Governmental Accounting Flashcards by Audrey Frank

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

Governmental, Proprietary, Fiduciary

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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)

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What is a budget appropriation?

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

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What is an encumbrance?

Records purchase and reserves it for the encumbrance.

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What is the opening budgetary entry?

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

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What is the closing budgetary entry?

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

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What are the types of governmental funds?

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

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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

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What is a Special Revenue Fund?

Restricted for a specific purpose such as street repair.

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What is a Permanent Fund?

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

Principal remains intact.

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What is a Capital Projects Fund?

Used to acquire and build facilities.

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What is a Debt Service Fund?

Handles repayment of long-term debt and related interest.

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Which fund statements are issued in Governmental Accounting?

Balance Sheet

Statement of Revenues; Expenditures; and Changes in Fund Balance

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When is Revenue recorded in Governmental Accounting?

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

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What is Derived Tax Revenue?

Money collected from people doing things:

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

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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.

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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)

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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

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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

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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

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How are Capital Assets shown on a governmental Statement of Net Position?

They are shown net of debt

Asset Cost - Accumulated Depreciation - Asset Liabilities : Net Assets

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

Modified approach:

Reported at cost; no accumulated depreciation

How is a Statement of Net Position 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 Inflows; 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

cash flows from noncapital financing activities include

- proceeds or payments related to borrowing not attributable to acquisition, construction, or improvements of capital assets - cash receipts or payments related to grants or subsidiaries not attributable to capital purposes - property taxes (not capital) - cash paid to other funds (other than interfund services)

letter of transmittal should be included::

in the introductory section of local government's comprehensive annual financial report

JE: general obligation bonds issued at par

DR: cash CR: other financing sources

JE: appoved purchase orders issued for supplies

DR: encumbrance control CR: budgetary control

JE: ordered supplies were received and invoices approved

``` DR: budgetary control CR: encumbrance control (reversal) DR: Expenditures control CR: Vouchers payable ```

JE: general fund salaries and wages were incurred

DR: expenditures control CR: vouchers payable

JE: Internal service fund had interfund billings

DR: Due from other funds CR: interfund revenues

JE: revenues were earned from previously awarded grant

DR: deferred inflows of resources CR: grant revenues

JE: property taxes collected in advance

DR: cash CR: Deferred inflows of resources

JE: appropriations recorded on adoption of budget

DR: estimated revenues CR: appropriations control

JE: Short term financing received form a bank secured by city's taxing power

DR: cash CR: Tax anticipation notes payable

JE: Excess of estimated inflows over estimated outflows

DR: Estimated revenues CR: appropriations CR: budgetary control

pension fund balance sheet reported:

fiduciary fund financial statements

road and bridge assets reported using modified approach reported:

required supplementary information

non-major debt service fund reported:

consolidated with governmental activities in the government wide financial statements

internal service fund financial statements

consolidated with governmental activities in the government wide financial statements

special assesment activity for which the local government has no responsibility reported:

agency funds

comparison of general fund budgets to actual general fund activity reported:

required supplementary information

budget variances reported:

optional supplementary information

analysis of significant budget variances reported

MD&a

details of non-major fund financial statements reported:

optional supplementary information

definition of "Measurable and available" reported:

required footnote disclosure

to reconcile the change in fund balance of governmental funds to the change in net position of governmental activities on gov't wide F/S

GOES BARE ``` Add Governmental changes in fund balances Subtract Other financing sources Add Expenditures (capital outlay, debt service principal) Add/Subtract internal Service fund change in net position activity. ``` Add Additionall accrued revenue subtract additional accrued expenses

major fund treatment for purposes of fund financial statement presentation

requires a fund to be 10% of its fund category's assets, revenues, or expenditures, AND 5% of combined governmental and enterprise assets, revenues, and expenditures/expenses

reciprocal interfund activity includes

interfund loans and interfund services