Governmental Accounting Flashcards

2
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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3
Q

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

A

Governmental Proprietary Fiduciary

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4
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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5
Q

What is a budget appropriation?

A

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

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6
Q

What is an encumbrance?

A

Records purchase and reserves it for the encumbrance.

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7
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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8
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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9
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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10
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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11
Q

What is a special revenue fund?

A

Restricted for a specific purpose such as street repair.

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12
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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13
Q

What is a capital projects fund?

A

Used to acquire and build facilities.

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14
Q

What is a debt service fund?

A

Handles repayment of long-term debt and related interest.

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15
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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16
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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17
Q

What is derived tax revenue?

A

Money collected from people ‘doing’ things: Sales tax (buying cars) or income tax (people working)

18
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.

19
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)

20
Q

What are the proprietary fund financial statements in governmental accounting?

A

Statement of Net Assets Statement of Revenues, Expenses, and Changes in Net Assets Statement of Cash Flows

21
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

22
Q

How are assets and liabilities ordered in a governmental Statement of Net Assets?

A

Ordered by liquidity Current and non-current

23
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

24
Q

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

A

Modified approach: Reported at cost, no accumulated depreciation

25
Q

How is a Statement of Net Assets divided?

A

Into Governmental Activities and Business Activities

26
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.