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FAR > Governmental Accounting > Flashcards

Governmental Accounting Flashcards

1
Q

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

A

Governmental, Proprietary, Fiduciary

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2
Q

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

What is a budget appropriation?

A

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

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4
Q

What is an encumbrance?

A

Records purchase and reserves it for the encumbrance.

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5
Q

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

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

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

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

What is a Special Revenue Fund?

A

Restricted for a specific purpose such as street repair.

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10
Q

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

What is a Capital Projects Fund?

A

Used to acquire and build facilities.

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12
Q

What is a Debt Service Fund?

A

Handles repayment of long-term debt and related interest.

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13
Q

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

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

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

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.

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17
Q

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)

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18
Q

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

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19
Q

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

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20
Q

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

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21
Q

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

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22
Q

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

A

Modified approach:

Reported at cost; no accumulated depreciation

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23
Q

How is a Statement of Net Assets divided?

A

Into Governmental Activities and Business Activities

24
Q

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

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

26
Q

What Financial Statements are required for Defined Benefit Pension plans?

A

Statement of Fiduciary Net Position and Statement of Changes in Fiduciary Net Position

27
Q

What are the components of the Statement of Fiduciary Net Position for Defined Benefit Pension Plans?

A

Assets; Deferred Outfows; Liabilities; Deferred Outflows; Fiduciary Net Position

28
Q

What are the components of the Statement of Changes in Fiduciary Net Position for Defined Benefit Pension plans?

A

Additions (Contributions and Net Investment Income) - Deductions (Benefits Payments and Admin Expense) : Net Change in Fiduciary Net Position

29
Q

What should be included in the Financial Statement notes for Defined Benefit Pension Plans?

A

Types of Benefits; Plan Member Classes; Board Information; Investment Policies and FV Determination

30
Q

how many types of funds in Governmental Accounting?

A

1) governmental
2) Proprietary
3) Fiduciary

31
Q

methods of accounting in Governmental Accounting?

A

1) Modified accrual accounting Most funds are using this method*
2) accural accounting

32
Q

what is modified Accrual Accounting?

A
  • 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
33
Q

what is CAFR (Comprehensive Annual Financial Report)?

A

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

34
Q

What is a component unit?

A

it is a legally separate organization for which the elected officials of a primary government are financially accountable.

35
Q

What is MD&A?

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

36
Q

What is Government Wide Financial Statements?

A

1) Statement of Net Position

2) Statement of Activities

37
Q

what is the Characteristics of Government Wide Financial Statements?

A
  • Derived Tax Revenue
  • Imposed non-exchange revenus
  • Government mandated non-exchange transactions
  • voluntary non-exhange transactions
38
Q

What is Derived Tax Revenue?

A

imposed on exchange transactions recognized as asset &revenues when exchange occurs

39
Q

what is imposed non exchange revenues?

A

Imposed on non government agencies recognized as asset when government has enforceable claim & as revenue when use the resources required or permitted.

40
Q

what is government mandated non exchange transactions?

A

it provided by one level of government for another recognized as asset and revenue (or liability & expense) when all eligibility requirements met

41
Q

what is voluntary non exchange transactions

A

it recognized similarly to government mandated non exchange truncations

42
Q

what is in Statement of Net Position (under government wide financial statements) ?

A

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.

43
Q

how to cal net position?

A

Assets + Deferred Outflows of Resources - Liabilities - Deferred inflows of Resources = NET POSITION.

44
Q

What is Statement of Activities?

A

self financing activities distinguished from those drawing from general revenues

  • net expense or revenue
  • relative burden
45
Q

what is included in Governmental funds?

A

1) General fund
2) Special revenue funds
3) Capital Projects funds
4) Debt service funds
5) Permanent funds

46
Q

what is included in proprietary funds?

A

1) enterprise funds

2) internal service funds

47
Q

what is included in fiduciary funds?

A

1) Pension and other employee benefit trust funds
2) Investment trust funds
3) Private purpose trust funds
4) Agency funds

48
Q

what are the fund structure for governments?

A

1) governmental funds
2) Proprietary funds
3) fiduciary funds

49
Q

what are the funds in Proprietary funds?

A

there are 2 types (SE)

1) internal SERVICE Funds
2) enterprise funds

50
Q

what is fiduciary funds

A

are presented individually as fund clinical statements, they are:
1)

51
Q

what is governmental funds?

A

GRAsPP:

1) General funds
2) special Revenue funds
3) debt service fun….
4) capital Projects funds
5) Permanent ENT

Current financial Resource

52
Q

what is proprietary funds ?

A 
SE
1) internal Service fund
2) Enterprise funds 
FUll accural accounting (basis of accounting)
economic resources measurement focus
53
Q

what is fiduciary (trust) funds?``

A 
***FUll Accural***
PAPI 
1) Pension (and other employee 
2) Agency Trust Funds
3) Private Purpose Trust Funds
4) Investment Trust funds
54
Q

Governmental funds are “MAC- GRaSPP

A

Modified
Accrual Accounting
Current financial resources measurement focus
GRaSPP

55
Q

Proprietary and Fiduciary funds have “SPACE”

A 
SE
PAPI
Accural accounting
Carry fixed asset and long term debt
Economic resource  measurement focus

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