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Becker - Final Review > Governmental Accounting > Flashcards

Governmental Accounting Flashcards

1
Q

Debt service fund and bond amortization on premiums and discounts

A

Since the debt service fund measurement focus is sources & uses of financial resources no amortization is recognized

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2
Q

Characteristics if governmental accounting

A
  • TIMELINESS
  • CONSISTENCY
  • COMPARABILITY
  • understandability
  • reliability
  • relevance
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3
Q

What is the purpose of fund financial statements?

A

To report additional and detailed information about the government

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4
Q

Governmental Funds - GRaSPP

A 
G - General fund
R - special Revenue fund
a
S - debt Service fund
P - capital Projects fund
P - Permanent fund
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5
Q

Accounting for Government Funds

A
  1. Modified accrual basis of accounting

2. Current financial resources measurement focus

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6
Q

Proprietary Funds - SE

A

S - internal Service fund

E - Enterprise fund

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7
Q

Accounting for Proprietary Funds

A
  1. Full accrual basis of accounting

2. Economic resources measurement focus

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8
Q

When are enterprise funds required?

A
  1. Activity of fund is financed by debt secured by a pledge or fee revenue
  2. Collection of fees to recover costs
  3. Pricing policies
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9
Q

Fiduciary Funds - CIPPOE

A 
C - Custodial funds
I - Investment trust funds
P - Private purpose trust funds
P - Pension trust fund
OE - Other Employee benefit trust fund
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10
Q

Accounting for Fiduciary funds

A
  1. Full accrual basis of accounting

2. Economic resources measurement focus

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11
Q

What does CURRENT financial resources mean for GRaSPP

A
  1. no fixes assets are reported

2. no long term debt reported

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12
Q

Modified accrual revenue accounting

A

Recognized when measurable and available and by available I mean collectible in the current period + 60 days

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13
Q

Modified Accrual Book and close

A

Book - budget, activity, encumbrances

Close - budget, activity, encumbrances

BAE BAE accounting

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14
Q

Sources of governmental resources

A
  • income and sales tax
  • property and real estate taxes
  • fines and penalties
  • other financing sources = debt proceeds from bonds & notes and interfund transfers
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15
Q

Journal entries for the Bs in BAE BAE accounting or Budget part of modified accrual accounting

A 
Beginning of the year
Dr. Estimated revenue control
Dr. Budget control deficit 
Cr. Appropriation control - approved spending
Cr. Budget control surplus
End of Year
Dr. Appropriation control
Dr. Budget control surplus
Cr. Estimated revenue control
Cr. Budget control deficit
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16
Q

Nonexchange revenue

A

Collections during the year plus collections from first 60 days of next year equals revenue

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17
Q

Expenditure journal entry

A

Dr. Expenditure

Cr. Voucher payable

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18
Q

Inventory purchase method journal entry

A

Buying item
Dr. Expenditure
Cr. Voucher payable

No entry when items are used

On hand at end of year
Dr. Supplies inventory
Cr. Nonspendable fund balance - inventory

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19
Q

Inventory consumption method journal entry

A

Buying item
Dr. Supplies inventory
Cr. Voucher payable

Use of items
Dr. Expenditure
Cr. Supplies inventory

No journal entry at end of year

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20
Q

Classification of governmental expenditures

A

Functional program - Public and safety
Organizational unit - Police and fire
Activity - drug and highway for police

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21
Q

Fixed asset journal entry for modified accrual

A

Dr. Expenditure - capital outlay

Cr. Vouchers payable or cash

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22
Q

Debt journal entries for modified accrual

A

Proceeds from bond issue
Dr. Cash
Cr. Other financing source - bonds issued

Debt service payments
Dr. Expenditure - principal
Dr. Expenditure - interest
Cr. Cash

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23
Q

Lease journal entries for modified accrual - lessee

A

Recording lease
Dr. Expenditure - capital outlay
Cr. Other financing sources

Paying
Dr. Expenditure - principal
Dr. Expenditure - interest
Cr. Cash

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24
Q

Lease journal entries for modified accrual - lessor

A

Dr. Lease receivable - cash
Cr. revenue - principal
Cr. Deferred inflow of resources - plug

Dr. Interest receivable
Cr. Interest revenue

Receiving cash
Dr. Cash
Cr. Lease receivable - principal
Cr. Interest receivable - Interest

25
Q

Lease for Proprietary and Fiduciary

A 
Lessee is same is FASB
Lessor
Recording lease
Dr. Lease receivable 
Cr. Deferred inflow of resources

Revenue
Dr. Cash
Cr. Interest income
Cr. lease receivable

Dr. Deferred inflow of resources - total divided by number of years
Cr. Revenue

26
Q

Journal entry for property taxes for modified accrual

A

Dr. Property taxes receivable - current - full amount
Cr. Property tax revenue - estimated difference
Cr. Allowance

27
Q

Journal entry to book, close, and expense encumbrances

A

To book
Dr. Encumbrances
Cr. Budgetary control

To close
Dr. Budgetary control
Cr. Encumbrances

To expense
Dr. Expenditures - actual amount
Cr. Vouchers payable or cash

28
Q

Journal entries for encumbrances that roll into the next year

A

To close
Dr. Budgetary control
Cr. Encumbrances

To reclassify
Dr. Unassigned fund balance(year end surplus)
Cr. Fund balance, committed

To expense
Dr. Expenditure - prior year
Cr. Vouchers payable or cash

29
Q

Other financing source and use classification

A

Other financing use is for the one sending the money and other financing source is the one receiving money

30
Q

Categories of Fund balances - NU CAR

A

N - Nonspendable fund balance - prepaids & inventory
U - Unassigned fund balance
C - Committed fund balance - government obligated
A - Assigned fund balance - government intents to obligate
R - Restricted fund balance - restricted from outside by legislation, creditors and grantors

31
Q

General Fund - fund categories

A

NU CAR all of it and has positive balance for unassigned

32
Q

Special Revenue fund - fund categories

A

Doesn’t have assigned fund

33
Q

Debt Service fund - fund categories

A

Doesn’t have nonspendable

34
Q

Capital Projects fund - fund categories

A

Doesn’t have nonspendable

35
Q

Permanent fund - fund categories

A

Doesn’t have nonspendable, committed, or assigned

36
Q

Reciprocal vs nonreciprocal transactions

A

Reciprocal means there is an exchange and nonreciprocal means its one sided

37
Q

How to record a deferred inflow of resources

A

Dr. Accounts receivable

Cr. Deferred inflows of resources

38
Q

General Fund revenue sources

A
  1. Taxes when recorded/billed and owed
  2. Public & Safety: fines, fees, licenses and permit revenue
  3. Intergovernmental: shared or grant revenue from other funds
  4. Investment earns & miscellaneous earnings
  5. Charges for services if government elects to use general fund instead of Proprietary funds
39
Q

General Fund expenditures

A
  1. General government: admin functions like city manager or finance
  2. Public Safety: police and fire department etc.
  3. Culture & Recreation: parks, libraries, etc
40
Q

General Fund Balance sheet formula

A

Current Assets & Deferred outflows = Current Liabilities & Deferred inflows

41
Q

General Fund Balance Sheet

A
  1. Assets
  2. Liabilities
  3. Fund Balance: NU CARR
  • Current items only*
  • No fixed assets & long term debt*
42
Q

General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance

A
  1. Revenues
  2. Expenditures
  3. Other Financing Sources & Uses: transfers & bond proceeds
  4. Special Items

No depreciation expense

43
Q

Special Revenue Fund - revenues and expenditures

A
  1. Revenue: legally restricted for a specific purpose and either classified as intergovernmental revenue or fees; also grants
  2. Expenditures: current operating expenditures like street maintenance or capital outlays(highway construction)
44
Q

Special Revenue Fund Statement of Revenue, Expenditures, and Changes in Fund Balance

A
  1. Revenues
  2. Expenditures
  3. Other Financing Sources & Uses: transfers & bond proceeds
  4. Special items
45
Q

Debt Service Fund revenue sources

A
  1. Interfund transfers
    Dr. Cash
    Cr. Interfund transfer from fund
  2. Income from investment
    Dr. Cash
    Cr. Revenue - investment income
46
Q

Debt Service Fund expenditures

A
  1. Payment of interest
    Dr. Expenditure
    Cr. Cash or matured interest payable
  2. Payment of principal
    Dr. Expenditure - face amount
    Cr. Cash or matured bonds payable
47
Q

Debt Service fund balance sheet

A
  1. Assets
  2. Liabilities
  3. Fund Balance: NU CARR
48
Q

Debt Service fund and interest note

A

You record it when you pay; do not accrue it for governmental

49
Q

Journal entries to record capital grants from Capital project fund

A

Unrestricted government grant
Dr. Cash
Cr. Revenue

Restricted government grants - revenue when spent
Dr. Cash
Cr. Revenue collected in advance

Cost reimbursement contract restricted revenue - revenue when spent
Dr. Cash
Cr. Vouchers payable/cash
Dr. Revenue collected in advance
Cr. Revenue

General fund for special revenue fund transfer
Dr. Cash due from fund
Cr. Interfund transfers

50
Q

Capital projects fund bond proceeds

A
  1. Reported as other financing source

2. No amortization of bond premium or discount

51
Q

Bond journal entries for capital projects fund

A 
Bond issue
Dr. Cash - issue price
Dr. Other financing sources - discount
Cr. Other financing sources - bond issue - Face amount
Cr. Other financing sources - premium

To transfer premium or discount to debt service fund
Dr. Interfund transfer
Cr. Cash

When you invest in cd
Dr. Investment in CD
Cr. Cash - Face

Interest Revenue
Dr. Cash
Cr. Revenue - interest income

Transfer to debt service fund
Dr. Interfund transfer
Cr. Cash - interest

52
Q

Expenditure and encumbrance for capital projects fund

A

Contracts signed
Dr. Encumbrances
Cr. Budgetary control

Completed contract
Dr. Budgetary control
Cr. Encumbrances

To record purchased/constructed assets
Dr. Expenditures
Cr. Vouchers Payable or cash

53
Q

Note to determine where public restricted funds are recorded

A
  1. Principal & interest = special revenue fund

2. Interest only = permanent fund

54
Q

Internal Service Fund sources of revenue

A
  1. Restricted grants that are recognized when spent
    2.Operating revenues from services
    Dr. Cash
    Cr. Billings
  2. Nonoperating revenue like interest
55
Q

Establishing internal service fund

A

Interfund transfer
Dr. Cash
Cr. Interfund transfer

Contribution of assets
Dr. Capital Assets
Cr. Contribution

Sale on general obligation bonds
Dr. Cash
Cr. Long term bonds payable

Advances from other funds to be paid
Dr. Cash
Cr. Due from other fund

56
Q

Order of presentation for statement of Revenues, Expenses, and changes in net position - INCASET

A 
Income from operating
Nonoperating income & expense
Capital contributions
Additions to endowments
Special items (unusual or infrequent)
Extraordinary items
Transfers
57
Q

Establishing enterprise fund

A

Capital contribution
Dr. Capital assets
Cr. Capital contributions

Bond issue
Dr. Cash
Cr. Long term bonds payable

58
Q

Fiduciary funds and cash flows

A

Don’t have cash flows statement

Statement of Changes in Fiduciary Net Position
Statement of Fiduciary Net Position

Becker - Final Review (19 decks)

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