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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
Lease for Proprietary and Fiduciary
``` 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
Journal entry for property taxes for modified accrual
Dr. Property taxes receivable - current - full amount Cr. Property tax revenue - estimated difference Cr. Allowance
27
Journal entry to book, close, and expense encumbrances
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
Journal entries for encumbrances that roll into the next year
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
Other financing source and use classification
Other financing use is for the one sending the money and other financing source is the one receiving money
30
Categories of Fund balances - NU CAR
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
General Fund - fund categories
NU CAR all of it and has positive balance for unassigned
32
Special Revenue fund - fund categories
Doesn't have assigned fund
33
Debt Service fund - fund categories
Doesn't have nonspendable
34
Capital Projects fund - fund categories
Doesn't have nonspendable
35
Permanent fund - fund categories
Doesn't have nonspendable, committed, or assigned
36
Reciprocal vs nonreciprocal transactions
Reciprocal means there is an exchange and nonreciprocal means its one sided
37
How to record a deferred inflow of resources
Dr. Accounts receivable | Cr. Deferred inflows of resources
38
General Fund revenue sources
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
General Fund expenditures
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
General Fund Balance sheet formula
Current Assets & Deferred outflows = Current Liabilities & Deferred inflows
41
General Fund Balance Sheet
1. Assets 2. Liabilities 3. Fund Balance: NU CARR * Current items only* * No fixed assets & long term debt*
42
General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance
1. Revenues 2. Expenditures 3. Other Financing Sources & Uses: transfers & bond proceeds 4. Special Items *No depreciation expense*
43
Special Revenue Fund - revenues and expenditures
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
Special Revenue Fund Statement of Revenue, Expenditures, and Changes in Fund Balance
1. Revenues 2. Expenditures 3. Other Financing Sources & Uses: transfers & bond proceeds 4. Special items
45
Debt Service Fund revenue sources
1. Interfund transfers Dr. Cash Cr. Interfund transfer from fund 2. Income from investment Dr. Cash Cr. Revenue - investment income
46
Debt Service Fund expenditures
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
Debt Service fund balance sheet
1. Assets 2. Liabilities 3. Fund Balance: NU CARR
48
Debt Service fund and interest note
You record it when you pay; do not accrue it for governmental
49
Journal entries to record capital grants from Capital project fund
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
Capital projects fund bond proceeds
1. Reported as other financing source | 2. No amortization of bond premium or discount
51
Bond journal entries for capital projects fund
``` 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
Expenditure and encumbrance for capital projects fund
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
Note to determine where public restricted funds are recorded
1. Principal & interest = special revenue fund | 2. Interest only = permanent fund
54
Internal Service Fund sources of revenue
1. Restricted grants that are recognized when spent 2.Operating revenues from services Dr. Cash Cr. Billings 3. Nonoperating revenue like interest
55
Establishing internal service fund
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
Order of presentation for statement of Revenues, Expenses, and changes in net position - INCASET
``` Income from operating Nonoperating income & expense Capital contributions Additions to endowments Special items (unusual or infrequent) Extraordinary items Transfers ```
57
Establishing enterprise fund
Capital contribution Dr. Capital assets Cr. Capital contributions Bond issue Dr. Cash Cr. Long term bonds payable
58
Fiduciary funds and cash flows
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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