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CPA - Financial Reporting > Governmental Accounting 2 > Flashcards

Governmental Accounting 2 Flashcards

1
Q

Deferred inflows & outflows

A

They are inflows & outflows of resources that occur in a period but are related to a future period

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2
Q

Deferred Inflows & outflows for Governmental fund balance sheet

A

(Current Assets + Deferred Outflows of Resources) - (Current Liabilities + Deferred Inflows of Resources) = Fund Balance

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3
Q

Deferred inflows & outflows for Proprietary Fund balance sheet

A

(Assets + Deferred Outflows of Resources) - (Liabilities + Deferred Inflows of Resources) = Net Position

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4
Q

Deferred inflows & outflows for Fiduciary Fund balance sheet

A

(Assets + Deferred Outflows of Resources) - (Liabilities + Deferred Inflows of Resources) = Net Position

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5
Q

3 Categories of Net Position

A

Net Investments in Capital Assets
Restricted
Unrestricted

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6
Q

Net Investments in Capital Assets - Net Position

A

Capital Assets net of depreciation minus outstanding debt used to construct or acquire capital assets

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7
Q

Restricted - Net Position

A

By external parties like creditors or grantors

By Constitutional provisions or enabling legislation

Held in a trust (fiduciary fund)

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8
Q

CPA exam may ask question about funds a governing board sets aside for a or a purpose (board designated funds)

A

Unrestricted

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9
Q

5 Categories of Fund Balance

A 
Nonspendable
Restricted
Committed
Assigned 
Unassigned
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10
Q

Nonspendable - Fund Balance

A

Shit isn’t in a spendable form like inventory, long term receivables, or property held for resale or government legally or contractually has to maintain the amount like a endowments in a permanent fund

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11
Q

Restricted - Fund Balance

A

Externally imposed through creditors, grantors, contributors or or laws of other governments

or by constitutional provisions or enabling legislation

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12
Q

Committed - Fund Balance

A

Amounts that are committed for a specific purpose by formal action of the government’s highest level of decision-making (e.g., by city council resolution)

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13
Q

Assigned - Fund Balance

A

Amounts that are intended by the government to be used for specific purposes that are not classified as restricted or committed

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14
Q

Unassigned - Fund Balance

A

The residual classification for the general fund for amounts not classified as restricted, committed, or assigned.

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15
Q

Negative Fund Balance Amounts

A

Should be no negative residual for restricted, committed, or assigned

If there is they reduce amounts assigned for other purposes but if there are still negative balances then they are reclassified to unassigned fund balance

So all the funds besides General have an unassigned balance then there was a negative balance

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16
Q

Unassigned fund balance note

A

General fund has to have positive balance and every other governmental fund has to have a negative balance

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17
Q

Common Reconciling Items for Fund Balances from Modified Accrual to Accrual

A 
Capital Outlays (expenditures)
Disposition (sale) of capital assets
Depreciation
Issuance of long term debt debt
Retirement of long term debt
Accrued liabilities
Interfund transfers
Internal Service funds
Expenditures vs expenses
Revenue not recognized in governmental funds
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18
Q

GASB Statement of Cashflows

A

Operating Activities
Noncapital Financing Activities
Capital related financing activities
Investing Activities

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19
Q

Notes about operating cashflows

A

Operating does not include interest revenue & expense

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20
Q

Notes about Investing Cashflows

A

Acquisition & sale of investments
Interest & dividends on such investments
Loans made & collected

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21
Q

Noncash transactions

A

Donated Assets
Capital Assets
Unrealized gains & losses on investments
Debt issued to acquire capital asset

22
Q

The Comprehensive Annual Financial Report(cafr) sections

A

Introductory
Financial
Statistical

23
Q

Introductory Section of CAFR

A

Letter of Transmittal
Organization Chart
Principal Offers
Other

24
Q

Financial Section of CAFR

A 
Independent auditors report
MD&A
Basic Financial Statements
-    Government Wide statements 
-    Financial fund statements
-    Notes
RSI
Combining Statements & individual fund statements
25
Q

Statistical Section of CAFR

A 
Financial trends
Revenue capacity 
Debt capacity 
Demographic & economic 
Operating information 
Other
26
Q

Government Wide Financial Statements

A

Statement of Net Position

Statement of Activities

27
Q

GWFS Statement of Net Position

A
  • Government wide balance sheet; does not include fiduciary funds
  • Full Accrual
  • Separate columns for Governmental funds & business funds(internal service fund eliminated) and total
28
Q

GWFS Statement of Activities

A
  • Government wide statement of operations
  • Accrual
  • Sections: Program Expenses & Revenues, Net program expense OR revenue, and General revenues
  • Separate government activities from business
  • Does not include fiduciary funds
29
Q

Typical adjustments you need to make to derive government wide financial statements

A
  • include general government capital assets & long term liabilities
  • remove interfund payable & receivables
  • eliminate internal service activities
  • convert modified accrual to accrual
  • reclassify activities between primary government & component units as internal activity
  • eliminate capital outlay expenditures & establish capital assets
  • record depreciation expense
  • remove debt principal payment expenditures & establish debt principal
  • convert interest expenditure into interest expense
  • eliminate interfund payables/receivables & transfers
30
Q

Government Fund Statements

A 
Balance Sheet(5 categories)
Statement of revenues, expenditures, and changes in fund balance
31
Q

Proprietary Fund Statements

A

Statement of Net position(3 categories)
Statement of revenues, expenses, and changes in net position
Statement of cashflows (4 categories)

32
Q

Fiduciary Fund Statments

A

Statement of fiduciary net position

Statement of changes in fiduciary net position

33
Q

Component Unit

A

Financially dependent and/or accountable to the primary government

34
Q

Blended approach for component unit

A

Component Unit’s governing body and primary government’s governing body are pretty much the same

CU primarily provides service and benefits PG exclusively

CU is included because PG has a fiduciary responsibility for it

35
Q

Difference between blended and discretely presented

A

Blended is reported within the government’s financial statements and discrete is presented in a separate column in government wide financial statements

36
Q

Major Fund Rules

A
  • 10% of the total assets plus deferred outflows, or liabilities plus deferred inflows, revenues, or expenditures/expenses
  • 5% of the corresponding total for all governmental and enterprise funds combined.

BOTH

Fiduciary is never a major fund & General fund is always major

37
Q

Can transfers between funds include business type(enterprise)

A

Yes in includes governmental & business funds

38
Q

Quasi-external transactions

A

Business like transactions that take place between funds like internal service & enterprise fund providing service for a fee to other units of government

39
Q

Reimbursements

A

Recorded as an expense or expenditure in the fund making the reimbursement

40
Q

Transfers

A

Transfer between funds with no repayment required

  • Operating Transfers: usually budgeted and maybe recurring
  • Residual Equity Transfers: typically to start or close a fund

Not required to distinguish between the 2 in financial reports

41
Q

Loans

A

Amounts transferred between funds expected to be repaid

Record receivable and payable among the funds

42
Q

Infrastructure

A

Government can elect not to depreciate if it preserves condition, and expenditures to maintain them are expensed in the period incurred.

If condition is failed to be maintained then it reverts back to depreciation and no longer uses modified approach

43
Q

Common types of long term debt other than bonded debt

A 
Claims & judgements (contingencies)
Compensated absences 
Pensions
Other post employment benefits
Municipal landfill
Leases
44
Q

General Rule

A

Recognize fund expenditures and fund liabilities to the extent that the amounts are payable with expendable available financial resources

Report full liability & associated expense according to accrual accounting

45
Q

Derived Tax Revenues

A

Taxes assessed from exchange contracts like fuel or sales tax

Recognize when exchange transaction occurs

46
Q

Imposed Tax Revenues

A

Tax that is not an exchange contract like property tax o parking fines

Recognize when legally enforceable claim is established & can objectively be measured

47
Q

Government Mandated Revenues

A

Grants that mandate implementation of programs like environmental protection programs or alcohol & drug abuse programs

48
Q

Voluntary Revenues

A

Legislative or contractual agreements between parties like special education cost programs and state distribution or resources to fix streets

49
Q

Personal on corporate income taxes

A

Derived not imposed taxes

50
Q

Management Discussion & Analysis

A

allows management to highlight significant issues and discuss key issues from the financial statements

CPA - Financial Reporting (26 decks)

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