Governmental Accounting Flashcards
In a Governmental Statement of Cash Flow, what is included in the Cash Flow from Operating Activities?
- Receipts from customers or employers
- Payments to suppliers
- Payments to employees.
- Loan activities not intended as investments but as program loans made to fulfill a governmental responsibility (e.g., student loans)
- Interfund services provided and used
- Selling goods or services.
In a Governmental Statement of Cash Flow, what is included in the Cash Flow from Investing Activities?
- Purchase of investments
- Proceeds from maturity and sale of investments
- Earnings on investments.
- Making and collecting loans (other than program loans)
- Acquiring and disposing of debt and equity instruments
- Cash interest and dividends received as returns on nonprogram loans and equity securities.
In a Governmental Statement of Cash Flow, what is included in the Cash flows from noncapital or capital and related financing activities?
- Anything that has to do with bonds (i.e. Proceeds from, Retirement, etc.)
- Payment to advance refund escrow agent
- Interest paid
- Proceeds from notes payable and commercial paper
- Principal paid on notes payable and commercial paper. Financing cash flows are reported in separate categories.
In a Governmental Statement of Cash Flow, what is Noncapital Financing Activities?
Cash interest paid to lenders other than to acquire, construct, or improve capital assets is a cash outflow for noncapital financing activities
Examples include
- Borrowings (and repayments of debt, including interest) for purposes other than acquiring, constructing, or improving capital assets.
- Cash in flows include debt proceeds, grants and subsidies, property and other taxes, and amounts received from other funds.
In a Governmental Statement of Cash Flow, what is classified as Capital and Financing Activities?
- Receipts of grants, contributions, and proceeds of sale of capital assets
- Borrowings (and repayments of debt, including interest).
- Activities that involve
- Acquiring, constructing, or improving capital assets;
- Acquiring and disposing of capital assets used to provide goods or services
- Paying for capital assets obtained on credit.
In a Governmental Statement of Cash Flow, what is Noncash Investing, capital and financing?
- Acquisition of assets by assuming directly related liabilities is a noncash investing, capital, and financing activity.
- An example is purchasing a building by giving a mortgage to the seller.
Chapter 17: Governmental Accounting
In a Governmental Statement of Cash Flow, what is an Investing Activity?
Cash interest and dividends received as returns on nonprogram loans, equity securities, etc., are inflows from investing activities.
Chapter 17: Governmental Accounting
In Governmental Accounting, what are the components of the Comprehensive Annual Financial Report (CAFR)?
“_I_ndiana _F_arms _S_oybeans”
- Introductory Section
- Financial Section
- Statistical Section
Chapter 17: Governmental Accounting
What is included in the Introductory Section of the CAFR?
“_L_ots _O_f _N_utrients”
- Letter of Transmittal
- Organizational Chart
- Names of Principal Officers
Chapter 17: Governmental Accounting
What is included in the Financial Section of the CAFR?
“_M_any _B_arren _F_ields _S_hould _N_ever _B_e _B_rown”
- MD&A and Auditor’s Report
- Basic Government-Wide Financial Statements
- other _S_chedules and _S_tatements
- Notes
- Budgetary Schedules
Chapter 17: Governmental Accounting
What is included in the Statistical Section of the CAFR?
“_F_armers _R_evenues _D_ecrease _D_uring _O_ctober”
- Financial Trends
- Revenue Capacity
- Debt Capacity
- Demographics
- Operating Information
Chapter 17: Governmental Accounting
Where is the Required Supplementary Information reported in the CAFR?
The Required Supplementary Information (RSI) is a sepearte section of the CAFR.
It is reported after the Notes Section to the basic financial statements.
Chapter 17: Governmental Accounting
What is included in the RSI?
(1) schedules
(2) statistical data
(3) budgetary comparison schedules
(4) other information that is an essential part of financial reporting
Chapter 17: Governmental Accounting
What type of budgetary comparison schedules are included in the RSI of the Government CAFR?
Budgetary comparison schedules must be reported for the general fund and each major special revenue fund with a legally adopted annual budget.
The schedule includes
(1) the original budgets, that is, the first complete appropriated budgets;
(2) the final appropriated budgets
(3) the actual inflows, outflows, and balances. This information treats the budgetary basis and the GAAP basis for the general fund (a governmental fund) the same (the modified accrual basis).
Chapter 17: Governmental Accounting
What is reported in the basic financial statements in the CAFR?
“_G_overnment is _F_or _N_erds”
- Government-Wide Financial Statements
- Fund Financial Statements
- Notes to the Financial Statements
Chapter 17: Governmental Accounting
What are the 5 Categories of Fund Balances in Government Accounting?
U-NARC
- Unassigned Fund Balance
- Non-Spendable Fund Balance
- Assigned Fund Balance
- Restricted Fund Balance
- Committed Fund Balance
Chapter 17: Governmental Accounting
What is the Unassigned Fund Balance?
- Unassigned fund balance resources associated with spendable assets that are not restricted, committed or assigned.
- Unassigned fund balance is a residual equity classification of the general fund
- Only the general fund should have a positive unassigned fund balance.
Chapter 17: Governmental Accounting
What is the Non-Spendable Fund Balance?
- Includes amounts that either
- Inventory, Prepayments or long-term loans that is not spendable; or
- Must be kept intact (i.e. principal of a permanent fund)
- Assets owned by the special revenue fund are examples of a non-spendable fund balance.
Chapter 17: Governmental Accounting
What is the Assigned Fund Balance?
- Represents the next monies to be committed but have not formally been committed yet.
- The government intends to obligate those monies.
- Outstanding encumbered amounts at year end are reclassified from unassigned fund balance to committed or assigned fund balance (as appropriate)
- An example is when the government expects a deficit for the next fiscal year.
Chapter 17: Governmental Accounting
What is the Restricted Fund Balance?
- Funds that may spent only for a specific purpose that is established by
- A constitutional mandate
- Enabling Legislation; or
- An external provider (i.e. Those who have donated assets to the government.)
- Examples of a restricted fund balance include
- Debt Service Fund resources that are subject to the terms and conditions of a bond indenture
- Bond Agreement where the proceeds are to be used for a specific expense or project.
- Capital Service Fund
Chapter 19: Governmental Accounting – Reporting
In state and local governmental financial statements, what is the difference between special items and extraordinary items?
In state and local government financial statements
Special items are transactions that are within the control of management and are either unusual in nature or infrequent in occurrence.
Extraordinary items are transactions that are both unusual in nature and infrequent in occurrence.
Chapter 19: Governmental Accounting – Reporting
What is the purpose of the Statement of Revenues, Expenditures and Changes in Fund Balance in Governmental Accounting?
The purpose of the Statement of Revenues, Expenditures and Changes in Fund Balance report inflows, outflows and balances of current financial resources for each major fund, nonmajor funds in the aggregate, and the total column.
Chapter 19: Governmental Accounting – Reporting
What is reported as Other Financing Sources and Uses in the Statement of Revenues, Expenditures and Changed in Fund Balance in Governmental Accounting?
- The face amount of long-term debt
- Issuance of a premium or a discount
- Some payments to escrow agents for bond refundings
- Interfund Transfers
- Sales of Capital Assets (unless the sale is a special item)
Chapter 19: Governmental Accounting – Reporting
What are the categories in a Statement of Revenues, Expenditures and Changed in Fund Balance in Governmental Accounting?
“Oh! REOS”
- Revenues (Classified by Major Source)
- Expenditures (Classified by, at minimum, function)
- Other Financing Sources (Uses)
- Special Item
Chapter 19: Governmental Accounting – Reporting
What are the components in the Statement of Net Position in Government-Wide Reporting?
Assets + Deferred Outflows of Resources
(Liabilities + Deferred Inflows of Resources)
Net Position
Chapter 19: Governmental Accounting – Reporting
What are the components of Net Position?
- Net investment in capital assets, includes unrestricted and restricted capital assets
- Restricted Net Position
- Unrestricted Net Position
Chapter 19: Governmental Accounting – Reporting
What is included in Net Investment in Capital Assets?
Capital Assets that are net of
- Accumulated depreciation
- Related liabilities and deferred inflows and outflows of resources
Chapter 19: Governmental Accounting – Reporting
What is included in Restricted Net Position?
- Restricted net position includes restricted assets minus related liabilities and deferred inflows of resources.
- The restrictions are imposed by external entities (creditors, grantors, or other governments) or by law (constitutional provisions or enabling legislation).
- Restricted net position is not always equal to restricted fund balance in the governmental funds financial statements.
Chapter 19: Governmental Accounting – Reporting
What is included in Unrestricted Net Position?
Unrestricted net position includes items that may be internally committed or assigned (designated).
These commitments and assignments are not reported on the face of the statements.
Unrestricted net position is the net of
- Assets
- Deferred inflows and outflows of resources
- Liabilities not included in the other components of net position.
Chapter 19: Governmental Accounting – Reporting
How are fiduciary activities reported in the Government-Wide Statements?
Funds that meet the criteria for fiduciary activities are not reported as internal balances in the Government-Wide Statements.
The activities are reclassified as a payable to, or receivables from, external parties.
Chapter 19: Governmental Accounting – Reporting
In the Statement of Activities in the Government-Wide Financial Statements, what is included as Program Revenues?
- Service charges because the users benefit from using the service. (i.e. Building permits, garbage collection, and dog licenses).
- Program-specific operating grants and contributions
- Program-specific capital grants and contributions
Chapter 19: Governmental Accounting – Reporting
How is depreciation reported in the Statement of Activities in the Government-Wide Financial Statements?
- Depreciation specifically identifiable with a function is a direct expense.
- Depreciation of capital assets shared by functions (i.e. a building that houses the tax assessor, inspector and election supervisor) is allocated as a direct expense.
- Depreciation of capital assets that serve all functions (i.e. City Hall) is not required to be included in direct expenses of the functions. It may be displayed on a separate line in the statement of activities or as part of the general government function. It may or may not be allocated.
- Depreciation of infrastructure assets is not allocated to other functions.
Chapter 19: Governmental Accounting – Reporting
How are General Revenues reported in the Statement of Activities in the Government-Wide Financial Statement?
- General revenues are reported at the bottom of the statement of activities to determine the change in net position for the period.
- General revenues are not required to be reported as program revenues.
- They are reported separately after total net (expense) revenue for all functions. All taxes, including those levied for a special purpose, are general revenues.
Chapter 19: Governmental Accounting – Reporting
What is the journal entry to recognize the transfer in the governmental activities?
Governmental Activities Column:
DR: The transfer (an other financing use)
CR: Cash
Business-Activities Column:
DR: Cash
CR: Transfer
Chapter 19: Governmental Accounting – Reporting
How is the Government Activities calculated in the Government-Wide financial Statement?
- Governmental Activities are accounted for under the modified accrual basis of account and it needs to be reconciled from modified accrual to full accrual
- The conversion is performed at the total government summary fund level, not at the individual fund level.
- Reconciled Governmental Activities
- Governmental Fund Balance, excluding budgeted amounts
- Add: Internal Service Fund Net Position
- Add: Capital Assets Used in Governmental Activities
- Add: Principal Payments Used in Governmental Activities
- Subtract: Accumulated Depreciation on Capital Assets Used in Governmental Activities
- Subtract: Long term debt obligations issued to finance governmental projects
- Subtract: Book value of capital assets old during the year.
- Ignore: Debt Service Expenditures – Interest because Since the interest is an expenditure under modified accrual, the amount was already deduction.
- Ignore: Change in net position of fiduciary funds
Chapter 19: Governmental Accounting – Reporting
What is reported separately at the bottom of the statement of activities in the Government-Wide Financial Statements?
The following are reported separately at the bottom of the statement of activities:
- Contributions to endowments
- Contributions to permanent fund principal
- Transfers between governmental and business-type activities
- Special and extraordinary items.
Chapter 19: Governmental Accounting – Reporting
What does the statement of revenues, expenses, and changes in fund net position of proprietary funds reports?
- Operating revenues, expenses, and income (loss)
- Nonoperating revenues and expenses
- Revenues from capital contributions and additions to endowments
- Special and extraordinary items
- Transfers
- Change in net position
- Ending net position
Chapter 19: Governmental Accounting – Reporting
What is the criteria to report activities as Enterprise Funds?
- The activity is financed with debt, and the only security is a pledge of the activity’s net revenues from fees and charges.
- The activity’s costs (including capital costs) of providing services are legally required to be recovered from fees and charges, not taxes or similar revenues.
- The activity’s pricing policies set fees and charges to recover its costs (including capital costs).
