Governmental Accounting Flashcards
What are the three major types of funds in governmental accounting?
Governmental, Proprietary, Fiduciary
Which two accounting bases are used in governmental accounting?
Accrual basis - current economic resources focus (revenues recognized when earned)
Modified accrual basis - current financial resources focus (revenues recognized when available and measurable)
What is a budget appropriation?
The highest amount allowed for a particular expenditure under a budget.
What is an encumbrance?
Records purchase and reserves it for the encumbrance.
What is the opening budgetary entry?
Dr Estimated Revenues Control
Cr Appropriations Control
Dr/Cr Budgetary Fund Balance (plug)
What is the closing budgetary entry?
Dr Appropriations Control
Dr/Cr Budgetary Fund Balance (plug)
Cr Estimated Revenues Control
What are the types of governmental funds?
General Fund Special Revenue Fund Permanent Fund Capital Projects Fund Debt Service Fund
What is a General Fund?
The operating fund of the governmental unit
Records Significant Revenues: Taxes; Tickets; Fines; Licenses
Records Significant Expenditures: Police; Education; Fire Dept
What is a Special Revenue Fund?
Restricted for a specific purpose such as street repair.
What is a Permanent Fund?
Legally restricted fund; where only earnings can be used to fund programs.
Principal remains intact.
What is a Capital Projects Fund?
Used to acquire and build facilities.
What is a Debt Service Fund?
Handles repayment of long-term debt and related interest.
Which fund statements are issued in Governmental Accounting?
Balance Sheet
Statement of Revenues; Expenditures; and Changes in Fund Balance
When is Revenue recorded in Governmental Accounting?
When it is BOTH available and measurable; regardless of when it is spent.
What is Derived Tax Revenue?
Money collected from people doing things:
Sales tax (buying cars) or income tax (people working)
What is Imposed Tax Revenue?
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.
What are the types of Proprietary Funds?
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)
What are the Fund Balance Types?
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
What are the types of Fiduciary Funds?
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
How are Assets & Liabilities presented on the Statement of Net Position?
Assets (Current & Non-Current)
Deferred Outflows of Resources
Liabilities (Current & Non-Current)
Deferred Inflows of Resources
How are Capital Assets shown on a governmental Statement of Net Assets?
They are shown net of debt
Asset Cost - Accumulated Depreciation - Asset Liabilities : Net Assets
How is infrastructure reported on a governmental Statement of Net Assets?
Modified approach:
Reported at cost; no accumulated depreciation
How is a Statement of Net Assets divided?
Into Governmental Activities and Business Activities
How are activities presented in a Statement of Activities?
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.
What is the primary objective of governmental accounting?
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
What Financial Statements are required for Defined Benefit Pension plans?
Statement of Fiduciary Net Position and Statement of Changes in Fiduciary Net Position
What are the components of the Statement of Fiduciary Net Position for Defined Benefit Pension Plans?
Assets; Deferred Outfows; Liabilities; Deferred Outflows; Fiduciary Net Position
What are the components of the Statement of Changes in Fiduciary Net Position for Defined Benefit Pension plans?
Additions (Contributions and Net Investment Income) - Deductions (Benefits Payments and Admin Expense) : Net Change in Fiduciary Net Position
What should be included in the Financial Statement notes for Defined Benefit Pension Plans?
Types of Benefits; Plan Member Classes; Board Information; Investment Policies and FV Determination
What is the order of presentation of line items on a Proprietary Fund’s - Statement of Revenues, Expenses, and Changes in Fund Net Position?
"INCASET" Income (operating) Nonoperating income and expense Capital contributions and Additions to endowments Special items (unusual or infrequent) Extraordinary items
How is the change in fund balance in governmental fund financial statements reconciled to the change in net position for governmental activities in the government-wide financials?
"GOES BARE" Governmental fund balance change Other financing sources Expenditure - capital outlay (net depreciation) Service (Internal) fund net income
adjustments: Basis of Accounting Additional accrued Revenues Expenses
What two types of accountability does Governmental reporting focuses on?
Operational accountability (government wide financial statements) and Fiscal Accountability (fund financial statements)
Statement of Cash Flows - Proprietary Funds
Cash Flows of Operating Activities Receipts from customers Payments to suppliers Payments to employees Internal activity (payment for services to other funds, incl payments in lieu of taxes)
Cash Flows from Noncapital Financing Activities
Operating subsidies and transfers to other funds
Proceeds/payments related to borrowing but not attributable to the acquisition, construction, or improvement of capital assets
Cash receipts/payments related to grants or subsidies not attributable to capital purposes
Property taxes not designated for capital purposes
Cash paid to other funds (other than for interfund services)
Cash Flows from Capital Financing Activities Proceeds from capital debt Capital contributions Purchases of capital assets Principal paid on capital debt Interest paid on capital debt
Cash Flows from Investing Activities
Purchase of investments
Interest and dividends
GASB 34 Government-wide financial statements require the use of what?
Economic resources measurement
and
full accrual basis of accounting
- Fiduciary funds are excluded and the components are included
Government-wide financial statements’ Statement of Activities include what Program Revenue Category types?
“SOC”
Services charges
Operating grants and contributions
Capital grants and contributions
What are primary government entities?
The primary government consists of all organizations that make up the legal government entity, and is considered the nucleus of the financial reporting entity.
- State governments
- General purpose local governments (city/county)
- Special Purpose local governments that meet all of the “SELF” criteria (the primary government reports by it”SELF”:
Seperately-Elected governing body
Legally seperate
Fiscally independent of other state and local governments
