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
how many types of funds in Governmental Accounting?
1) governmental
2) Proprietary
3) Fiduciary
methods of accounting in Governmental Accounting?
1) Modified accrual accounting Most funds are using this method*
2) accural accounting
what is modified Accrual Accounting?
- Focus of financial reporting is financial position & flow of resources
- revenues are recognized when they become AVAILABLE & MEASURABLE
-Expenditures are recorded when goods or services are obtained
Expenditures classified by OBJECT, FUNCTION, OR CHARACTER
what is CAFR (Comprehensive Annual Financial Report)?
CAFR has 5 components:
1) management discussion & analysis MD&A (presented before financial statements)
- government wide financial statements GWFS
- fund financial statements
- notes to financial statements
- required supplementary information -presented after financial statements and notes
What is a component unit?
it is a legally separate organization for which the elected officials of a primary government are financially accountable.
What is MD&A?
Management Discussion & Analysis introduces basic financial statements and provided analytical overview of government’s financial activities.
-comparison of CY to LY
overall financial position and operations, balances and truncations in individual funds, budget variances
-facts, decisions, or conditions
What is Government Wide Financial Statements?
1) Statement of Net Position
2) Statement of Activities
what is the Characteristics of Government Wide Financial Statements?
- Derived Tax Revenue
- Imposed non-exchange revenus
- Government mandated non-exchange transactions
- voluntary non-exhange transactions
What is Derived Tax Revenue?
imposed on exchange transactions recognized as asset &revenues when exchange occurs
what is imposed non exchange revenues?
Imposed on non government agencies recognized as asset when government has enforceable claim & as revenue when use the resources required or permitted.
what is government mandated non exchange transactions?
it provided by one level of government for another recognized as asset and revenue (or liability & expense) when all eligibility requirements met
what is voluntary non exchange transactions
it recognized similarly to government mandated non exchange truncations
what is in Statement of Net Position (under government wide financial statements) ?
3 categories of net position:
1) net assets invested in capital assets, met of related debt: all capital assets, restricted assets, net of depreciation and reduced by related debt
2) Restricted net position
3) unrestricted net position.
how to cal net position?
Assets + Deferred Outflows of Resources - Liabilities - Deferred inflows of Resources = NET POSITION.
What is Statement of Activities?
self financing activities distinguished from those drawing from general revenues
- net expense or revenue
- relative burden
what is included in Governmental funds?
1) General fund
2) Special revenue funds
3) Capital Projects funds
4) Debt service funds
5) Permanent funds
what is included in proprietary funds?
1) enterprise funds
2) internal service funds
what is included in fiduciary funds?
1) Pension and other employee benefit trust funds
2) Investment trust funds
3) Private purpose trust funds
4) Agency funds
what are the fund structure for governments?
1) governmental funds
2) Proprietary funds
3) fiduciary funds
what are the funds in Proprietary funds?
there are 2 types (SE)
1) internal SERVICE Funds
2) enterprise funds
what is fiduciary funds
are presented individually as fund clinical statements, they are:
1)
what is governmental funds?
GRAsPP:
1) General funds
2) special Revenue funds
3) debt service fun….
4) capital Projects funds
5) Permanent ENT
Current financial Resource
what is proprietary funds ?
SE 1) internal Service fund 2) Enterprise funds FUll accural accounting (basis of accounting) economic resources measurement focus
what is fiduciary (trust) funds?``
***FUll Accural*** PAPI 1) Pension (and other employee 2) Agency Trust Funds 3) Private Purpose Trust Funds 4) Investment Trust funds
Governmental funds are “MAC- GRaSPP
Modified
Accrual Accounting
Current financial resources measurement focus
GRaSPP
Proprietary and Fiduciary funds have “SPACE”
SE PAPI Accural accounting Carry fixed asset and long term debt Economic resource measurement focus
