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FAR 2014 > 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

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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.

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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

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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

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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

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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

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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

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30
Q

What is the most authoritative literature for government accounting

A

GASB interpretations

31
Q

What is the lowest level authority for government accounting

A

GASB implementation guides

Q&A

32
Q

What is the purpose of service effects and accomplishment reporting

A

Necessary for accountability and making informed decisions

33
Q

What are the elements of resource flows

A

Outflows of resources

Inflows of resources

34
Q

What is the essential characteristic of an asset

A

Present service capacity

35
Q

What is a deferred outflow

A

Consumption of net position by the government that is applicable to a future reporting period

36
Q

What are the basic government financial statements

A

Government wide FS
Fund FS
Notes to FS

37
Q

What is the basic criteria used to determine the reporting entity

A

Financial accountability

38
Q

When is a component blended

A

Governing body substantially the same as primary gov
Services provided almost entirely to gov
Components debt will be repaid almost entirely by primary gov

39
Q

What is required in the government wide FS

A

Statement of net position

Statement of activities

40
Q

How are transactions of certain loan programs presented on statement of cash flows

A

Operating activity

41
Q

What is the purpose of government wide FS

A

Provide operational accountability info for gov as a whole

42
Q

How are fixed assets reported on the statement of net position

A

Assets less accumulated depreciation

43
Q

How are fixed assets reported on statement if net position under government activities

A

Cost less accumulated depreciation less liability

44
Q

Under the modified approach how are infrastructure assets reported

A

Assets at cost without accumulated depreciation
Cost to extend life is expensed
Supplemental info disclosed

45
Q

For pensions over what time period are the effects of differences in expected and actual investment return recognized

A

5 years

46
Q

If a state is not expected to make projected benefit payment how are projected future benefit payments discounted

A

Use 20 year rate of tax exempt bonds

47
Q

Which reports reflect depreciation and why?

A

Proprietary
Government wide

Both use accrual method

48
Q

What are government wide FS based on and what is their focus

A

Based on accrual method

Focus on economic resources

49
Q

Where are component resources reported

A

On government wide FS

Not fund statements

50
Q

How is interest received as return on investment reported on statement of cash flows

A

Cash from investing activities

51
Q

What are included in proprietary financial statements

A

Statement of net position
Statement of revenue, expenses, change in find net position
Statement of cash flows

52
Q

How are major and nonmajor finds reported on government funds

A

All nonmajor funds aggregated and reports in single column

53
Q

How are fund balances reported

A

Reserved

Unreserved

54
Q

On the statement net position for proprietary fund how are assets and liabilities and activities of internal service fund reported

A

Assets and liabilities as noncurrent

All activities of internal service fund aggregated and reported in single column

55
Q

Where are agency funds reported

A

Statement of fiduciary net position

56
Q

Where are private purpose trust funds reported

A

Statement of fiduciary net position

Statement of change in fiduciary net position

57
Q

What FS reports statement of cash flows

A

Proprietary

58
Q

What are the categories on statement of cash flows

A

Operating
Noncapital financial
Capital and related financing
Investing

59
Q

What is the focus of the government fund

A

Focus on determination of current financial position rather than income determination

60
Q

What is a nonexchange transaction

A

Government gives (receives) value without directly receiving (giving) equal in exchange

61
Q

What is a government mandated nonexchange transaction

A

Providing government (state) requires receiving government to expend funds for a specific purpose

62
Q

What is the basis of a pension trust

A

Accrual basis

63
Q

In what account are proceeds from LT debt issues not recorded as fund liabilities

A

Other financing sources

64
Q

What is the purpose of the debt service fund

A

Account for the accumulation of resources for and payment of LT debt principal and interest

65
Q

What fund type does the debt service fund service

A

Governmental fund

66
Q

What is the JE for cash payments from general fund for cash receipts and principal and interest payments

A

Dr cash
Cr transfer in - gov fund

Dr expenditure - principal
Dr expenditure - interest
Cr cash

67
Q

At what value is real estate held as an investment by government endowment reported at

A

Fair value

68
Q

Where are transactions between governmental and internal service fund reported on gov wide FS

A

In government activities

69
Q

What is the JE for internal service fund to bill other departments

A

Dr billings to departments

Cr operating revenues

70
Q

What is included in the transfers section on the gov wide FS

A

Transfers between government and business activities, except internal service to enterprise

71
Q

What are some examples of transfers reported on gov wide FS

A

Permanent transfer from gov activities to business activities in order to establish enterprises fund

Annual transfer from government activities to subsidize enterprise fund

72
Q

If a public university is only reporting business type activities use the same financial statements as

A

Enterprise funds

73
Q

How are scholarships provided in exchange for services treated, including employee discounts

A

Recorded as expense, not reduction in tuition expense

FAR 2014 (19 decks)

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