Sec 2, Ch 1 Flashcards
What GASB Statement sets the standard for Basic Financial Statements for State/Local Governments?
GASB Statement 34
According to GASB Statement 1, who are the three primary users of external financial reports?
- Citizens
- Legislatures
- Investors/Creditors
The financial reporting entity consists of these two things
- Primary government
2. Component units
A special purpose government may also be a primary government if it meets all the following criteria (3):
- Legally separate
- Separate governing body
- Fiscally independent of other state/local gov’t
What are the three methods of displaying component units?
- Blending
- Discrete presentation
- Inclusion as a fiduciary fund
What are the two required statements for State/Local Government-wide Financial Statements?
- Statement of Net Position (Balance Sheet)
2. Statement of Activities
What do the Basic Financial Statement for state/local include? (3):
- Government-wide Financial Statements
- Fund Financial Statements
- Notes to the Financial Statements
The accounting and reporting model for state/local govt focuses on what two things?
- Fiscal accountability
2. Operational accountability
Who is responsible for setting accounting and reporting standards for state/local gov’ts?
Governmental Accounting Standards Board (GASB)
What is a component unit?
An organization for which the primary government is responsible
What criteria should be considered to determine financial accountability?
- Appointment of a voting majority
- Ability to impose will
- Potential for financial burden
- Fiscal dependency
What does GASB encourage state/local governments to issue?
Comprehensive Annual Financial Reports (CAFR)
The CAFR consists of what three (3) sections?
- Introductory
- Financial
- Statistical
What is the most important part of the introductory section of a CAFR?
Letter of Transmittal
What is included in the financial section of a CAFR (3)?
- Basic financial statements
- Combining statements
- Fund Statements and schedules
