Governmental Accounting Flashcards
What is a permanent fund?
A governmental fund used to account for resources legally restricted such that only the earnings, not the principal, may be used to support the reporting government’s own programs
Special Revenue Funds
Governmental funds used to account for the proceeds of specific revenue sources that are legally restricted to expenditure for specific purposes
What format must an enterprise fund use to report cash flow operating activities in the statement of cash flows?
Direct method
Indirect method is allowed under FASB guidance for not for profit and for profit entities only
Major Funds
These should each be shown in a separate column
Non major fund information can be combined into one column for presentation
A government entity is required to include a statement of cash flows in which of the following financial statements?
Proprietary Funds:
This comprises of enterprise funds which is most similar to businesses
What are the financial statements for Proprietary funds?
Statement of Net Position
Statement of Revenues, Expenses, and Changes in Fund Net Position
Statement of Cash Flows
Proprietary Funds are:
Enterprise funds
Internal service funds
Proprietary Funds accounting equation:
Assets + Deferred outflows of resources - Liabilities - Deferred inflows of resources = Net position
A city council designates funds in the enterprise fund for future equipment replacement. The enterprise fund should report this as:
a restricted component of net position.
a net investment in capital assets.
a designated component of net position.
an unrestricted component of net position.
Unrestricted net position is defined by exclusion. If an item is not classified as restricted or a capital asset, then it is unrestricted. While future equipment will be a capital asset, it is not currently a capital asset.
