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FAR > Governmental Funds (F9 M2-M6) > Flashcards

Governmental Funds (F9 M2-M6) Flashcards

1
Q

Governmental Funds Financial Statements

A

-Balance Sheet:
Current assets + deferred outflows
= current liabilities + deferred inflows
+ fund balance

-Statement of Revenues, Expenditures, change in fund bal (IS):
Revenues
-expenditures
\+/- other financing sources (uses)
= net change in fund balance
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2
Q

Modified accrual

A

Book
Activity
Encumbrances

Closes to BS which gets rolled over

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3
Q

Types of Governmental funds

A 
General
Special Revenue
Debt Service
Capital Projects
Permanent
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4
Q

Sources of Governmental resources (revenue)

A
  • Derived Taxes - Income and sales
  • Imposed Taxes - property and real estate
  • Fines and penalties
  • INTERGOVERNMENTAL (not interfund) transfers (different level of government like state to local)
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5
Q

Sources of Governmental Resources (other financing sources)

A
  • debt proceeds

- interFUND transfers

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6
Q

Budgetary Accounting JE

A

Beginning of the year*:
Dr. Estimated Revenue Control
Dr. Budgetary control (if negative/deficit)
Cr. Appropriations Control (this is approved spending)
Cr. Budgetary Control (if surplus/positive)

*Revenue which is usually a credit is debited (est revenue control account)

Close at end of year**:
Dr. Appropriations Control
Cr. Estimated Revenue Control

**Reverse SAME dollar amount +/- amendments

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7
Q

Expenditures - Current assets

A 
Two methods.
-PURCHASE METHOD
Buying item
Dr. Expenditure 
Cr.Vouchers payable

End of year
Dr. Supplies inventory
Cr. Nonspendable fund bal - inventory

-CONSUMPTION METHOD
Buying item
Dr. Supplies inventory
Cr. Vouchers payable

Use of item (when consumed)
Dr. Expenditure
Cr. Supplies Inventory
*must be in balance with nonspendable fund bal at end of year

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8
Q

Encumbrances JE

A

-purchase order issued
Dr. Encumbrances
Cr. Budgetary Control

-invoice received
Dr. Budgetary Control
Cr. Encumbrances (SAME AMOUNT)

Dr. Expenditures
Cr. Vouchers payable (ACTUAL AMOUNT)

-if outstanding at EOY and appropriations do not lapse
Dr. Budgetary Control
Cr. Encumbrances (SAME AMOUNT)

Dr. Unassigned fund balance
Cr Fund balance, committed (SAME AMOUNT)

Dr. Expenditures - PRIOR YEAR
Cr. Vouchers Payable

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9
Q

Reciprocal interfund activity

A
  • interfund loans: accounted for as interfund recievables/payables
  • interfund services provided: accounted for as revenue/expenses and expenditures
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10
Q

Nonreciprocal interfund activity

A
  • interfund transfers: other financing sources and uses

- interfund reimbursements: are not displayed as interfund transactions.

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11
Q

Special items

A
  • under the control of management and are unusual OR infrequent.
    ex: sale of certain capital assets, termination benefits, early retirement programs
  • unlike extraordinary which is unusual AND infrequent
    ex: environmental disaster from chemical spill
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12
Q

Categories of Fund balances

A

Fund balance is the “equity”

categories in order of constraints:

  • nonspendable
  • restricted
  • committed
  • assigned
  • unassigned
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13
Q

Nonspendable fund balance

A

current assets that cannot be spent

prepaid expenditures, inventories etc

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14
Q

Restricted fund balance

A

associated with assets restricted by external authorities

ex: legislation, grantors, creditors

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15
Q

Committed fund balance

A

Obligated by formal action by highest decision making authority

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16
Q

Assigned fund balance

A

government intends to obligate but has not formally committed

17
Q

Unassigned fund balance

A

spendable.

-only the general fund has positive unassigned fund balance

18
Q

General Fund

A
  • only one general fund per entity
  • always reported as a major fund
  • automatically finances other funds by making loans, interfund transfers, making up deficits in enterprise fund
19
Q

Special Revenue

A
  • revenues and expenditures that are legally restricted/committed for specific purposes other than debt or capital projects.
    ex: sales tax fund to operate park, gasoline tax fund to maintain streets, account for specific fees (admission, parking), expendable grant funds which are monitored
  • encumbrances = commit funds for purchase orders
  • Fund balances = nonspendable, restricted, committed, negative unassigned
20
Q

Debt Service fund

A
  • accumulation of resources and payment of currently due interest/principal on long term obligation debt
  • does NOT pay off debt for SE-PAPI funds. GRaSPP only.
  • revenue earned from interest
  • proceeds from bond issuances/interfund transfers are other financing sources
  • NO encumbrances
  • fund balances = restricted, committed, assigned, negative unassigned
21
Q

Capital Projects fund

A
  • construction, purchase, leasing of significant fixed assets
  • life is shorted and limited to construction period
  • generally funded by bond proceeds used to complete particular project. may also be funded by transfer from other fund, specific tax revenues/capital grants
  • special assessments if primarily or potentially liable
  • bond premiums are displayed as financing source (other financing source - premium)
  • bond discounts are displayed as financing use
  • other bond issue costs (underwriting fees) are displayed as debt service expenditures when incurred

-fund balances = restricted, committed, assigned, negative unassigned

22
Q

Special Assessments

A

-taxes or fees levied against property owners who will directly benefit from the project

PRIMARILY/POTENTIALLY LIABLE:

  • governmental or proprietary fund
  • under governmental fund, debt proceeds are classified as “contribution from property owners”
  • program revenue on government wide statement

NOT PRIMARILY/POTENTIALLY LIABLE

  • agency fund
  • excluded from government wide financial statement
23
Q

Permanent fund

A
  • legally restricted to the extent that only earnings, not principal, may be used.
  • revenue = investment earnings
  • expenditures = operating purpose of the fund
  • NO ENCUMBRANCES
  • fund balances = restricted, negative unassigned

FAR (15 decks)

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