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CPA FAR > Governmental Accounting > Flashcards

Governmental Accounting Flashcards

1
Q

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What are the three major types of funds in governmental accounting?

A

Governmental, Proprietary, Fiduciary

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2
Q

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Which two accounting bases are used in governmental accounting?

A

Accrual basis - current economic resources focus (revenues recognized when earned)

Modified accrual basis - current financial resources focus (revenues recognized when available and measurable)

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3
Q

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What is a budget appropriation?

A

The highest amount allowed for a particular expenditure under a budget.

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4
Q

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What is an encumbrance?

A

Records purchase and reserves it for the encumbrance.

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5
Q

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What is the opening budgetary entry?

A

Dr Estimated Revenues Control
Cr Appropriations Control
Dr/Cr Budgetary Fund Balance (plug)

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6
Q

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What is the closing budgetary entry?

A

Dr Appropriations Control
Dr/Cr Budgetary Fund Balance (plug)
Cr Estimated Revenues Control

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7
Q

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What are the types of governmental funds?

A 
General Fund
Special Revenue Fund
Permanent Fund
Capital Projects Fund
Debt Service Fund
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8
Q

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What is a General Fund?

A

The operating fund of the governmental unit

Records Significant Revenues: Taxes; Tickets; Fines; Licenses

Records Significant Expenditures: Police; Education; Fire Dept

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9
Q

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What is a Special Revenue Fund?

A

Restricted for a specific purpose such as street repair.

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10
Q

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What is a Permanent Fund?

A

Legally restricted fund; where only earnings can be used to fund programs.

Principal remains intact.

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11
Q

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What is a Capital Projects Fund?

A

Used to acquire and build facilities.

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12
Q

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What is a Debt Service Fund?

A

Handles repayment of long-term debt and related interest.

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13
Q

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Which fund statements are issued in Governmental Accounting?

A

Balance Sheet

Statement of Revenues; Expenditures; and Changes in Fund Balance

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14
Q

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When is Revenue recorded in Governmental Accounting?

A

When it is BOTH available and measurable; regardless of when it is spent.

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15
Q

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What is Derived Tax Revenue?

A

Money collected from people doing things:

Sales tax (buying cars) or income tax (people working)

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16
Q

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What is Imposed Tax Revenue?

A

Tax assessed just because things exist

Example: property tax on a car (even if it’s never driven); real estate tax

Recorded as a revenue when BUDGETED.

Estimated uncollectible property tax revenues don’t offset revenues; so don’t net them.

17
Q

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What are the types of Proprietary Funds?

A

Internal Service Funds - to serve the needs of other governmental units (i.e. motor pool)

Enterprise Funds - provide goods or services to external users (i.e. post office)

18
Q

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What are the Fund Balance Types?

A 
Restricted - Restricted by Contributor 
 Committed - Restricted by Government
 Assigned - Intended for a purpose
 Unassigned - Available to be spent
 Non-spendable - Not in a spendable state
19
Q

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What are the types of Fiduciary Funds?

A

Agency Fund - government acts as an agent or custodian

Pension Trust Fund - Government is a trustee for a pension plan

Investment Trust Fund - Government is a trustee over a series of investments

Private Purpose Trust - Trust that benefits various individuals and entities

20
Q

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How are Assets & Liabilities presented on the Statement of Net Position?

A

Assets (Current & Non-Current)
Deferred Outflows of Resources
Liabilities (Current & Non-Current)
Deferred Inflows of Resources

21
Q

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How are Capital Assets shown on a governmental Statement of Net Assets?

A

They are shown net of debt

Asset Cost - Accumulated Depreciation - Asset Liabilities : Net Assets

22
Q

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How is infrastructure reported on a governmental Statement of Net Assets?

A

Modified approach:

Reported at cost; no accumulated depreciation

23
Q

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How is a Statement of Net Assets divided?

A

Into Governmental Activities and Business Activities

24
Q

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How are activities presented in a Statement of Activities?

A

They are divided by function

If the activities of a component are distinguishable from the rest of the governmental entity; then discreet presentation is required

If the activities of the component cannot be identified and separated from the rest of the governmental activities; then blended presentation is warranted.

Component units are reported in the Entity-Wide Financial Statements and not the Fund Financial Statements.

25
Q

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What is the primary objective of governmental accounting?

A

To provide information that is useful and benefits a wide range of users including:

Costs of services provided

Sufficiency of revenues to cover costs

Financial position of entity

CPA FAR (21 decks)

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