Governmental Accounting (Part B)

Question 1

What are the three categories that functions/programs categorized into for government-wide statement of activities?

Answer 1

1) Primary Government Activities = GRaSPP + S
2) Primary Government Business-Type Activities = E
3) Component Units = Rescue Squad, BOE

Question 2

What are three program revenue category types, and give definition for government-wide statement of activities? “SOC”

Answer 2

1) Charges for Services
- Charges for services to customers who benefit from goods or services (water and sewer fees, licenses, building permits)
- Charges for service to other governments such as housing prisoners
- Fines and forfeitures

2) Operating Grants and Contributions
- Restricted for use in a particular program

3) Capital Grants and Contributions

Question 3

What are the net (expense) revenue and changes in net position for government-wide statement of activities?

Answer 3

1) Primary government activities column
2) Primary business-type activities column
3) Component unit column
4) Total column (1 & 2)

Question 4

What are the two criteria that (both must be met) for major fund reporting for government-wide fund financial statements of governmental fund’s balance sheet?

Answer 4

1) The 10% test states that, the individual GRSPP funds are compared to the total of all GRSPP funds, and the individual E funds are compared to the total of all E funds.
- 10% or more of the total revenues, expenditures/expenses, assets and deferred outflows of resources, or liabilities and deferred inflows of resources.
2) The 5% test states that, the individual GRSPP funds are compared to the total of all the governmental funds AND enterprises funds. The individual enterprise funds are compared to the total of all enterprise AND governmental funds.
- 5% or more of the total revenues, expenditures/expenses, assets and deferred outflows of resources, or liabilities and deferred inflows of resources.

Question 5

How do you reconcile GRaSPP funds balance sheet to government-wide statement of net position (balance sheet)

Answer 5

GALS BARE

GRaSPP - Fund balance
+ Assets (non-current)
- Liabilities (non-current)
+ Service (internal) fund net position

ADJUSTMENTS
Basis of Accounting
Accrued 
Revenues and 
Expenses

Question 6

How do you reconcile GRaSPP funds statement of revenues, expenditures, and changes in fund balance to government-wide statement of activities (income statement)

Answer 6

GOES BARE

GRaSPP - Net change in fund balance
- Other financing sources
+ Expenditure - capital outlay (net of depreciation)
+ Service (internal) fund net income

ADJUSTMENTS
Basis of Accounting
Accrued 
Revenues and 
Expenses

Question 7

What are the seven differences between commercial statement of cash flows and government-wide proprietary funds statement of cash flows?

Answer 7

1) The direct method is required (no indirect method)
2) A reconciliation of operating income to net cash provided

3) 4 Categories instead of three:
A) Operating Activities
B) Capital and related financing activities
C) Noncapital financing activities
D) Investing Activities

4) The order of financing and investing activities categories are reversed
5) Interest income/cash receipts are “investing activities” not operating activities

6) Interest expense/cash receipts are either:
A) Capital and related financing or
Noncapital financing

7) Capital asset purchases are reported as “financing activities” not as investing activities

Question 8

What is required and optional in Required Supplementary Information (Not part of F/S)

Answer 8

Schedules must show original budget, final amended budget, and actual amounts.

1) Variances between budget and actual is optional
2) Variances between original and final amended budget is optional.