Governmental

Question 1

What are the funds withing the Governmental fund statements? Which ones use encumbrances and budgets?

Answer 1

1. ) General, Special Revenue, Debt Service, Capital Projects, Permanent Fund.
2. ) Special Revenue, and General fund use Encumbrance and budgetary accounting.

Question 2

What is the encumbrance journal entry for a purchase order and when the goods are received?

Answer 2

1. ) Dr Encumbrance, Cr Budgetary fund balance
2. ) Dr. Budgetary fund balance, Cr Encumbrance
3. ) Dr Expenditure, Cr AP

Question 3

What funds need to be reconciled back to the Government-wide financials?

Answer 3

The governmental fund and the internal fund which is part of the proprietary fund.

Question 4

When reconciling the balance sheet from the fund to the government-wide statement, how are internal service and capital assets, LT liabilities, revenues and accrued interest treated?

Answer 4

Add internal service funds dollar for dollar
(Use A=L+E)
Capital Assets: Add assets, increases Net position
LT Liabilities: Add liabilities, decreases net position
Revenue recognition: subtract unavailable, increases net position
accrued interest: add, decreases net position

Question 5

When reconciling the income statement from the fund to the government-wide statement, how are the internal service funds, and the governmental fund’s capital assets, LT liabilities, revenue and accrued interest treated?

Answer 5

Add internal service funds dollar for dollar
Capital assets: add capital expenditures (outlay), subtract depreciation
LT Liabilities: subtract LT debt issued, add principal payments on LT debt
Revenue recognition: Add revenue not recognized in funds
Accrued interest: subtract increase, add decrease

Question 6

What are deferred inflows and outflows of resources?

Answer 6

Resources that occur in the current year but are related to future periods.

Question 7

1. ) What are the 3 types of net position?

2. ) Where is net position used?

Answer 7

1.) A.)Net investment in Capital Assets: Cap assets net of depreciation, less outstanding debt used for assets
B.) Restricted: by external parties, constitutional provisions, held in trust
C.) unrestricted: board designated funds + everything else
2.) Government-wide and proprietary and fiduciary statements (accrual statements)

Question 8

1. ) What are the different types of funds?

2. ) Where are the fund balances used?

Answer 8

1.) A.) nonspendable fund: items in nonspendable form (inventory) or legally required to be intact (endowment).
B.) Restricted fund: by external parties or legislation
C.) Commited funds: imposed by the government’s highest level authority (not considered legally enforceable) with formal action
D.) Assigned funds: constrained by the governments intent to use
E.) Unassigned funds: the general fund can only report a positive unassigned amount

Question 9

What are “Other financing sources (or uses)?

Answer 9

Other financing sources are used for transfers into an account, this can include proceeds from bonds. Other financing uses are transfers out of an account.

Question 10

What is the test for reporting “Major Funds” in CAFRs?

Answer 10

more than 10% of all funds of the same type (governmental or enterprise) and more than 5% of all funds (governmental and enterprise).

Question 11

What are the purposes of each Governmental fund?

Answer 11

The special revenue fund is for sources that are committed to something other than debt or capital projects.
The debt service fund is for resources used to pay for principle and interest of debt.
The capital project fund is for resources used to pay for capital outlay for buildings land or improvements.
The permanent fund houses resources entrusted to the government for the benefit of the government or its citizens. Funds must remain in tact. Earnings transferred to general or special revenue funds
General fund houses all other resources that does not apply to any other fund. Ex: revenue from taxes, licenses, permits, services or fines.

Question 12

What is a sale of future revenue recorded as in governmental wide statements?

Answer 12

Deferred inflows of resources

Question 13

A large not-for-profit organization’s statement of activities should report the net change for net assets that are?

Answer 13

Without Donor Restrictions and With Donor Restrictions

Question 14

What are funds from bonds reported as in the governmental fund?

Answer 14

Other financing sources

Question 15

Fund category that cannot be spent due to legal or contractual restriction or because it is not in spendable form?

Answer 15

Nonspendable

Question 16

What the 4 spendable forms?

Answer 16

1. Restricted- restricted by outside constraints
2. Committed- committed to a specific purpose or project by formal action (city council, legislation)
3. Assigned- funds intended to be used, not restricted or committed.
4. Unassigned- residual classification (only used by general fund)

Question 17

What are the 3 different net position categories?

Answer 17

1. Net investment in capital assets- Net investment in capital assets (gross cap assets - accumulated depri)
2. Restricted- assets restricted by creditors, constitutional provisions or enabling legislation.
3. Unrestricted- the remainder of the funds not in the other 2 categories.

Question 18

Is the property tax levy net of uncollectables?

Answer 18

Yes

Dr Tax levy AR
Cr Est uncollectables current
Cr Def inflow resources current

Question 19

what are the four expenditures classifications?

Answer 19

1. Fund- fund supplying resourses
2. Program/function- (public safety, education)
3. Character- identifites period benefited
4. Object- purpose (salaries)

Question 20

How are expenditures reported in the government wide and the fund level?

Answer 20

At the government wide level they are reported by program/function. At the fund level they are reported by character.

Question 21

What is the natural balance of appropriations?

Answer 21

Dr Est Revenues
Cr Appropriations
Dr/Cr Fund balance

Question 22

Hospital revenue:

Delivery room charge (15k to est collectible). 20,000
Cafe sale. 3000
Research grants. 10,000
Radiology charges. 2,000
Nursing fees. 12,000
Gift of medicine used for direct
Patent care 1,000

What are net patient revenues and other ops revenues?

Answer 22

Net patient revenues
15,000+2,000+12,000= 29k

Other ops revenues
3,000+10,000+1,000= 14,000

Net patient revenues: revenues from direct patient care (rooms, medicine) and related patient services like radiology and pathology. Charity care, contractual adj and est uncollectible reduces patient revenues.

Other ops rev: gift shop, parking, cafe, tuition for classes offered by hospital, FMV of materials/supplies, research grants

Question 23

What are the required Hospital financials?

Answer 23

Statement of net position,

statement of revenues, expenses and changes,

cash flows.

Question 24

Under what condition are pledges recognized?

Answer 24

Only if viewed as an unconditional gift