Governmental accounting

Question 1

What are the financial reporting objectives of governmental accounting?

Answer 1

Fulfill the government duty to be publicly accountable
Financial control of public resources
Compliance with legal restrictions
Evaluate the operating results of a government entity
Assess the government service provided, and its ability to meet obligations

Question 2

What leads to the use of fund accounting by governmental organization?

Answer 2

Entities must be segregated from other governmental resources. A self balancing set of accounts called a fund is established for each entity, so it can track revenues and expenditures (financial control) and monitor compliance with specific legal restrictions

Question 3

Governmental funds - modify, accrue accounting

Answer 3

General
Special revenue
Capital Projects
Debt Service
Permanent

Question 4

Proprietary funds - accrual accounting

Answer 4

Internal service
Enterprise

Question 5

Fiduciary funds – accrual Accounting,

Answer 5

Pension trust
Investment trust
Private purpose trust
Custodial
Use the flow of economic resources, measurement, focus, and accrual accounting

Question 6

Proprietary – businesslike - accrual

Answer 6

1. Internal service (goods, and services to other funds.)
2. Enterprise (Goods and services to users for fees)

Use the flow of economic resources, measurement, focus, and accrual accounting

Question 7

Governmental funds - (general, special revenue, debt service, capital projects, and permanent trust)

Answer 7

Use the current financial measurement, focus, and the modified accrual basis of accounting

Question 8

What is the orientation of accounting and reporting for all proprietary funds of a governmental unit?

Answer 8

Is similar to that of a private business.
The accrual basis of accounting is used and
the measurement focuses on income, determination, financial and cash flow.

Question 9

Which of the following funds of the governmental unit records depreciation?

Answer 9

Depreciation expenses reported in the government, wide statement of activities and the proprietary funds -
Enterprise and internal service funds, and in the fiduciary funds, it has never reported in a governmental fund

Question 10

How does a local government report expenses on its government wide statement of activities?

Answer 10

By function
Categorized as either a governmental activity, or a business type activity

Question 11

What is economic resource measurement?

Answer 11

Requires reporting on all resources obtained, and obligations incurred both current and long-term
Accrual accounting

Question 12

What is current financial measurement?

Answer 12

It has a single period focus that measures the extent to which financial resources obtained during an accounting period are sufficient to cover, cost and occur during that same period
Modify accrual accounting
Provides financial accountability by preventing future taxpayers from being responsible for current costs

Question 13

What fund accounts would there be encumbrances?

Answer 13

Governmental funds because they have a budgetary focus
Capital projects, special, revenue, and general funds

Question 14

What are the three sections of a governmental annual comprehensive financial report (ACFR)?

Answer 14

Introductory
Financial
Statistical

Question 15

Enterprise fund characteristics

Answer 15

-laws and regulations require that the cost of providing services be covered through fees
- Pricing policies establish the cost of providing service will be recovered through fees
-Fund is financed with debt secured entirely by a pledge of net revenue from fees and charges

Question 16

What is the permanent fund?

Answer 16

It is a governmental fund
The permanent fund is used to account for resources that are restricted so that only earnings not principal may be expended for support of the government activities