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Government acctg Flashcards

1
Q

What types of funds are these?

  1. Pension Trust Funds
  2. Investment trust funds
  3. Private purpose trust funds
  4. Agency trust funds
A

fiduciary funds, keyword is “trust”

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2
Q

Which of the government funds uses the accrual basis of accounting

  1. enterprise
  2. debt service.
  3. capital project
  4. special revenue
A
  1. enterprise, they run business-like services, where the govt provides a service and gets paid by customers.
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3
Q

does the timing of collection of revenues affect revenue recognition in the entity-wide(govt wide) statement of activities?

A

no, revenues are recognized after deducting estimated collectibles, discounts, etc. Therefore, the amount reported for the current year will be the net realizable value of the tax levy for the current year.

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4
Q

the measurement focus of govt fund accounting is on what

A

current financial resources, because acctg in govtal funds typically follows a budget, the assets that can be spent are grouped with the appropriate liabilities.

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5
Q

what are the 5 types of governmental funds

A
  1. general fund
  2. special revenue funds
  3. capital project funds
  4. debt service funds
  5. permanent funds
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6
Q

the accounting equation of governmental funds is

A
  1. current asset -current liabilities=fund balance

2. revenue-expenditures+other financing sources-other financing uses=increase or decrease in fund balance.

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7
Q

what are governmental funds

A

funds that are used to account for financing of general govt functions and activities. also, they are used to account for the acquisition, uses of, and balance of government’s expendable financial resources and related current liabilities (except those accounted for in proprietary funds)

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8
Q

Are governmental funds accounted for on the modified accrual basis?

A

yes

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9
Q

what kind of funds are these?
enterprise funds
internal service funds

A

proprietary funds (business like fund of a state or local government)

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10
Q

would gifts and contributions be considered as operating revenues?

A

no

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11
Q

what are Required supplementary information?

A

within a government;s comprehensive financial report (CAFR), RSI must be included following the notes to the F/S, RSI includes budgetary comparison schedules, information about the modified approach for reporting infrastructure assets, and employee benefit information.

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12
Q

can enterprise fund be included in the combining fund statements of governmental funds?

A

no.

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13
Q

when revenues are received from charges to users for services provided, these revenues are classified as?

program revenue of general revenue

A

program revenue, revenues derived from those who purchase, use, or directly benefit from the goods or services of a program.

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14
Q

how should revenues be recognized on the modified accrual basis,

A

when all eligibility are met and the resources are available

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15
Q

the outstanding encumbrance would be reflected as ?

A

committed or assigned.

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16
Q

how many funds do you need to set up the structure of a newly established city’s accounting system

A

the minimum # of funds consistent with legal requirements and sound financial administration. governmental accounting is only required to have one fund, the general fund. Other funds can be added to meet budgetary and legal requirements.

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17
Q

the paramount objective of govt accounting is

A

accountability

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18
Q

are uncollectible taxes considered as a bad debt expense in a governmental fund?

A

the measurement focus of a govt fund is on expenditures, decreases in resources, rather than expenses

Property taxes receivable–current 600,000
Property tax revenue 575,000
Allowance for uncollectible
property taxes 25,000

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19
Q

he notes contain disclosures related only to required supplementary information in governmental funds-true of false?

A

false.
the extensive list of items a government should address in the notes of its financial statements covers material additional to “required supplementary information.” both notes and RSI are required.

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20
Q

is the stmt of functional expenses required by all non profit organizations?

A

no, this is required for voluntary health and welfare organization.
the stmt of financial position, the stmt of activity, and the stmt of cash flows are required by all non-profit organizations.

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21
Q

IS debt service fund used to account for in connection with a pension or a proprietary fund

A

no, Debt accounted for in a pension trust or a proprietary fund is serviced from that fund and is not general long-term debt.

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22
Q

where should the non current portion of the a capital lease agreement financed by the govt be reported in the financial statements

A

in the govt wide stmt of net position in the govtnl activities column.

reported as long-term liabilites,

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23
Q

the statement of activities of govt wide financial statements is designed to provide information to assess what?

A

operation accountability using all economic resources.

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24
Q

is depreciation on general capital assets, including infrastructure, always required at the entity-wide perspective

A

no, certain infrastructure capital assets are not required to be depreciated under the modified approach.

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25
Q

does cash inflow from investing activities include interests received on long-term investments?

A

yes

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26
Q

pension expense

A

add service cost. subtract expected rate of return on plan assets, add the amortization of prior service cost, and add the interest cost on the pension obligations.

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27
Q

a major exception to the general rule of expenditure accrual of govntal units related to ummatured

A

principal of general long-term debt and interest on general long term debt.

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28
Q

intergovernmental revenue is included as revenue

A

true

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29
Q

program service costs vs supporting costs, is research cost for a non-profit considered a supporting or program cost?

A

supporting

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30
Q

principal is to remain invested forever, but the point of the investment’s income is to benefit the government.,

A

permanent fund

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31
Q

reporting of expenses by all NFP entities,

A

functional classification in the statement of activities of notes to the financial statements.
Financial reporting for a not-for-profit should provide information about the service efforts of the entity. Therefore, the FASB Accounting Standards Codification requires expenses to be reported by functional classification (i.e., program services, management, fundraising, etc.). Only those not-for-profits that are voluntary health and welfare entities must augment the functional classification of expenses that appears in the statement of activities with a natural classification of expenses, displayed in a matrix format, that is shown in a separate document, a statement of functional expenses.

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32
Q

if an NFP has cash for investment, how may Maple pool its investments?

A

may pool all investments, but must allocate realized or unrealized gains and losses considering donor restrictions, board policy, and relevant legislation.

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33
Q

what kind of assets are included in the statement of financial position for a non government NFP organization?

A

unrestricted net assets, temp restricted net assets, and perm restricted net assets.

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34
Q

cost of electricity used is an expenditure regardless of whether the supplies of electricity is part of the the same government or an independent suppliers

A

debit expenditures.

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35
Q

a major exception to the general rule of expenditure accrual for governmental units relates to unmatured are?

A

principal of general long term debt and interest on general long term debt. otherwise, expenditures should be recorded as fund liabilities as incurred or assets as expended.

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36
Q

the letter of transmittal and the statistical section are classified as?

A

other, neither basic statements nor required supplemental information.

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37
Q

Lys City records a compensated absences liability as a general government liability. The salary rate used to calculate the liability should normally be the rate in effect:

A

at the balance sheet date.

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38
Q

which fund would report transfer to other funds as other financing uses

A

general fund

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39
Q

In the preparation of the statement of activities for a nongovernmental not-for-profit entity, all expenses are reported as decreases in which of the following net asset classes?

A

all expenses are reported as the decrease in unrestricted net assets.

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40
Q

three conditions for to make capitalization optional

A

it is to be held for public exhibition and not gain, it is to be protected and preserved, and a policy is in place requiring proceeds from any potential sale to be used to acquire other collection items. As artwork is considered “inexhaustible,” governments are not required to depreciate them.

41
Q

primary govt (three criteria)

A

It has a separately elected governing body.
It is legally separate.
It is fiscally independent of other state and local governments.

42
Q

Pharm, a nongovernmental not-for-profit entity, is preparing its year-end financial statements. Which of the following statements is required?

A

Statement of cash flows.

statement of activities, statement of cash flows, and for voluntary health and welfare entities, a statement of functional expenses.

43
Q

in which of the following funds of a government are interfund transfers reported as “other financing sources or uses”?

A

governmental funds,

44
Q

What is the major difference between an exchange transaction and a nonexchange transaction for governmental units?

A

The relationship between the amount of value given and received

45
Q

nflows of assets from other funds without a requirement for repayment are considered

A

transfers.

46
Q

The statement of activities of the government-wide financial statements is designed primarily to provide information to assess which of the following?

A

Operational accountability

47
Q

Which of the following transactions is an expenditure of a governmental unit’s general fund?

A

Routine employer contributions from the general fund to a pension trust fund

GASB P20.113 requires employer governments to report employer pension contributions as an expenditure from a governmental fund such as the general fund. The other answer choices are examples of nonreciprocal interfund activity and are transfers that should be reported as other financing uses

48
Q

Tott City’s serial bonds are serviced through a debt service fund with cash provided by the general fund. In a debt service fund’s statements, how are cash receipts and cash payments reported?

A

Cash receipts: Operating transfers; Cash payments: Expenditures

A transfer between funds does not carry a stipulation for repayment between the funds and does not meet the definition of revenue. Therefore, any answer with “revenue” would never be correct. The purpose of a debt service fund is to make the required payments on the debt and would be a classic example of an expenditure.

49
Q

Whitestone, a nongovernmental not-for-profit entity, received a contribution in December of Year 1. The donor restricted use of the contribution until March of Year 2. How should Whitestone record the contribution?

A

Report as income in Year 1

50
Q

The expenditure element “salaries and wages” is an example of which type of classification?

A

Object

51
Q

Which of the following should be included in the introductory section of a local government’s comprehensive annual financial report?

A

Letter of transmittal`

52
Q

In order for an entity to be considered a primary government it must meet all three of the following criteria:

A

It has a separately elected governing body.
It is legally separate.
It is fiscally independent of other state and local governments.

53
Q

The expenditure element “salaries and wages” is an example of which type of classification?

A

Object

54
Q

how should a city recognized the acquisition of a new police car in its fund statements of revenues, expenditures and changes in fund balances?

A

as an expenditure, whether it was an expense or a capital purchase.

55
Q

Which of the following fund types of a government reports a statement of net position?

A

Enterprise funds

56
Q

financial categories for NFP organization;s statement of financial positions

A

assets, liabilities, and net assets

57
Q

fiduciary and enterprise funds use accrual basis of accounting? T/F

A

True, eg. pension fund, enterprise and internal service funds

58
Q

According to the FASB Accounting Standards Codification, the financial statements of a not-for-profit entity focus on:

A

the entity as a whole. report the amounts of its total assets, liabilities, and net assets.

59
Q

On the statement of activities for government-wide financial reporting, revenues are all considered general revenues unless they are required to be reported as program revenues. Program revenues reported separately from general revenues consist of

A

GASB 2200.140 states that all revenues are general revenues unless they are required to be reported as program revenues. All taxes, even those levied for a specific purpose, are general revenues. Program revenues consist of charges for services and program-specific grants and contributions.

60
Q

Which of the following are included in a local government’s government-wide financial statements?

A

Statement of net position and statement of activities

61
Q

leased capital assets should be reported in government-wide financial statements as?

A

general capital assets

62
Q

non government not for profit organizations are required to provide which financial statements

A

stmt of financial positions, activities and cash flows,
health and welfare organizations are also required to provide a stmt of functional expenses. which is recommended for all non for profit organizations and most do.

63
Q

GRASPP+MACG

A

General, special Revenue, And debit Service, capital Project and Permanent. modified accrual, current financial focus

Modifried, Accrual Accounting, Current financial resources measurement focus.

64
Q

SE-Papi+space

A

Service, Enterprise, Pension, Agency , Private Purpose, Investment

SE
PAPI
Accrual
Carry fixed assets and LTD
Economic resources measurement focus.
65
Q

NUCAR-categories of fund balance.

A

nonspendable fund balance, restricted fund balance, committed fund balance, assigned fund balance, unassigned fund balance.

66
Q

general fund resources that are limited to use by constraints imposed by law through constitutional or enabling legislation would be classified within fund balance as”

A

restricted

67
Q

the only fund that should show a positive amount in its unassigned fund balance classification would be the

A

general fund.

68
Q

debt service fund is used in connection with general funds only

A

true

69
Q

bonds premiums
bonds discounts and other bond issue costs presentations on the stmt of revenues, expenditures, and changes in fund fund blances,

A

bp, financing source
bd, financing use
other bond issues costs are displayed as debt service expenditures.

70
Q

Depreciation expense is not recorded in any governmental fund since governmental funds account for neither depreciable assets nor expenses

A

(the measurement focus of governmental funds is on expenditures, not expenses).

71
Q

An unrestricted grant received from another government to support enterprise fund operations should be reported as:nonoperating revenues.

A

nonoperating revenues.

72
Q

lottery and hospital both count as enterprise fund

A

true

73
Q

A government-wide statement of net position must include which of the following?

A

A distinction between governmental and business-type activities

74
Q

According to the summary of GASB Concept Statement 1, the primary characteristics of governmental structure are as follows:

A

“(1) The representative form of government and the separation of powers

“(2) The federal system of government and the prevalence of intergovernmental revenues

“(3) The relationship of taxpayers to services received

75
Q

In the government-wide financial statements, what is the correct revenue classification of fines and forfeitures?

A

Charges for services

76
Q

Primary government

A

1 a separately elected governing body.
2 legally separate
3 fiscally dependent of other states

77
Q

In which of the following funds of a government are interfund transfers reported as “other financing sources or uses”?

A

Governmental funds

78
Q

The key to this question is that this is a not-for-profit entity, not a government.

A

The basic financial statements for a not-for-profit entity are statement of financial position (like a balance sheet), statement of activities, statement of cash flows, and for voluntary health and welfare entities, a statement of functional expenses.

79
Q

FASB ASC 270-10-45-1 concluded that interim financial reporting should be viewed primarily in which of the following ways?

A

As reporting for an integral part of an annual period

80
Q

liquidating dividend

A

is not income, but rater an return on investment to owners.

81
Q

IFRS

A

lower of cost or market(net realizable value) sales price-cost to sell

82
Q

general disclosure principle

A

certain information may be presented either on the face of the financial statements or in the notes to the financial statements. Disclosure in the notes to the financial statements is needed only when the information required to be disclosed is not displayed on the face of the financial statements.

83
Q

The presentation of financial statements must be applied within an identifiable framework (AU-C 800.A15–.A18). Normally, the framework is provided by generally accepted accounting principles (GAAP). However, in some circumstances, a different framework may be used. Which of the following would not be indicative of an acceptable framework for the presentation of financial statements?

A

Modifying items on the cash flow statement based on definite criteria

84
Q

Which basis of accounting is required for a city’s government-wide financial statements?

A

revenue and expenses, accrual basis

85
Q

cash flows from operating cash flows

A

cash=changes in liabilities- changes in non-cash assets

86
Q

in government accounting, a fund is

A

both the basic accounting unit and used to assist in ensuring fiscal compliance.

87
Q

government-wide financial statements

A

demonstrates operational efficiency, how effectively the organization has been using its resources, uses accrual accounting

88
Q

fund-based financial statements

A

demonstrates fiscal accountability of the management of each fund; uses modified accrual accounting

89
Q

what is needed to prepare the budgetary comparison schedules for a local government

A

original budget

90
Q

letter of transmittal is included in the intro section of a local government’s comprehensive annual financial report

A

true

91
Q

where is the management’s discussion and analysis required to be presented in the CAFR (comprehensive annual financial report)

A

section 2 financial

intro
financial
statistical

92
Q

the measurement focus and basis of accounting for government wide financial statements

A

economic resources and accrual.

93
Q

internal service fun, the asset and liabilities account balances for this fund that are not eliminated normally should be reported in the GW statement of net position as

A

governmental activities.

94
Q

discrete presentation

A

component unit for which the primary government are financially accountable, is reported in separate column on the gw statement of activities.

95
Q

charges for services would be reported as program revenues on a local government GW statement of activities

A

true

96
Q

internal service fund records depreciation?

A

true

97
Q

interim reporting uses the same accounting principles as GAAP

A

true

98
Q

Greenburg’s finance staff is preparing the statement of activities by checking classification of all expenses. The staff has been told that governments should report all expenses by function. They interpret this to mean that expenses that are required to be reported by function include:

A

The government-wide statement of activities should present direct operating expenses by function. Special and extraordinary items are reported separately at the bottom of the statement of activities. Extraordinary items, per GASB 2200.143, are transactions or other events that are both unusual in nature and infrequent in occurrence. Governments may allocate indirect expenses to benefiting functions, but they are not required to do so.

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