Governmental Accounting Flashcards by Mikaela Carmichael

What do Government funds not have?

Profit motive
income statements
matching principle
accrual method

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Operational accountability

Timeliness, consistency, comparability

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What financials represent operational accountability

Government wide financials

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What type of accrual does government wide financials use?

full accrual

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fiscal accountability

government shows that they used the money in the current period for the purpose that they were supposed to use the money for and that the resources were not diverted to other needs

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what financials demonstrate fiscal accountability

fund based financials

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what accrual basis does fund based financial use?

modified accrual

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What is budgetary accounting used for?

Controlling spending

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What is activity accounting used for?

flow of current financial resources and has an annual budgetary focus

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What is encumbrance accounting used for?

Recording purchase orders and is designed to monitor spending for increased budgetary control.

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What funds is budgetary used for?

General
Revenue (special fund)
Service (debt) fund
Projects (capital) fund
Permanent fund

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T/F budgets are based on actual revenues and appropriations

F - based on estimated revenue and appropriations

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What are the main sources of government revenue?

Taxes and fines/penalties
Debt proceeds
Interfund transfers

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What account does the difference between estimated revenues and appropriations go to at the beginning of the year?

Budgetary control

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What is the journal entry for budgetary control?

Dr. Estimated revenue control
Dr. budgetary control (negative/deficit)
Cr. Appropriations control
Cr. budgetary control (positive/surplus)

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What happens to the budgetary control account at the end of the year?

budget is reversed and closed using the same amounts that were recorded at the beginning of the period +/- any amendments

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What is the journal entry to close the budgetary control account?

Dr. Appropriations control
Dr. Budgetary control (positive)
Cr. Estimated revenue control
Cr. Budgetary control (negative)

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T/F budgetary accounts and actual activity are included in the year end adjusting entry

F - actual activity is closed out separately

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What are the requirements used used for governmental fund financial statements?

Time and eligibility

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Non-exchange transactions

entity gives/receives value without directly receiving/giving equal value in return

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Derived tax revenue

taxes imposed on exchange transactions or wealth such as commercial sales or taxpayer income

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Imposed non-exchange revenue

taxes imposed on non-exchange transactions such as fines or property taxes

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When are receivables recorded?

When government has an enforceable legal claim

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What is the journal entry to record accrual of real property taxes

Dr. Real property tax receivable
Cr. Revenue
Cr. Allowance for uncollectible tax

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What is the journal entry to record the collection of property taxes

Dr. Cash Cr. Real property tax receivable - current

What is the journal entry to reclassify receivables as delinquent

Dr. Property tax receivable - delinquent Cr. real property tax receivable - current

What is the journal entry to reclassify current allowance for uncollectible taxes and adjust revenue?

Dr. Revenues Dr. Allowance for uncollectible tax - current Cr. Allowance for uncollectible tax - deliquent

When are revenues recognized?

In the period in which resources must be used and revenue is measurable and available

When is revenue measurable and available?

Collection periods doesn't exceed 60 days after year end

What are expenditures?

capital purchases, debt service payments, and operating expenditures

purchase method

record an expenditure when purchased and record a current asset and non-spendable fund balance at year end for any items not used

consumption method

record a current asset when purchased and record an expenditure as consumed during the period

Journal entry to record buying an item under Purchase vs Consumption

Purchase Dr. Expenditure Cr. Vouchers Payable Consumption Dr. Supplies inventory Dr. Payable

Journal entry to record use of an item under Purchase vs Consumption

Purchase None Consumption Dr. Expenditure Cr. Supplies

Journal entry to record on hand at year end under Purchase vs Consumption

Purchase Dr. Supplies Cr. Nonspendable fund balance Consumption None

How are expenditures classified?

According to the appropriate fund

Function or program classification

provides information on the overall purchase of the expenditures

Function

major services

Program

activities, operations, organizational units

Which of the following are function vs program Elderly services highways public safety drug addiction

Elderly services - P highways - F public safety - F drug addiction - P

Organizational unit

organizational structure of the governmental entity

current expenditures

benefit the current fiscal period

capital outlays

presumed to benefit both the present and the future

debt service

prior fiscal periods

intergovernmental

one governmental unit transfers resources to another

Which funds use modified accrual vs full accrual?

governmental funds use modified accrual proprietary and fiduciary funds use full accrual

Other financing sources

proceeds from long-term debts are recorded in governmental funds

What is the journal entry to record a lease receivable (lessor)

Dr. Lease receivable (full amount) Cr. Revenue Cr. Deferred inflows of resources Dr. Interest receivable Cr. Interest revenue

Journal entry to record the lease (lessee)

Dr. Right of use asset Cr. Lease liability

Journal entry to record lease payments (lessee)

Dr. lease liability Dr. Interest expense Cr. Cash Dr. Amortization expense Cr. Accumulated ROU

Journal entry for recording short term leases for GRSPP funds vs SE-CIPPOE funds (lessor)

Dr. Receivable Cr. Revenue

Journal entry for recording contracts that transfer ownership (lessor)

GRSPP Dr. Receivable Cr. current revenue and deferred inflow SE-CIPPOE Dr. Receivable Cr. Revenue

journal entry for leases other than short term vs contracts that transfer ownership (lessor)

GRSPP Dr. Receivable Cr. current revenue and deferred inflow SE-CIPPOE Dr. Receivable Cr. Deferred inflow

Journal entry for recording short term leases for GRSPP funds vs SE-CIPPOE funds (lessee)

Dr. Lease expense Cr. Cash/payable

Journal entry for recording contracts that transfer ownership (lessor)

GRSPP Dr. Capital outlay expenditure Dr. Other financing source SE-CIPPOE Dr. Capital asset acquired Cr. Lease liability

journal entry for leases other than short term vs contracts that transfer ownership (lessee)

GRSPP Dr. Capital outlay expenditure Dr. Other financing source SE-CIPPOE Dr. Right of use asset Cr. Lease liability

What requirements are unique to voluntary non-exchange transactions?

contingency

what is used to record the details of budgetary accounts, and encumbrances

subsidiary ledger

what is the journal entry to record an encumbrance?

Dr. Encumbrance Cr. Budgetary control

what is the journal entry to record actual expenditure?

Dr. Expenditures Cr. Vouchers payable

T/F encumbrances are generally used for recurring expenditures

F - recorded for spending/appropriations control purposes

how are encumbrances recorded if they are outstanding at year end?

Reverse the journal entry and include outstanding encumbrances in an appropriate fund balance classification such as "fund balance, committed" or "fund balance, assigned"

T/F outstanding encumbrances at year end will be carried forward

What is the journal entry to close budgetary accounts related to outstanding purchase orders

Dr. Unassigned fund balance Cr. Fund balance, committed

how are budget, activity, and encumbrances closed

Budget closed for same amount as booked Activity is closed for actual amount Encumbrance is reversed so same amount as booked

Interfund activity

represents the flow of resources between funds and between the primary government and its component units

Reciprocal interfund activity

exchange type transactions

Nonreciprocal interfund activity

non exchange type transactions

Which are reciprocal vs nonreciprocal activities Interfund loans interfund transfers Interfund reimbursements Interfund services provided and used

Interfund loans - R interfund transfers - NR Interfund reimbursements - NR Interfund services provided and used -R