Government & Not-for-profit Flashcards
Modified Accrual Acocunting
Revenues are recognized when they are available and measurable
Available means if they are collectible within the current fiscal year or soon enough after the year-end that they could be used to settle current period liabilities.
Special rule: Property taxes has the sixty day rule, where they are expected to be collected more than 60 days following year-end are deferred and recognized as revenue in the following year.
What is the CAFR and what is it used for?
The comprehensive annual financial report is for state and local governments.
What is the main difference in the focuses of the two types of accounting– modified accrual with flow of current financial resources measurement focus
VS
Economic resource measurement focus in the accrual method
Governments don’t have going concern because they can always tax… The long term view of operations changes the focus of accounting from one of near-term recovery of amounts invested in assets to a longer-term focus on the sustainability of services and the ability to meet future demand.
Capital asset acquisitions in gov acct and accrual
Expenditures - Captial outlay
Cash
Capital Assets-Budildings
Cash
Annual depreciation in gov acct and accrual
none
Depreciation Expense
Accumulated Depreciation
Sale of Capital assets in gov acct and accrual
Cash
Proceeds sale of capital asset
Cash
Captial Asset–Equipment
Gain on sale of capital asset
Sale of bonds gov and accrual
Cash
OFS: proceeds of bonds
OFS: Premium on Bonds
Cash
Bonds Payable
Premium on Bonds
Amortization of Bond Premium gov and accrual
None
Premium on Bonds
Interest Expense
Principal Payment of debt gov and accrual
Expenditure: bond Principal
Cash
Bonds Payable
Cash
If coupon rate is higher than market rate, is this a premium or a discount
premium.
if market rate is higher than the coupon rate is this a premium or discount
discount.
