Governmental Accounting III Flashcards
True or False.
Government wide financial statements are prepared under the modified accrual basis with an current financial resources measurement focus.
FALSE.
Government wide financial statements are prepared under the “accrual” basis with an “economic resources” measurement focus
HOW would an unrestricted grant received from another government to support enterprise fund operations be reported?
In Non-operating revenues
i.e. it would be reported in the non-operating revenues portion of the Statement of Revenues, Expenses and Changes in Fund Net Assets for the enterprise fund
If there is a debit balance in the “Budgetary Fund Balance” account after the budget is recorded:
THIS means that the Appropriations are greater than estimated revenues (by whatever the amount mentioned is)
The measurement focus of governmental fund accounting is on:
Current financial resources
i.e. reporting the sources of funds to the governmental unit and how those funds are used
The major difference between an exchange transaction and a non-exchange transaction for governmental units is:
The relationship between the amount of value given and received
Fund balances on the Governmental Funds balance sheet can be:
Non-spendable, restricted, committed, assigned, and unassigned;
NOTE: They can also be either a Restricted or Unrestricted component of a governmental entity’s Statement of Net Position
In governmental accounting, a fund is:
THE basic accounting unit and is used to assist in ensuring fiscal compliance
A government-wide statement of net position must:
BE divided into governmental and business-type activities
i.e. THERE must be a distinction between governmental and business-type activities
According to GASB, WHAT are Program Revenues?
“Resources that are generated in the process of providing a particular service or operating a particular part of a government.”
The three sections of the CAFR are:
(1) The Introductory section, which includes the transmittal letter
(2) The financial section which includes the auditor’s report, management discussion and analysis (MD&A), government-wide and fund financial statements, notes to financial statements,
(3) The statistical section which provides additional information
HOW should a government entity report a capital lease for equipment obtained through the lease on their government-wide statement of net assets?
AS a “General Capital Asset”
WHY? - Because Government-wide statements are prepared on the accrual basis, the capital lease will be reported as though it were reported under GAAP
True or False.
Under GASB, The notes to the Government Financial Statements must contain disclosures related to required supplementary information.
FALSE.
According to the Governmental Accounting Standards Board (GASB), “notes to the financial statements consist of notes that provide information that is considered essential to a user’s understanding of the basic financial statements.
Therefore they do NOT contain disclosures related to required supplementary information.
Under the “modified accrual” basis of accounting, amounts spent on capital assets are recognized as:
Expenditures at their Full Cost
WHAT items would be reported below the “Excess (deficiency) of revenues over expenditures” line on the Statement of revenues, expenditures, and changes in fund Balances?
(1) Proceeds from the sale of capital assets
(2) Payment to a debt-service fund
(3) Special items
HOW is Tax Revenue reported when Government-wide financial statements are prepared?
Taxes Levied (Net) of any expected uncollectible amounts
