Governmental Accounting Flashcards
What are the three major types of funds in governmental accounting?
Governmental, Proprietary, Fiduciary
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)
What is a budget appropriation?
The highest amount allowed for a particular expenditure under a budget.
What is an encumbrance?
Records purchase and reserves it for the encumbrance.
What is the opening budgetary entry?
Dr Estimated Revenues Control
Cr Appropriations Control
Dr/Cr Budgetary Fund Balance (plug)
What is the closing budgetary entry?
Dr Appropriations Control
Dr/Cr Budgetary Fund Balance (plug)
Cr Estimated Revenues Control
What are the types of governmental funds?
General Fund
Special Revenue Fund
Permanent Fund
Capital Projects Fund
Debt Service Fund
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
What is a Special Revenue Fund?
Restricted for a specific purpose such as street repair.
What is a Permanent Fund?
Legally restricted fund; where only earnings can be used to fund programs.
Principal remains intact.
What is a Capital Projects Fund?
Used to acquire and build facilities.
What is a Debt Service Fund?
Handles repayment of long-term debt and related interest.
Which fund statements are issued in Governmental Accounting?
Balance Sheet
Statement of Revenues; Expenditures; and Changes in Fund Balance
When is Revenue recorded in Governmental Accounting?
When it is BOTH available and measurable; regardless of when it is spent.
What is Derived Tax Revenue?
Money collected from people doing things:
Sales tax (buying cars) or income tax (people working)
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.
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)
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
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
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
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
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
