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Government (State and Local Accounting) Flashcards

1
Q

Government (State and Local Accounting)

Describe reciprocal interfund activities

A

Reciprocal interfund activities are activities that affect two funds resulting from loans or services provided and received.

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2
Q

Government (State and Local Accounting)

Describe non-reciprocal interfund activities

A

Nonreciprocal interfund activities consist of flows of assets without equivalent flows in return.

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3
Q

Government (State and Local Accounting)

What do support services consist of in a nongovernmental not-for-profit entity consist of?

A

Supporting services expenses are separated into two categories:

  1. Management and general
  2. Fundraising
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4
Q

Government (State and Local Accounting)

What do program expenses in a nongovernmental not-for-profit entity consist of?

A

The costs incurred by the not-for-profit entity in carrying out its primary mission are considered program expenses.

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5
Q

Government (State and Local Accounting)

Define Encumbrances

A

Encumbrances are commitments related to unperformed (executory) contracts for goods and services. They are recorded in the General and other governmental funds for budgetary control purposes to prevent overspending and demonstrate compliance with legal requirements. An encumbrance does not represent either expenditures or liabilities—it represents the estimated amount of expenditure which will result if unperformed contracts (purchase orders) in process are completed. (GASB 1700.127)

A debit to Encumbrance is offset by a credit to Fund Balance: Reserve for Encumbrance. When the contract is completed (the goods or services have been received), the encumbrance entry is reversed and the expenditure is recorded. The encumbrance entry is also removed at year-end and a portion of the Fund Balance is labeled “committed” or “assigned” unless there is already a portion of the Fund Balance labeled “restricted” regarding the specific commitment represented by the original Encumbrance.

For budgetary control: Unencumbered appropriations = Appropriations - Expenditures - Encumbrances

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6
Q

Government (State and Local Accounting)

Define governmental funds

A

Governmental funds: To finance and account for general government activities, such as police and fire protection, courts, inspection, and general administration. Most of their financial resources are budgeted and appropriated annually for specific general government uses (expenditures) by the legislative body. Governmental funds include the following:

(1) General fund
(2) Special revenue funds
(3) Capital projects funds
(4) Debt service funds
(5) Permanent funds

Greater Phoenix Swing Dance Competition

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7
Q

Government (State and Local Accounting)

True or False

The economic resources measurement focus and the ACCRUAL basis of accounting are used for proprietary funds and fiduciary funds.

A

True

The economic resources measurement focus and the ACCRUAL basis of accounting are used for proprietary funds and fiduciary funds.

Proprietary funds

  • Enterprise Funds
  • Internal Service Funds

Fiduciary Fund
-Pension Trust Fund

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8
Q

Government (State and Local Accounting)

True or False
The Modified Accrual Basis of Accounting are used for Governmental Funds

A

True

The current financial resources measurement focus and the modified accrual basis of accounting are used for governmental funds. The general fund, capital projects fund, special revenue fund, and debt service fund are all governmental funds.

Greater Phoenix Swing Dance Competition

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9
Q

Government (State and Local Accounting)

True or False
A contribution to a not-for-profit restricted to long-term purposes like construction shall be reported as a cash flow from financing activities.

A

True

A contribution to a not-for-profit restricted to long-term purposes like construction shall be reported as a cash flow from financing activities. Cash flows received from investment income restricted by donor stipulation to the same purposes also are reported as financing activities, not as operating activities.

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10
Q

Government (State and Local Accounting)

True or False

Property tax revenues are recognized when they become available.

A

True

Property tax revenues are recognized when they become available.

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11
Q

Government (State and Local Accounting)

Define Appropriations

A

Appropriations is an account created as a restriction of revenues.

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12
Q

Government (State and Local Accounting)

Define Encumbrances

A

Encumbrances, similar to a purchase order, specifically designates funds for a specific future purchase of goods or services.

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13
Q

Government (State and Local Accounting)

Define Expenditures

A

Expenditures can be for capital or revenue items and means an outflow of resources, usually money.

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14
Q

Government (State and Local Accounting)

What are the following types of information would be included in total net assets in the statement of financial position for a nongovernmental not-for-profit organization?

A

Unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets

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15
Q

Government (State and Local Accounting)

How is an interfund transfer without requirement for repayment recorded in the financial statements?

A

An interfund transfer without requirement for repayment must be recorded as other financing uses (or sources to the recipient).

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16
Q

Government (State and Local Accounting)

Define program revenues

A

Programs are financed with program revenues and general revenues. Program revenues are derived directly from the program itself or from parties outside the reporting government’s taxpayers or citizenry, as a whole; they reduce the net cost of the function to be financed from the government’s general revenues. Financing from outside parties that is restricted to a specific program or programs is considered program revenue.

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17
Q

Government (State and Local Accounting)

True or False
Capital assets are reported in governmental funds.

A

False

Capital assets are not reported in governmental funds, but they are reported in proprietary and fiduciary funds as well as in the government-wide or entity-wide financial statements. The term “capital assets” is used in governmental accounting for long-lived assets (generally longer than one year) rather than the terms “property, plant and equipment,” or “fixed assets.”

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18
Q

Government (State and Local Accounting)

Describe encumbrance accounting

A

Encumbrance accounting is a method of budgetary control for governmental funds, including the general fund. Encumbrances do not represent expenditures as they are a memorandum of commitments that will eventually lead to expenditures. They do not represent liabilities as the goods and services are yet to be delivered. Governmental intent to commit resources for specific uses in the future is indicated by an assignment of fund balance.

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19
Q

Government (State and Local Accounting)

Which of the following financial categories are used in a nongovernmental not-for-profit entity’s statement of financial position?

A

Assets, liabilities, and net assets

The statement of financial position is the term for the balance sheet reported by private not-for-profit (NFP) entities. Balance sheets report the balances of permanent accounts on a specific date. Therefore, income, expenses, or changes in net asset categories are not reported. The FASB recommends that the financial statements of an NFP focus on the entity as a whole. The NFP account equation uses the term “net assets” for equity. Its accounting equation is assets equal liabilities plus net assets.

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20
Q

Government (State and Local Accounting)

True or False

Fiduciary fund information is included in a government’s entity-wide or government-wide financial statements.

A

False

Fiduciary fund information is not included in a government’s entity-wide or government-wide financial statements.

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21
Q

Government (State and Local Accounting)

True or Fasle
On the modified accrual basis of accounting, revenues should be recognized when the underlying exchange has occurred and the resources are available.

A

On the modified accrual basis of accounting, revenues should be recognized when the underlying exchange has occurred and the resources are available

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22
Q

Government (State and Local Accounting)

Nongovernmental not-for-profit entities (either voluntary health and welfare organizations or other not-for-profit organizations) are required to provide which of the following external financial statements?

A

Statement of financial position, statement of activities, statement of cash flows
PAC

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23
Q

Government (State and Local Accounting)

What is the definition of “Other Financing Sources” in Governmental Accounting?

A

Other financing sources are used to record operating transfers-in for governmental funds.

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24
Q

Government (State and Local Accounting)

What are the four different catagories of non-exchange revenues?

A
  1. Derived tax revenues (Income and sales taxes)
  2. imposed nonexchange revenues (Property taxes)
  3. government-mandated nonexchange transactions
  4. Voluntary nonexchange transactions.
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25
Q

Government (State and Local Accounting)

True or false

Decisions, resolutions, appropriations, etc. by directors, trustees, or managers do result in restrictions on assets.

A

False

Decisions, resolutions, appropriations, etc. by directors, trustees, or managers do not result in restrictions on assets.

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26
Q

Government (State and Local Accounting)

Discrete vs. Blended Presentation

A

Blending of financial results is allowed as long as the two agencies are not separate legal entities

Discrete presentation is for affiliated entities whose resources are entirely for the benefit of the primary government.

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27
Q

Government (State and Local Accounting)

Define Special Revenue Funds

A

In governmental accounting, special revenue funds are governmental funds used to account for the proceeds of specific revenue sources (other than trusts for individuals, private organizations, or other governments or for major capital projects) that are legally restricted to expenditure for specific purposes. Special revenue funds are accounted for on the modified accrual basis.

Some special revenue funds are:

gasoline excise taxes to be used for street maintenance and
hotel/motel bed taxes to be used for industrial development or to be allocated to the arts.

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28
Q

Government (State and Local Accounting)

Government-wide financial statements should be prepared using the modified accrual basis of accounting.

A

False

The government-wide financial statements consist of a statement of net position and a statement of activities. Those statements should “report information about the overall government without displaying individual funds or fund types” (GASB 2200.110). The statements should be prepared using the accrual basis of accounting and distinguish between governmental and business-type activities. Information about fiduciary funds should not be included in the statements.

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29
Q

Government (State and Local Accounting)

How is the adoption of the operating budget recorded in governmental accounting?

A

Adoption of the operating budget is recorded by debiting appropriate budgetary accounts for estimated inflows (“estimated revenues”) and crediting the appropriate budgetary accounts for estimated and approved outflows (“appropriations”). “Budgetary fund balance” is debited or credited for the difference.

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30
Q

Government (State and Local Accounting)
True or False

The acquisition of capital assets with general fund financial resources should be recorded as a capitalization of the assets that has to be depreciated

A

Government (State and Local Accounting)

False
The acquisition of capital assets with general fund financial resources should be recorded as a general fund expenditure.

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31
Q

Government (State and Local Accounting)

What are the basic financial statements for a not-for-profit entity?

A

The basic financial statements for a NOT-FOR-PROFIT entity are

  1. Statement of financial position (like a balance sheet)
  2. Statement of activities
  3. Statement of cash flows

PAC

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32
Q

Government (State and Local Accounting)

True or False

A budgetary comparison statement is required only for the General Fund and for each major special revenue fund

A

True

A budgetary comparison statement is required only for the General Fund and for each major special revenue fund

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33
Q

Government (State and Local Accounting)

True or False

A statement of functional expenses is required for voluntary health and welfare entities.

A

True

A statement of functional expenses is required for voluntary health and welfare entities.

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34
Q

Government (State and Local Accounting)

True or False

All taxes, even those levied for a specific purpose, are general revenues.

A

True

All taxes, even those levied for a specific purpose, are general revenues.

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35
Q

Government (State and Local Accounting)

What are the three conditions that make capitalization optional for government-wide reporting?

A

The three conditions that make capitalization optional for government-wide reporting

  1. It is to be held for public exhibition and not gain
  2. It is to be protected and preserved
  3. A policy is in place requiring proceeds from any potential sale to be used to acquire other collection items.
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36
Q

Government (State and Local Accounting)

True or False

Amounts expected to be collectible during the first 60 days of the following year can be recorded as revenues of the current year if they are legally usable to pay current liabilities of the current year; that is, if they are available.

A

Amounts expected to be collectible during the first 60 days of the following year can be recorded as revenues of the current year if they are legally usable to pay current liabilities of the current year; that is, if they are available.

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37
Q

Government (State and Local Accounting)

What are some of the required supplementary information for governments?

A

Required supplementary information for governments may include the following:

a. Budgetary comparison schedules for the general fund and major special revenue funds (if not presented as basic financial statements)
b. Information on infrastructure capital assets reported using the modified approach, described in section 2427.02
c. Schedules of funding progress and of employer contributions for pension plans and other postemployment benefit plans (discussed with fiduciary fund financial statements in section 2424.02)

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38
Q

Government (State and Local Accounting)

True or False

Inflows of assets from other funds without a requirement for repayment are considered interfund transfers.

A

True
Inflows of assets from other funds without a requirement for repayment are considered interfund transfers.

In proprietary funds (which include internal service funds), transfers should be reported separately after nonoperating revenues and expenses in the statement of revenues, expenses and changes in fund net position. An interfund transfer to/from a governmental fund should be reported as “other financing sources or uses” in the governmental fund.

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39
Q

Government (State and Local Accounting)

What are the three sections of the Comprehensive Annual Financial Report (CAFR)?

A

The CAFR (comprehensive annual financial report) of a government includes three sections: Introductory, Financial, and Statistical.

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40
Q

Government (State and Local Accounting)

What are the three Governmental Accounting Fund Types?

A
  1. Governmental Funds
  2. Proprietary Funds
  3. Fiduciary Funds
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41
Q

Government (State and Local Accounting)

Describe Modified Accrual Accounting

A
  • Current Financial Resources focus

- Revenues recognized when available and measureable.

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42
Q

Government (State and Local Accounting)

Describe the opening budgetary entry

A

Dr. Estimated Revenues Control
Cr. Appropriations Control
Dr./ Cr. Budgetary Fund Balance (plug)

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43
Q

Government (State and Local Accounting)

Describe the closing budgetary entry

A

Dr. Appropriations Control
Dr/ Cr Budgetary Fund Balance (plug)
Cr. Estimated Revenues Control

44
Q

Government (State and Local Accounting)

What are the two Governmental Fund statements?

A
  1. Balance Sheet

2. Statement of Revenues, Expenditures, and Changes in Fund Balance.

45
Q

Government (State and Local Accounting)

True or False

Imposed tax revenues are recorded when budgeted.

A

True

Imposed tax revenues are recorded when budgeted.

46
Q

Government (State and Local Accounting)

True or False

Estimated uncollectible property tax revenues offset revenues

A

False

Estimated uncollectible property tax revenues do not offset revenues, so DO NOT NET THEM.

47
Q

Government (State and Local Accounting)

What are the three Proprietary Fund Financial Statements?

A
  1. Statement of Net Assets
  2. Statement of Revenues, Expenses, and Changes in Net Assets
  3. Statement of Cash Flows

RAC

48
Q

Government (State and Local Accounting)

What are the two main points about Fiduciary Funds?

A
  1. Use Accrual Basis of Accounting

2. Have an Economic Resource Focus

49
Q

Government (State and Local Accounting)

List the different types of Fiduciary Funds

A

APIP

  1. Agency Fund
  2. Pension Trust Fund
  3. Investment Trust Fund
  4. Private Purpose Trust
50
Q

Government (State and Local Accounting)

Describe the two Fiduciary Fund Statements

A
  1. Statement of Net Position

2. Statement of Changes in Net Position

51
Q

Government (State and Local Accounting)

For Governmental Wide Financial Statements, list the important points about the Statement of Net Position and Statement of Activities.

A
  1. Prepared on an Accrual Basis
  2. Focus is on Economic Measurement
  3. Purpose is to provide Operational Accountability
52
Q

Government (State and Local Accounting)

List the order of Statement of Net Position

A

Statement of Net Position (Important!)

  1. Assets (Current and Non- Current ordered by liquidity)
  2. Deferred OUTFLOWS of Resources
  3. Liabilities (Current and Non- Current ordered by liquidity)
  4. Deferred INFLOWS of Resources
53
Q

Government (State and Local Accounting)

What are the three different assets on the Statement of Net Position?

A
  1. Restricted Net Assets
  2. Unrestricted Net Assets
  3. Capital Assets net of debt
54
Q

Government (State and Local Accounting)

What are the two main activities in the Statement of Net Position?

A
  1. Government Activities

2. Business Activities

55
Q

Government (State and Local Accounting)

True or False

Component Units are reported in the Fund Financial Statements.

A

False

Component Units are reported in the Entity- Wide Financial Statements and not the Fund Financial Statements.

56
Q

Government (State and Local Accounting)

What are the Financial Statements required for a Defined Benefit pension plan?

A
  1. Statement of Fiduciary Net Position

2. Statement of changes in Fiduciary Net Position

57
Q

Government (State and Local Accounting)

A special purpose unit of government such as a school board is considered a primary government if it meets which of the following criteria?

A

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

  1. It has a separately elected governing body.
  2. It is legally separate.
  3. It is fiscally independent of other state and local governments.
58
Q

Government (State and Local Accounting)

What do estimated revenues usually consist of?

A
  1. revenues
  2. increases in the general fund resources not matched by decreases in another fund resources
  3. expected interfund transfers
59
Q

Government (State and Local Accounting)

True or False

GASB requires a summary reconciliation between fund financial statements and government-wide financial statements.

A

True

GASB requires a summary reconciliation between fund financial statements and government-wide financial statements.

60
Q

Government (State and Local Accounting)

Define non-spendable in a fund balance

A

The portion of fund balance that reflects equity for amounts that cannot be spent because they are not in spendable form would be termed “nonspendable.”

61
Q

Government (State and Local Accounting)

What is the difference between committed fund balance and restricted fund balance?

A

Committed fund balance would result from an action of the highest level of the government and assigned fund balance would reflect action by a government designee.

Restrictions of fund balance would reflect specific purposes externally imposed by creditors, grantors, or enabling legislation.

62
Q

Government (State and Local Accounting)

True or False

Interfund Transfers occur in both governmental funds and proprietary funds.

A

False

Interfund Transfers occur only in governmental funds.

63
Q

Government (State and Local Accounting)

How are deferred revenues accounted for using the modified basis of accounting used for governmental funds?

A

At the fund level, derived tax revenues are reported using the modified accrual method.

Using modified accrual, that portion of the ending receivable which is MEASURABLE BUT NOT AVAILABLE, or accounted for as an allowance, is accounted for as deferred revenue.

64
Q

Government (State and Local Accounting)

When are derived tax revenues reported?

A

Derived tax revenues are reported when the underlying transaction has occurred, and for the modified accrual method of accounting, when the resource is considered to be AVAILABLE.

65
Q

Government (State and Local Accounting)

True or False

General long-term liabilities should be reported in the governmental activities column in the government-wide statement of net position, not the government-wide statement of activities.

A

True

General long-term liabilities should be reported in the governmental activities column in the government-wide statement of net position, not the government-wide statement of activities.

66
Q

Government (State and Local Accounting)

True or False

The net assets of proprietary funds are called net position. The net assets of a governmental fund are represented by Fund Balance.

A

True

The net assets of proprietary funds are called NET POSITION. The net assets of a governmental fund are represented by FUND BALANCE.

67
Q

Government (State and Local Accounting)

What three sections does the comprehensive annual financial report (CAFR) of a government consist of?

A

The CAFR (comprehensive annual financial report) of a government includes three sections: Introductory, Financial, and Statistical.

68
Q

Government (State and Local Accounting)

True or False

Fiduciary fund information is not shown within the government-wide financial statements.

A

True

Fiduciary fund information is not shown within the government-wide financial statements.

69
Q

Government (State and Local Accounting)

In order for an entity to be considered a primary government what criteria must it meet?

A

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

  1. It has a separately elected governing body.
  2. It is legally separate.
  3. It is fiscally independent of other state and local governments.
70
Q

Government (State and Local Accounting)

True or False

The agency fund reports a statement of changes in fiduciary net position.

A

False

The agency fund does not report a statement of changes in fiduciary net position. It consists only of assets and liabilities that are reported on the financial statement date in the statement of fiduciary net position.

Therefore the agency fund only includes a combining statement of fiduciary net position—fiduciary funds.

71
Q

Government (State and Local Accounting)

True or False

General long-term liabilities should be reported in the governmental activities column of the government-wide statement of net position.

A

True

General long-term liabilities should be reported in the governmental activities column of the government-wide statement of net position.

72
Q

Government (State and Local Accounting)

True or False

The fund financial statements include statements of cash flows for proprietary funds but not for governmental funds.

A

True

The fund financial statements include statements of cash flows for PROPRIETARY funds but not for GOVERNMENTAL funds.

73
Q

Government (State and Local Accounting)

Define Non-spendable vs Restricted.

A

Non-spendable- The portion of fund balance that reflects equity for amounts that cannot be spent because they are not in spendable form

Restricted- specific purposes externally imposed by creditors, grantors, or enabling legislation.

74
Q

Government (State and Local Accounting)

True or False

Only the general fund can have an unassigned fund balance

A

True

Only the general fund can have an unassigned fund balance

75
Q

Government (State and Local Accounting)

True or False

Depreciation of general capital assets, including infrastructure capital assets, should be reported by function.

A

True

Depreciation of general capital assets, including infrastructure capital assets, should be reported by function.

76
Q

Government (State and Local Accounting)

True or False

Depreciation is not taken on infrastructure assets accounted for using the modified approach.

A

True

Depreciation is not taken on infrastructure assets accounted for using the modified approach.

77
Q

Government (State and Local Accounting)

What are GENERAL capital assets?

A

General capital assets are capital assets not specifically related to activities reported in proprietary or fiduciary funds. They are reported in the governmental activities column of the government-wide statement of net position.

78
Q

Government (State and Local Accounting)

How should leased capital assets should be reported for general government purposes?

A

Leased capital assets should be reported in government-wide financial statements. If used for general government purposes, the leased asset would be considered a general capital asset.

79
Q

Government (State and Local Accounting)

True or False

In proprietary funds (which include internal service funds), transfers should be reported separately after nonoperating revenues and expenses in the statement of revenues, expenses and changes in fund net position.

A

True

In proprietary funds (which include internal service funds), transfers should be reported separately after nonoperating revenues and expenses in the statement of revenues, expenses and changes in fund net position.

80
Q

Government (State and Local Accounting)

True or False

“Other financing sources and uses” is an appropriate category for proprietary funds.

A

False

“Other financing sources and uses” is not an appropriate category for proprietary funds.

81
Q

Government (State and Local Accounting)

True or False

Governments choosing to allocate indirect expenses should report them in a column separate from the direct expenses to enhance comparability with other governments that do not allocate.

A

True

Governments choosing to allocate indirect expenses should report them in a column separate from the direct expenses to enhance comparability with other governments that do not allocate.

Therefore, the direct and indirect expenses should not be combined for reporting purposes.

82
Q

Government (State and Local Accounting)

True or False

All taxes, even those levied for a specific purpose, are general revenues.

A

True

All taxes, even those levied for a specific purpose, are general revenues.

83
Q

Government (State and Local Accounting)

True or False

All revenues are general revenues unless they are required to be reported as program revenues.

A

True

All revenues are general revenues unless they are required to be reported as program revenues.

84
Q

Government (State and Local Accounting)

List the items in order that are included in the comprehensive annual financial report (CAFR)

A
  1. Management’s discussion an analysis (MD&A)
  2. Government-wide statement of net position
  3. Government-wide statement of activities
  4. Balance sheet - governmental funds
  5. Reconciliation of the balance sheet of governmental funds to the statement of net assets, governmental activities.
  6. Statement of revenues, expenditures, and changes in fund balances- governmental funds.
  7. Reconciliation of the statement of revenues, expenditures, and changes in fund balance to the statement of activities, governmental activities.
  8. Statement of net position - proprietary funds.
  9. Statement of revenues, expenses, and changes in net position- proprietary fund
  10. Statement of cash flows.
  11. Notes to financial statements
  12. Required supplementary information (other than MD&A)
85
Q

Government (State and Local Accounting)

True or False

Infrastructure Assets are never reported on the government -wide statement of net position.

A

False

Infrastructure assets are required to be reported on the government-wide statement of net position.

The use of the modified approach for assets means that these assets are NOT DEPRECIATED if certain conditions are satisfied.

86
Q

Government (State and Local Accounting)

Give the definition of a fund

A

A fund is defined as a fiscal and accounting entity with w self-balancing set of accounts.

Funds are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations.

87
Q

Government (State and Local Accounting)

Where does interest received as returns on investments in an enterprise fund show up on the statement of cash flows?

A

For GASB purposes, cash flows from INVESTING ACTIVITIES includes interest received as returns on investments.

Notice that this is different from regular accounting (FASB) which classifies interest on investments as cash flows from OPERATING ACTIVITIES.

88
Q

Government (State and Local Accounting)

What are the five fund balance classifications?

A
  1. Nonspendable
  2. Restricted
  3. Committed
  4. Assigned
  5. Unassigned
89
Q

Government (State and Local Accounting)

What are the three financial statements for proprietary funds?

A
  1. Statement of net position
  2. The statement of revenues, expenses, and changes in fund net position.
  3. The statement of cash flows

RPC

90
Q

Government (State and Local Accounting)

True or False

On the balance sheet for the governmental funds, fund balances are reported in two categories- restricted and unrestricted

A

False

On the balance sheet for the governmental funds, fund balances are reported in two categories- reserved and unreserved.

91
Q

Government (State and Local Accounting)

What are the two financial statements prepared for fidicuary funds?

A
  1. The statement of fiduciary net position

2. The statement of changes in fiduciary net position

92
Q

Government (State and Local Accounting)

True or False

Agency funds should be reported on the statement of fiduciary net position, but not on the statement of changes in fiduciary net position.

A

True

Agency funds should be reported on the statement of fiduciary net position, but not on the statement of changes in fiduciary net position.

93
Q

Government (State and Local Accounting)

True or False

According to governmental accounting standards, the statement of cash flows is prepared only for the proprietary funds.

A

True

According to governmental accounting standards, the statement of cash flows is prepared only for the proprietary funds.

94
Q

Government (State and Local Accounting)

True or False

The statement of cash flows is a government wide financial statement.

A

False

The statement of cash flows is NOT a government wide financial statement.

The statement of cash flows is prepared only for the proprietary funds.

95
Q

Government (State and Local Accounting)

According to governmental accounting standards, the format for the statement of cash flows consists of which four sections?

A

The SCF sections include cash flows from

  1. Operating Activities
  2. Noncapital financing activities
  3. Capital and related financing activities
  4. Investing activities

Note: For governmental purposes there is no exclusive “Financing” section.

96
Q

Government (State and Local Accounting)

What is the difference between the economic resources measurement focus and the financial resources measurement focus?

A

Economic resources measurement focus- associated with the ACCRUAL basis of accounting.

Financial resources measurement focus- associated with the statements prepared for governmental funds.

97
Q

Government (State and Local Accounting)

On the statement of net position for proprietary funds, net position is disclosed in which three classifications?

A

On the statement of net position for proprietary funds, net position is disclosed in three classifications

  1. Net investment in capital assets
  2. Restricted
  3. Unrestricted
98
Q

Government (State and Local Accounting)

True or False

Cash received from government- mandated grants should be reported as a deferred inflow when cash is received prior to meeting the timing eligibility requirement.

A

True

Cash received from government- mandated grants should be reported as a deferred inflow when cash is received prior to meeting the timing eligibility requirement.

Note that, if there was not time restriction placed on the government- mandated grant by the state, revenue would not be deferred.

99
Q

Government (State and Local Accounting)

Describe the journal entry to record the budget for a governmental entity.

A

Estimated Revenues Control xxxx
Appropriation Control xxxx
Budgetary Fund Balance xxxx

100
Q

Government (State and Local Accounting)

True or False

Assets are not reported on the balance sheet for governmental funds, but are reported as expenditures (net of depreciation) on the statement of revenues, expenditures, and changes in fund balances (government-wide statement).

A

True

Assets are not reported on the balance sheet for governmental funds, but are reported as expenditures (net of depreciation) on the statement of revenues, expenditures, and changes in fund balances (government-wide statement).

101
Q

Government (State and Local Accounting)

True or False

In a capital projects fund, the inflow of bond proceeds should be accounted for in the year expended.

A

False

In a capital projects fund, the inflow of bond proceeds should be accounted for in the YEAR RECEIVED, regardless of when the bond proceeds are expended.

102
Q

Government (State and Local Accounting)

How should proceeds of long-term issues not recorded as fund liabilities be reported in governmental funds?

A
  1. Report as other financing sources (includes issue premiums)
  2. Debt issue costs, including underwriter fees, should be reported as expenditures.
103
Q

Government (State and Local Accounting)

True or False

Bond premiums/ Discounts are capitalized and amortized in the Debt Service Fund.

A

False

Premiums/ Discounts are deemed to be another financing source in a governmental fund and are recorded as such when the bonds are sold. The premium/ discount is not capitalized/ amortized.

104
Q

Government (State and Local Accounting)

True or False

For GASB purposes, cash equivalents usually mature within three months (ninety days) or less from the original issuance date.

A

False

For GASB purposes, cash equivalents usually mature within three months (ninety days) or less from the date the entity PURCHASED the security.

105
Q

Government (State and Local Accounting)

True or False

According to governmental accounting standards, the amount reported for transfers on the government-wide statement of activities represents transfers between governmental activities and business-type activities.

A

True

According to governmental accounting standards, the amount reported for transfers on the government-wide statement of activities represents transfers between governmental activities and business-type activities.

106
Q

Government (State and Local Accounting)

Describe the formula for the Statement of Net Position.

A

Assets + Deferred outflows of resources - Liabilities - Deferred inflows of resources = Net Position.

Financial Accounting and Reporting (15 decks)

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