Governmental Accounting

Question 1

What is the JE for deferred inflow or outflow of income? e.g. county billed and collected occupational license fees for regulated businesses mcq07280 for Y2, in Y1.

Answer 1

Imposed non-exchange revenue transaction.
Net position is the difference between assets and deferred outflows, on the one hand, and liabilities and deferred inflows, on the other. Revenues increase net position—which makes a government look healthier financially, all other factors being equal. Expenses reduce net position—which makes a government look less healthy. If total revenues for the year exceed total expenses, then net position increases overall and financial health improves; the opposite is true if total expenses exceed totals revenues.

Question 2

Fund Structure

Answer 2

• Governmental
• Proprietary
• Fiduciary

Question 3

Fund Structure 1 = Governmental

FUND BALANCE

BASIS= modified accrual
Measurement focus = Flow of financial resources

Answer 3

G General
R Special Revenue = legally restricted to expenditure for specified purposes (taxes levied; road repairs that are not capitalizable)
a
S Debt Service =L-T Debt liab(principal & int) = recorded when become due & payable exception NOT when available & measurable or when they accrue

P Capital Projects = acquisition or construction of capital facilities
capital outlay (e.g. highway additions/constriction; levies on property owners to add sidewalks - capital addition)

P Permanent

Question 4

Fund Structure 2 = Properitary

NET POSITION

BASIS= full accrual
Measurement focus = economic resources

Answer 4

IS Internal service

E Entreprise

Question 5

Fund Structure 3 = Fiduciary

NET POSITION

BASIS= full accrual
Measurement focus = economic resources

Answer 5

C Custodial
I Investment
P Private Purpose (e.g. non-expendable trust)

P Pension &
O Other
E Employee Benefits

Question 6

3 primary users

Answer 6

• citizens/advocate groups
• legislative/oversight groups
• investors/creditors

Question 7

objective of funds

Answer 7

accountability

Question 8

City paid interest of $5,000 and principal of $20,000 from its debt service fund, from cash that was transferred earlier this year from the general fund. How should this expenditure be reported?

Answer 8

A: Debt service fund only:

DR Expenditures - interest 5k
DR expenditures - principal 20k
CR Cash 25k

Question 9

Transfers from the general fund to the debt service fund would be recorded as…

Answer 9

Other financing uses; not expenditures.

other financing uses = transfers out of the General fund on the statement of revenues, expenditures, and changes in fund balances

Question 10

Expenditures

Answer 10

payment to a pension trust fund

purchase of equipment

Question 11

Revenue fund - revenue from capital projects fund

Answer 11

DR Cash
CR Interfund transfers (from the general fund)

JE when recording any income from investment ofresources:
DR Cash
CR Revenue - invsmt income

Question 12

Expenditure types

Answer 12

DR Expenditures
CR Cash (or matured bonds payable if pmt is past due)

Question 13

Debt balances - closing budget at year-end

Answer 13

DR budgetary control
Dr appropriations control
CR estimated revenues control

Question 14

Activity - closing at year end

Answer 14

DR Interfund transfers from capital projects fund
DR interfund from special revenue fund
DR interfund transfers from capital projects fund
DR other revenues
CR Fund balance, restricted for debt service
CR Expenditures - interest
CR Expenditures - principal

Question 15

GOVERNMENTAL FUND ACCOUNTING
GENERAL
SPECIAL REVENUE
DEBT SERVICE
CAPITAL PROJECTS
PERMANENT

Answer 15

TRANSACTIONS THAT COUNT AS REVENUE
E.G. GRANT
E.G. SPECIAL ASSESSMENT FOR CAPITAL IMPROVEMENTS
OTHER FINANCING RESOURCES;
E.G. TRANSFERS FROM OTHER FUNDS LIKE GENERAL
E.G. PROCEEDS FROM OTHER FUNDS LIKE DEBT SERVICE