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CPA - FAR > 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

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

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

22
Q

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

A

Modified approach:

Reported at cost; no accumulated depreciation

23
Q

How is a Statement of Net Assets divided?

A

Into Governmental Activities and Business Activities

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.

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

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

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

What is the entry to record a PO?

A

Dr. Encumbrance

Cr. Budgetary Fund Balance
Reserved for encumbrance

31
Q

How should shared revenues be recorded in a proprietary funds?

A

Non-operating revenues

32
Q

What factors need to be met to be presented as restricted as a component of net position?

A

Externally restricted by creditors. OR Restricted by law.
The exam will try to trick you with having it be another government agency for example a city Council, this would stay in unrestricted.

33
Q

Government wide statements include data from which funds?

A

Governmental and proprietary only

34
Q

If a governmental fun receives income and uses it within the same year how is the income recorded?

A

As a revenue opposed to an inflow of resources since it is used in available within one year

35
Q

What are the two financial statement presentation approaches?

A

When the activities are similar to the primary government when there is voting majority and operational responsibility for example there was a financial benefit or burden.

36
Q

How are interfund transactions are recorded in relation to internal services being provided and build within the government?

A

If they would be treated as revenue expenditures and expenses if they involved outside organizations from the government then that’s how they should be accounted for within the government.

37
Q

How does the timing of collection of revenues impact revenue recognition for governmental wide statement of activities and governmental funds statement of activities?

A

For government wide timing does not affect revenue recognition because they are accrual basis so at the time the levee is recorded as total revenue less any uncollectible percentage.

For governmental funds they use the modified accrual so timing does affect revenue recognition. revenues must also be available so the 60 day rule comes into play and you only record the revenues on cash received

38
Q

Gap here Arkie for governmental accounting?

A

Category A - most authoritative GASB statements

Category B -
GASB technical bulletins
implementation guide
and GASB approved AICPA literature

non-authoritative
GASB concept statements

39
Q

How do you calculate the remaining funds available?

A

Appropriations less expenditures less encumbrances.

40
Q

What does the budgetary comparison schedule report?

A
  1. original budget
  2. final budget
  3. actual revenue and expenditures
    this must be reported on the same basis used to prepare the budget

variance column is optional

41
Q

For reporting implications of adoption of budgets

A
  1. Expression of public policy
  2. expression of financial intent
  3. form of control
  4. basis for evaluating performance

they do not need to be gap

42
Q

Capitalization and expense rolls with internally generated computer software

A

Three stages

  1. preliminary project - EXP
  2. application development - CAP
  3. post implementation expense - EXP
43
Q

What are the five categories of required supplementary information RSI

A
  1. MD & A
  2. schedule of funding progress and schedule of employer contributions ( that’s only for pensions)
  3. budgetary comparison (only for governmental funds)
  4. info about infrastructure assets reported using the modified approach
  5. certain information about risk financing activities
44
Q

How should significant in conferences be accounted for at your end?

A

Disclosed in the notes only

45
Q

What are the two characteristics of funds

A

Physical entity

accounting entity

46
Q

What’s included in other financing sources?

A

Inter-fund transfers from other fans, sales of general capital assets, and bond issue proceeds

CPA - FAR (19 decks)

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