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 (revenue 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 journal entry?
Dr: Estimated Revenues Control
Cr: Appropriations Control
Dr/Cr: Budgetary Fund Balance (plug)
What is the closing budgetary entry?
Dr: Appropriation Control
CR: Estimated Revenues Control
DR/CR: Budgetary Fund Balance (plug)
What are the types of governmental funds?
General Fund Special Revenue Fund Permanent Fund Capital Projects Funds Debit 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 they 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 revenue; 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 investment
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 Liabilites = 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 the 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 service provided
Sufficiency of revenues to cover costs
Financial position of entity
What Financial Statements are required for Defined Benefit Pension Plan?
Statement of Fiduciary Net Position
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 Outflows 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
