Governmental Accounting Flashcards
Who governs governmental accounting?
GASB (Governmental Accounting Standards Board)
How many governmental funds are there? What are they?
5 Governmental Funds
- General
- Special Revenue
- Debt Service
- Permanent
- Capital Projects
How many proprietary funds are there? What are they?
2 Proprietary Funds
- Internal Service
- Enterprise
How many fiduciary funds are there? What are they?
4 Fiduciary Funds
- Private Purpose
- Agency
- Pension
- Investment
What basis of accounting does governmental funds use?
Modified Accrual Basis
What is the main difference between modified accrual basis and accrual basis of accounting?
- Modified Accrual Basis has a current financial resources focus only, does not carry fixed assets or long term debt on their financial statements
- Modified Accrual Basis recognizes revenues when available & measureable
What is the purpose of budgetary accounting?
It is used to control expenditures and to account for the levy of taxes to cover estimated expenditures
What does interperiod equity represent?
A balanced budget supports interperiod equity as an objective of government accountability
What basis of accounting is used for budgetary accounting?
Either the cash basis or modified accrual basis, but it must be the same basis of accounting as the adopted budget
What is a source of governmental fund revenue?
Taxes (income, sales, property and real estate) and fines/penalties
What are “other financing sources” of the governmental funds?
Debt proceeds and interfund transfers
When is governmental revenue recorded?
When measurable and available, this usually means the collection period does not exceed 60 days after fiscal year end
What is the main source of governmental fund revenue?
Non exhange transaction either derived (sales tax) or imposed (fines/property taxes)
What is an appropriation?
The highest amount allowed for an expenditure
When are property taxes recognized?
In the period in which taxes are levied
Why does the government use fund accounting?
To monitor budgets and financial control and/or legal restrictions
What is the most diffiult GAAP qualitative characteristic for a government entity to report?
Relevance
What is the measurement focus of a government type fund?
Current financial resources and financial position
What is a fund deficit reported as?
A negative unassigned fund balance
What is an encumbrance?
A commitment to purchase, occurs when issuing a purchase order
What is the calculation to determine a government fund’s amount available for use based on their budget?
Appropriations - expenditures - encumbrances = amount available for use
What is the opening budgetary journal entry?
Debit Estimated Revenues control (expected)
Credit Appropriations control (approved)
Debit/Credit Budgetary fund balance (plug)
What is the closing budgetary journal entry?
Debit Appropriations control
Debit/Credit Budgetary fund balance (plug)
Credit Estimated Revenues Control
Is there a profit incentive for Governmental Funds?
No
