fund statements
Financial statements
mdma Govt Wide=5=1 statement of net position-B/S Governmental activities Business type activities-1 Total=total of all( whats not on these statements? Fiduciary Funds) Componant unit statement of activities=Income statement(Govt wide=Accrual) Program Revenues General Revenues
fund catogeries
Non-spendable Restricted Assigned Committed Unassigned
Component Unit
Discrete Presentation: A separate elected Governing board, Legally separate, physically independent
Blend: Blendwithotherfundsifthe activitiescannot be separated
Diff between appropriation and encumbrance
Appropriation is authorized to spend and encumbrance is expected to spend
Purchase method and consumption method
The purchase of inventory is recorded as an immediate expenditure. If the consumption method is used inventory would be debited as goods are purchased.
Explain Modified approach
If the Government are able to prove the maintenance of the assets can give them indefinite life they can omit depreciation
extra money from bonds
transfer to debt service funds
what is the measurement focus in governmental funds
Economic resource measurement focus
General capital assets
General capital assets are all capital assets not reported in the proprietary funds and the fiduciary funds. They are reported, at historical cost, only in the governmental activities column of the government-wide statement of net assets.
Bond anticipation notes
Bond anticipation notes of governmental funds are reported solely as general long-term liabilities if (1) all legal steps have been taken to refinance the bond anticipation notes, and (2) the intent is supported by an ability to consummate the refinancing on a long-term basis.
IN the government wide financial statement how is purchases recorded
Your answer is correct.
In the governmental fund financial statements, whether an expenditure was for services consumed immediately or for a general capital asset is irrelevant. The focus of governmental-fund reporting is on the disposition of current period resources. Thus, such outlays are expenditures, not expenses. In the government-wide financial statements, all economic resources, both current and long-term, are reported. The services consumed in the current period are debited to an expense, and the long-lived asset is capitalized.
Bond premium
is not amortized in debt funds
pension funds
actual amount
The CAFR include
The CAFR should includea.management’s discussion and analysis (MD&A),
b. the basic financial statements,
c. required supplementary information (RSI) other than MD&A,
d. combining and individual fund statements,
e. schedules,
f. narrative explanations, and
g. a statistical section.
2.The basic financial statements include government-wide financial statements, fund financial statements, and the notes to the financial statements.
Componenent units
Direct presentation in a separate coloum if:
A separate elected Governing board
Legally separate
Fiscally independent-authority to:
Determine its budget,levy taxes w/o approval,issue bond debt w/o approval.
Blend: with other units if operations cannot be separated and it will be misleading to present them separately.
The required govt wide financial statements
Your answer is incorrect.
The statement of net position reports all financial and capital resources. The statement of activities presents operations in a format that displays net (expense) revenue for each function, thereby reporting the relative financial burden to the taxpayers for that function.
Are the primary fund and component fund blend
Your answer is incorrect.
The funds of a component unit are blended with those of the primary government in the fund statements and combining statements. However, the primary government’s general fund should be the only general fund reported. Thus, the general fund of the blended component unit should be reported as a special revenue fund of the primary government.
Depreciation of capital assets
Your answer is incorrect.
The funds of a component unit are blended with those of the primary government in the fund statements and combining statements. However, the primary government’s general fund should be the only general fund reported. Thus, the general fund of the blended component unit should be reported as a special revenue fund of the primary government.
capitalproject fund
A capital projects fund accounts for financial resources, including general obligation bond proceeds, to be used for the acquisition or construction of major capital facilities other than those financed either by proprietary funds or in trust funds for individuals, private organizations, or other governments.
False.
propritory fund
A statement of revenues, expenses, and changes in fund net position is required for proprietary funds. Operating and nonoperating revenues and expenses should be distinguished, with separate subtotals for operating revenues, operating expenses, and operating income.
enterprise fund
An activity should be reported as an enterprise fund if any of these three criteria are met:1.It is financed with debt, and the only security is a pledge of the activity’s net revenues from fees and charges;
- Its costs (including capital costs) of providing services are legally required to be recovered from fees and charges, not taxes or similar revenues; or
- Its pricing policies set fees and charges to recover its costs (including capital costs).False.
The role of the government is that of a fiduciary for resources held in trust funds and agency funds.
A trust fund differs from an agency fund because the trust agreement determines how long resources are held and the degree of management involvement. The governmental entity serves as a fiduciary of a trust. The role of the government is purely custodial for resources held in an agency fund.
A single investment trust fund is used to report all of a sponsoring government’s external investment pools.
An investment trust fund is used by a sponsoring government to report the external portion of an external investment pool (the portion belonging to legally separate entities not part of the sponsor’s reporting entity). Moreover, the sponsor should report each external pool as a separate fund. The statements required are similar to those for pension trust funds.
An agency fund accounts for taxes collected for other governments.
Your answer is incorrect.
Tax agency funds are used when a governmental entity is the collection agent of taxes for disbursement to other governmental units, e.g., school districts, city governments, and special taxing districts. A governmental unit acting as a collection agent for another government usually subtracts administrative fees for the collection services. The agency fund should recognize a liability owed to the general fund for the amount of the administrative fees
sales tax collected
are agency funds
Major fund
General fund is always major fund
How to determine whether major fund criteria are met
to determine whether major fund criteria are met, deffered outflows of resources are added to assets and deffered inflows of resources are added to liablities
Major fund reporting does not apply to which funds?
Internal service funds
operating cash flow
Student loans and low mortgage interest loans
Estimated Revenues
Revenues that are expected to be spend in the period
Estimated other financial sources
Expected proceeds from issuance of long term debts and operating
Appropriations
Expenditures that are expected to occur in that period
Estimated other financial uses
Expecting transfters to other governmental departments
exchange transactions
Goods/services/cash of equal value are exchanged
Non exchange transactions
The transaction in which GOV/ receives gives/ w/o directly receiving/giving in equal value of exchange
Derived tax revenues
Taxes self assessed on exchange transactions- Sales tax, Income tax, motor fuel tax etc.,
Imposed non exchange
Taxes not derived from Transactions. Property taxes,fines,forfeits, special assesments.
Government mandated non-exchange transactions
One level of Government provide funds to another level of Government to be used for a specific purpose.
Voluntary Non-exchange transaction
Transaction entered willingly by parties
Five sections to General purpose financial statements
Management discussion and analysis Government wide financial statements Fund financial statements Notes to financial statements Required supplementary information
Management Discussion and analysis
Comparision with prior year Overall financial statements Individual fund statements Variance analysis Long term activities
Government wide financial statements
Governement wide financial statements are prepared with Economic measurement focus and accrual basis of accounting. These statements are designed to provide information about operational accountability as how effective these organizations are in utilizing its resources,
2 a- statement of net position, which includes net investment in capital assets, restricted net position unrestricted net position.
There are four columns in statement of net position:
Governmental activities,business type activities, Total and component units.
Governmental activities are are those that are primarily financed through taxes and other non-exchange transactions. The presentation uses accrual accounting even though the governemnts are modified accrual accouting.
Business trype activitis- User charges. Only enterprise funds. debt service fund is shown here.
total
component units
fidicuriary funds not shown here
Accounting for infrastructure of assets
preferred method is to account assets at historical cost and depreciate it
What is modified approach
Permits government to omit depreciation on infrastructure assets if they can demonstrate if the regular cost to maintain them to give a indefinite life. This is called as modified approach.
Two schedules that are required in supplementary information
A schedule reflecting condition of Governments infrastructure and a schedule comparing needed and actual expenditure of maintaining the infrastructure.
2B- Statement of activities
Full accrual,Interfund transactions are not eliminated . Revenues are also reported on accrual basis and may be exchange revenues or non-exchange revenues.
Expenses are reported y functions and revenues are reported on accrual basis.
Program revenue includes, charges for services, operating grants and contributions and capital grants and contributions.
Revenue is broken between Governmental activities, business activities, and component units the same as in the net position. General revenues are deducted from net revenues.
General revenues include all taxes levied by reporting government and other non-exchange revenues not retriscted by particular program. After that separate addtions or deductions are made for special items, extrodinary items and other non exchange revenues restricted by program.
3- Fund financial statements
4 sets of financial statements-Governmental Fund Financial statements( Modified accrual basis, Current financial resources approach, Current assets and liablitities only no fixed assets or L/T debt.)
Governmental funds- General fund, special revenue fund, capital projects fund, debt service fund and permenant funds. Balance sheet, statements of revenues and expenditure and changes in fund balance.
The reconciliation of the Governmental fund balance to the Governemnt wide statement of net position includes adjustments of fixed assets Issuance of long term debt Debt service payment Reveune recognition accrual of revuene and expenses .
5 fund balance classifications
Non spendable, Restricted, commited assigned and unassigned
Propritory fund financial statement
Accrual basis, current economic resources approach,Current and non-current assets and liabilities.
Statement of net position, Statement of revenue changes in net position, Statement of cash flows.
Operating, Investing, Non capital financing capital and releated financing.
Fiduciary Fund Statement
Which comprises of pension trust, investment trust, Private trust agency trust.
A statement of fiduciary position and statement of changes in fiduciary position. None of these funds are included inGovernment wide financial statements
Four different cash transfers
Operating transfers
quasi external
reimbursements
Loans
Revenue and sources
grants- Reveue taxes fines etc.,-revenue transfer-source Bonds-Source Bond premium-Source
Quasi external
If one fund pays money to other fund for services it is called as quasi external
If revenue exceeds appropriation
Credit budgetary control
Which of the following fund types should account for capital assets in a manner similar to a “for-profit” organization?
enterprise fund
Purchase of fixed assets
Purchase of fixed assets is an example of an expenditure and reduces the excess of revenues over expenditures.
Transfers between funds are recorded as “other financing sources and uses.”
Proceeds from the sale of capital assets is an example of a special item. Special items are shown on the statement after the excess of revenue over expenditures.
Goodwill
Goodwill arising from a business combination must be capitalized. However, amortization of goodwill is prohibited. Moreover, the cost of developing, maintaining, or restoring intangible assets (including goodwill) that (1) are not specifically identifiable, (2) have indeterminate useful lives, or (3) are inherent in a continuing business and related to an entity as a whole are expensed as incurred.
The expenditure element “salaries and wages” is an example of which type of classification?
In governmental accounting, expenditures should be recorded in a multiple classification scheme—typically by (1) fund, (2) function or program, (3) organizational unit (e.g., department), (4) activity, (5) character, and (6) object (“object of expenditure”). Object refers to “the type[s] of items purchased or services obtained” (GASB 1800.137) which expenditures are for—that is, “what” is acquired. Governments pay salaries and wages in order to acquire “personal services
Powell City purchased a piece of equipment to be used by a department financed by the general fund. How should Powell report the acquisition in the general fund?
The acquisition of capital assets with general fund financial resources should be recorded as a general fund expenditure. The capital asset itself is not recorded in the general fund (or any other governmental fund). Because the general fund uses the current financial resources measurement focus, long-lived assets are not recorded or capitalized. Because the general fund recognizes expenditures when a fund liability occurs, depreciation is not recorded.
issuance of purchase orders
Choice “b” is correct. The issuance of purchase orders or the signing of contracts represents a commitment to expend resources. Such a commitment is recorded as an encumbrance. The entry to record the issuance of the purchase orders and contracts is: Encumbrances 850,000 Reserve for encumbrances 850,000
Deffered compensation plan other than propritory should be reported in
pension trust
fund
Identifies which fiscal and accounting entity was affected
function or program
assists in budgeting resources for carrying out for major areas for service activitites or goals
organizational unit
Assists in enchancing managerial control over departments and division and responsibility acccounting
