Governmental

Question 1

Government Wide Financial Statements

Answer 1

display information about the reporting government as a whole, except for its fiduciary activities. include separate columns for the governmental and business type activities of the primary government as well as for its component units.

Question 2

Primary Government

Answer 2

includes blended component units. The reporting entity’s financial statements should present the primary government (including its blended component units) and provide an overview of the discretely presented component units.

Question 3

Primary Government Criteria

Answer 3

1. It has a separately elected governing body, it is legally separate and
2. It is fiscally independent.

fiscally independent:

1. determine its budget,
2. levy taxes without approval, and
3. issue bonded debt without approval by another government.

Question 4

Management Discussion and Analysis

Answer 4

allows management to highlight significant issues and discuss key issues from the financial statements.

Question 5

Noncapital Financing

Answer 5

include cash receipts from grants and subsidies except (1) those specifically restricted for capital purposes and (2) those for specific activities that are considered to be operating activities of the grantor government.

Question 6

Operating Activities

Answer 6

cash inflows, receipts, and payments that do not result from transactions defined as capital and related financing, noncapital financing, or investing activities.

Question 7

Financing Activities

Answer 7

acquiring and disposing of capital assets; borrowing money for acquiring, constructing, or improving capital assets

Question 8

Investing Activities

Answer 8

making and collecting loans (except program loans) and acquiring and disposing of debt or equity instruments.

Question 9

Statement of Cash Flows should be presented for which funds?

Answer 9

all proprietary funds, but not for governmental funds.

Question 10

Component Unit Discrete Presentation

Answer 10

unless either (a) the components unit’s governing body is substantively the same as the governing body of the primary government, or (b) the component unit provides services almost entirely to the primary government, or almost exclusively benefits the primary government although it does not provide services directly to it.

Question 11

Consolidated Component Unit Data Presentation

Answer 11

in either the notes to the financial statements or in combining statements in the basic financial statements

Question 12

Pension Plan Reporting

Answer 12

in the fund financial statements, but not the government-wide statements. Fiduciary statements should include financial information for fiduciary funds and similar component units.

Question 13

Other Postemployment Benefits

Answer 13

Most entities fund their OPEB on a pay-as-you-go basis, paying only the amount equal to benefits claimed. The objective is to systematically and rationally allocate the present value of the projected cost of benefits over the working life of benefiting employees.

Question 14

Annual Required Contribution

Answer 14

The amount allocated to a given year

Question 15

Actuarial Accrued Liability

Answer 15

The present value of benefits earned to date by employees.

Question 16

Discrete Presentation

Answer 16

(1) economic resources received or held by the separate entity are totally (or nearly totally) for the direct benefit of the primary government, its component units, or its constituents; (2) the primary government, or its component units, is entitled to a majority of the economic resources received or held by the separate entity; and (3) the economic resources received or held by an individual entity that the specific primary government, or its component units, is entitled to, or has the ability to otherwise access, are significant to that primary government.

Question 17

Management Discussion and Analysis Attributes and Presentation

Answer 17

provides an analysis of the government’s financial performance for the year, provides comparisons of the current-year results to the previous year, and discusses both the positive and negative aspects of the comparison. Overall, the emphasis should be on the current year and the focus should be on the primary government. Although considered RSI, the MD&A is presented before the basic financial statements.

Question 18

Reporting of General Government Fixed Assets and Long Term Debt

Answer 18

General government fixed assets and long-term debt are not recorded in the governmental funds, but are shown in the governmental activities column of the governmental-wide financial statements.

Question 19

Presentation of Budgetary Comparisons

Answer 19

part of required supplementary information (RSI).

Question 20

MD & A Cassification

Answer 20

required supplementary information, not basic financial statements.

Question 21

Basic Financial Statements

Answer 21

both government-wide and fund financial statements along with the accompanying notes.

Question 22

CAFR Statistical Section: Types of Operating Information

Answer 22

number of government employees, operating indicators, and capital asset information.

Question 23

Contribution to Pension Trust Fund

Answer 23

Governmental-type funds record contributions to the pension trust fund as expenditures.

Question 24

Note Disclosures: Cash and Cash Equivalents

Answer 24

explain how cash equivalents are classified in the beginning and ending balances on the cash flows statement.

Question 25

Note on Significant Accounting Policies

Answer 25

include descriptive comments about the purposes and scope of the statements of net position and activities. only focus on the government-wide statements and does not include comments about other or required supplementary information.

Question 26

Concepts Statement Number 1

Answer 26

Assisting users with an assessment of the government’s operating results, level of services provided, and the ability to meet cash requirements

Question 27

Government Primary Mission

Answer 27

the delivery of programs and services.

Question 28

GASB Concepts Statements

Answer 28

provide the basic building blocks for the specific accounting reporting standards.

Question 29

multiple-jurisdiction deferred compensation plan (administrator)

Answer 29

report all of the plan assets and liabilities in Custodial Fund because the governmental unit is acting as an agent for both its own employees and other governments participating in the plan.

Question 30

Modified Accrual Revenue

Answer 30

susceptible to accrual at the time they become measurable and available for use

Question 31

Modified Accrual Deferred Revenue

Answer 31

Significant amounts received prior to the normal collection time (such as prepaid property taxes)

Question 32

Interperiod Equity

Answer 32

using the revenues from one period to pay for the expenditures of that same period and that period only.

Question 33

Residual Equity Transfers

Answer 33

are between funds, not between periods.

Question 34

GASB’s Mission

Answer 34

providing a framework to educate users and support public policies, investments, and management by those users.

Question 35

Governmental Fund Measurement Focus

Answer 35

The governmental fund measurement focus is on determination of financial position and changes in financial position, rather than on net income determination. primary emphasis is on the flow of financial resources.

Question 36

Entity’s First IFRS Financial Statements

Answer 36

include at least three statements of financial position, two statements of profit or loss and other comprehensive income, two separate statements of profit or loss (if presented), two statements of cash flows, and two statements of changes in equity and related notes.

Question 37

IFRS 1

Answer 37

The entity presenting its most recent previous financial statements in accordance with national requirements, using some individual IFRS to account for items for which national requirements do not exist

Question 38

Concepts Statement No. 3

Answer 38

describes the importance of the GASB’s independence for establishing communication principles in the reporting standards to support governments’ credibility and enhance comparability among external financial statements.

Question 39

FASB Approval Process

Answer 39

After a project is added to the technical agenda, the FASB deliberates at one or more public meetings. If deemed necessary the FASB then issues an Exposure Draft to solicit broad stakeholder input and holds a public roundtable meeting on the Exposure Draft, if necessary. ratifies amendments to the Accounting Standards Codification by issuing an Accounting Standards Update.

Question 40

Custodial Fund

Answer 40

used to report resources held by the reporting government in a purely custodial capacity (assets equal liabilities).

These funds typically involve only the receipt, temporary investment, and remittance of fiduciary resources to individuals, private organizations, or other governments.

have neither capital assets nor expenses, and as such would not have depreciation expense.

Question 41

Budgetary Comparisons

Answer 41

part of required supplementary information (RSI).

Question 42

Modified Accrual Accounting

Answer 42

Interest and principal on long-term debt are not recorded until the periods in which they must be paid.

Question 43

Note on Significant Accounting Policies

Answer 43

include descriptive comments about the purposes and scope of the statements of net position and activities.

Question 44

Enterprise Fund

Answer 44

one of the proprietary funds. Governments should present a statement of cash flows for proprietary funds

Question 45

Direct Method

Answer 45

direct method of presenting cash flows from operating activities (including a reconciliation of operating cash flows to operating income) should be used.

Question 46

Investment Trust Fund

Answer 46

accounts for resources (and related liabilities) held by governments in a trustee capacity, it is considered a fiduciary fund type. Required statements for fiduciary funds are (1) statement of fiduciary net position and (2) statement of changes in fiduciary net position.

Question 47

Data for Individual Component Units (if consolidated)

Answer 47

presented in either the notes to the financial statements or in combining statements in the basic financial statements

Question 48

General Governmental Fixed Assets and Long Term Debt

Answer 48

not recorded in the governmental funds, but are shown in the governmental activities column of the governmental-wide financial statements. General long-term debt to be repaid from general resources of the government should not be reported in any fund.