Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

FAR CPA > Governmental Accounting > Flashcards

Governmental Accounting Flashcards

1
Q

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

A

Governmental, Proprietary, Fiduciary

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
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)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is a budget appropriation?

A

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

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is an encumbrance?

A

Records purchase and reserves it for the encumbrance.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is the opening budgetary entry?

A

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

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is the closing budgetary entry?

A

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

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What are the types of governmental funds?

A

General Fund
Special Revenue Fund
Permanent Fund
Capital Projects Fund
Debt Service Fund

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
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

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is a Special Revenue Fund?

A

Restricted for a specific purpose such as street repair.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is a Permanent Fund?

A

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

Principal remains intact.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is a Capital Projects Fund?

A

Used to acquire and build facilities.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is a Debt Service Fund?

A

Handles repayment of long-term debt and related interest.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Which fund statements are issued in Governmental Accounting?

A

Balance Sheet

Statement of Revenues; Expenditures; and Changes in Fund Balance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

When is Revenue recorded in Governmental Accounting?

A

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

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is Derived Tax Revenue?

A

Money collected from people doing things:

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

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
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.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
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)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
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

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
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

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
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

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
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

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

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

A

Modified approach:

Reported at cost; no accumulated depreciation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

How is a Statement of Net Assets divided?

A

Into Governmental Activities and Business Activities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
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.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
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

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
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

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
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

Internal Service Fund

A

Reports activities that provide goods or services to other funds of the primary government on a cost-reimbursement basis

31
Q

Investment Trust fund

A

Reports the external portions of investment pools, when the reporting government is the trustee

32
Q

Non-Exchange Revenues

A

Transactions in which a government gives or receives value without providing equal value in return

33
Q

Permanent Fund

A

Accounts for resources that are restricted to the extent that only earnings and not principal may be used to support specified government programs

34
Q

3 users of the external state and local governmental financial reports

A

1) the citizenry
2) Legislative and oversight bodies
3) Investors and Creditors

35
Q

Governmental Accounting: 2 types of accountability

A
  1. operational accountability

2. fiscal accountability

36
Q

Operation accountability

A

Demonstrated by government-wide financial statements which illustrate how effective and efficient the organization has been at using its resources

37
Q

Fiscal accountability

A

Illustrated by fund financial statements which show the organizations compliance with laws and regulations affecting spending activities.

38
Q

Define the term: invested in capital assets, net of related debt

A

computed by taking: value of capital assets, less accumulated depreciation, less the debt associated with the acquisition of the capital assets

39
Q

restricted

A

a) externally imposed by creditors (such as through debt covenants) grantors, contributors, or laws or regulations of other govts
b) imposed by law thru constitutional provisions or enabling legislation

40
Q

Unrestricted net assets

A

is a plug figure computed by taking the total net assets and subtracting the invested in capital assets, net of related debt and the restricted net assets

41
Q

Governmental activities

A

those that are financed thru taxes and other nonexchange transactions

42
Q

business type activities

A

those that are normally financed through user charges ?

43
Q

Governmental Funds

A
  1. General
  2. special revenue
  3. debt service
  4. capital projects
  5. permanent
44
Q

Proprietary Funds

A
  1. Internal Service

2. Enterprise

45
Q

Fiduciary Funds

A
  1. Agency
  2. Pension and other employee benefit trust funds
  3. Investment trust funds
  4. Private-purpose Trust funds
46
Q

For funds to be considered Major:

A

1) total assets, liabilities, revenues, expenditures/expenses of that indv governmental or enterprise fund constitute 10% if the governmental or enterprise category
2) total assets, liabilities, revenues, expenditures/expenses are 5% of the ttl of the governmental and enterprise category combined.

47
Q

Required financial stmts for fund types

A
  1. balance sheet

2. stmt of revenues expenditures, and changes in fund balances

48
Q

Enterprise funds must be used:

A
  1. if the activity is financed with debt that is secured solely by a pledge of the net revenues from fees and charges of that activity.
  2. laws or regulations require the activity cost of providing services be recovered with fees and charges, rather than from taxes or similar revenues
49
Q

differences in SCF. gasb vs fasb

A
  1. only the direct method is acceptable
  2. reconciliation is from operating income to net cash flow from operating activities, not from net income as required by fasb.
  3. Gasb has four categories, instead of 3 required by Fasb…operating, non-capital financing, capital and related financing, and investing
  4. cash receipts from interest are classified as investing, not operating.
  5. cash pmts for interest are classified as financing, not as operating.
  6. purchases of capital assets are considered financing, not investing.
50
Q

Note disclosures: GASB

A
  1. summary of acct policies
  2. description of reporting entity
  3. disclosures on cash and investments
  4. info relating to fixed assets, long term debt, pensions, commitments, contingencies.
  5. info on exceeding the budget at the legal level of control
  6. disclosures of individual funds with deficit fund balances
  7. risks related to deposits and investments.
51
Q

Four types of RSI, other than MD&A

A
  1. two pension schedules
  2. schedules when the government sponsors a public entity risk pool
  3. budgetary comparison schedules
  4. certain schedules when using the modified approach for reporting infrastructure.
52
Q

Modified approach for reporting infrastructure

A

governments have the option of not depreciating their infrastructure assets if they adopt the modified approach for recording infrastructure.

53
Q

requirements for adopting MOdified approach

A
  1. the govt must manage the eligible infrastructure assets using as asset management system that has certain characteristics
  2. the government must document the infrastructure assets that have been preserved at the condition level prescribed by govt
54
Q

economic resource measurement focus & full accrual accounting

A

objective is to measure all of the economic resources available to the governmental entity, including fixed assets and subtracting long term debt.
used for govt wide, proprietary, and fiduciary

55
Q

current financial resources mgmt focus and modified accrual basis of accounting.

A

objective is to measure only the current financial resources available to the govt entity

  • do not account for fixed assets, or long term debt within the fund,
  • revenues recognized when measurable and available to finance expenditures of the current period.
  • property taxes may be considered available collected within 60 days of the end of the fiscal year
56
Q

Revenues recognized when earned under the accrual basis of accounting.

A

revenues include exchange and non-exchange transactions.

57
Q

GASB ruling on exchange transctions

A

to be recognized in accordance with GAAP

58
Q

GASB ruling on Non-Exchange transactions

A

transactions in which government value without directly receiving equal value in exchange

59
Q

GASB classifies NON-exchange transactions into four categories

A
  1. derived tax revenues
  2. imposed non-exchange revenues
  3. govt mandated non-exchange transactions
  4. voluntary non-exchange transactions
    - for govt wide, revenue from non-exchange in considered to increase to unrestricted net assets unless revenue is restricted by the grantor, donor, legislation.
60
Q

Derived Tax Revenues

A

result from taxes assessed by govts on exchange transactions (sales tax, income tax, motor fuels tax)

61
Q

imposed non-exchange transactions

A

taxes and other assessments by govts that are not derived from underlying transactions. (property tax, special assessments, fines and forfeits.

62
Q

Government mandated non exchange transactions

A

exist when the providing govt requires the receiving govt to expend funds for a specific purpose

63
Q

voluntary non exchange transactions

A

include grants and entitlements from one govt to another where the providing govt does not impose specific requirements upon the receiving govt

64
Q

Gasb 33: cash received from govt mandated grants

A

should be reported as deferred revenue when cash is received prior to all eligibility requirements being met. - time restriction is one example of eligibility. other wise simply reported as revenue

65
Q

sale and pledges of receivables

A

circumstances that would indicate continued involvement

  • govt or buyer can cancel the sale
  • govt can limit the buyers ability to subsequently sell or pledge the receivables or future revenue
  • govt has access to
  • govt can substitute or reacquire without buyers consent
  • govt is actively involved
  • -receivables that meet the requirements for sale should be removed from the assets
  • –difference between the carrying value of the receivables and the funds received is reported as a gain or loss on accrual-basis financial stmts or as revenue in modified accrual.
  • in a sale of future revenue the govt generally reports the proceeds as deferred revenue and recognizes the revenue over the life of the sales agreement.

FAR CPA (19 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions