Governmental Accounting

Question 1

Who are the 3 main users of governmental financial reports?

Answer 1

1. The citizens
2. Legislative and Oversight bodies (city councils, school boards, board of trustees)
3. Investors and Creditors

Question 2

What are the uses of governmental financial reports?

Answer 2

1. To compare the actual financial reports to the adopted budget.
2. To assess financial condition/results of operations
3. To make sure govt is being compliant with laws and regulations
4. To evaluate the efficiency of the govt.

Question 3

What are the two paramount objectives of financial reporting in government?

Answer 3

1. Accountability

2. Interperiod Equity

Question 4

Define Accountability as it pertains to government financial reporting.

Answer 4

The taxpayers have the “right to know” that the government is operating within the legal constraints imposed by the citizens.

Question 5

Define Interperiod equity.

Answer 5

This is a big part of accountability because it shows if current revenues are able to pay for current services or whether future taxpayers will be need to assume the burden of those previous services.

Question 6

What is Service Efforts and Accomplishments (SEA) Reporting?

Answer 6

This type of reporting is voluntary, but it assists in accountability by measuring service efforts and service accomplishments.

Question 7

In Service Efforts and Accomplishments reporting, how are service accomplishments measured?

Answer 7

1. Output measures (such as miles of road repaired)

2. Outcome measures (such as crime rates)

Question 8

What are the 3 categories of funds?

Answer 8

1. Governmental funds
2. Proprietary funds
3. Fiduciary funds

Question 9

Withing the 3 categories of funds, how many fund types are there in total?

Answer 9

11

Question 10

What are the types of governmental funds?

Answer 10

1. General fund
2. Special Revenue funds
3. Debt service funds
4. Capital Project funds
5. Permanent funds

Question 11

What are the types of Proprietary funds?

Answer 11

1. Enterprise funds

2. Internal service funds

Question 12

What are the types of Fiduciary funds?

Answer 12

1. Custodial funds
2. Pension trust funds
3. Investment trust funds
4. Private Purpose trust funds

Question 13

What is the general fund?

Answer 13

The general fund accounts for ordinary operations of the govt. It is the only required fund of a governmental unit.

Question 14

What is a special revenue fund?

Answer 14

Special revenue funds account for proceeds from specific taxes, grants, etc. that are restricted or committed for specified purposes other than debt services or capital projects.

Ex. A gas tax that must be spent on road maintenance

Question 15

What is a capital project fund?

Answer 15

Accounts for money designated for the acquisition or construction of significant capital items (land, building, equipment)

Question 16

What is a debt service fund?

Answer 16

Accounts for money set aside to pay interest and principal on the governmental unit’s long term general obligation debt.

Question 17

What are permanent funds?

Answer 17

Account for resources received that have a stipulation requiring the principal amount remain invested but the earnings must be spent for specific purposes.

Question 18

What are enterprise funds?

Answer 18

Account for activities that provide goods and services to the general public. (utilities, golf courses, public transportation)

Question 19

What are internal service funds?

Answer 19

Account for activities that provide goods and services only to other government agencies. (Motor pools, printing services)