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Exam > Section 2, Chapter 2 - Fund Accounting and Reporting > Flashcards

Section 2, Chapter 2 - Fund Accounting and Reporting Flashcards

1
Q

What types of reporting do state and local governments use?

A

Fund basis

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2
Q

Where can foundational accounting and reporting standards for funds be found?

A

GASB Codification Section 1300 - Fund Accounting

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3
Q

How is a fund defined?

A

A fiscal and accounting entity with a self-balancing set of accounts recording cash and other financial resources, together with all related liabilities and residual equities or balances, and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain activities in accordance with special regulations, restrictions or limitations

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4
Q

What is a fund? What are the intended to do?

A
  • a fiscal and accounting entity
  • intended to stand alone
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5
Q

How many funds do governments have?

A

Several or many

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6
Q

Do fund financial statements provide information about the entire reporting entity?

A

No

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7
Q

What do the fund self-balancing set of accounts include?

A
  • assets (assets and other resources)
  • liabilities
  • residual equities
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8
Q

How are funds segregated?

A
  • governments can create as many funds as they need to comply with legal and operational requirements
  • Some have five or fewer, larger governments (states) hundreds
  • Funds aggregated for external reporting purposes (example: several funds that account for grants may be combined into a single fund for external reporting purposes)
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9
Q

What are funds used for?

A

Carrying on specific activities, established in law or enabling legislation or attaining certain objectives

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10
Q

How many funds should be established?

A

Only the minimum number of funds consistent with legal and operating requirements should be established
- It’s common for government to consolidate several funds into a single fund for GAAP reporting purposes (example: a government may consolidate several grant funds into a single federal grant fund)

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11
Q

How are fund special regulations, restrictions, or limitations specified?

A
  • By a constitution or statute (ordinance)
  • by the individual or organizational providing the monies or other resources
    ** they specify/limit the purposes for which the monies can be spent
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12
Q

What are the three fund categories used by state and local governments?

A
  • governmental
  • proprietary
  • fiduciary
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13
Q

What have governmental funds been traditionally used for?

A

To account for the general services provided to the public (public safety, health, transportation, social service, recreation, and the administration of the government)

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14
Q

What do governmental funds focus on?

A
  • sources
  • uses
  • balances of current financial resources
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15
Q

What is an important characteristic of governmental funds?

A

Lack of match between resources and their uses

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16
Q

What are governmental funds supported through?

A

Nonexchange revenues (taxes, fines, grants, shared revenues)

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17
Q

What method of accounting is used to account for governmental funds?

A

Current financial resource model (modified accrual)

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18
Q

What focus of accounting is used for governmental funds?

A

Sources, uses, and balances of current financial resources

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19
Q

What’s the fund balance for governmental funds?

A

Assets - liabilities

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20
Q

What’s are proprietary funds?

A
  • business-like activities that charge a fee for goods and services provided
  • revenue received is matched to the expenses incurred for each business-like activity
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21
Q

What types of proprietary funds are there?

A
  1. Enterprise
  2. Internal Service
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22
Q

What are enterprise fund? Examples?

A

Provide goods and services to customers external to the primary government and may charge fees sufficient to cover costs

Example:
- utilities
- transportation
- hospitals

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23
Q

How are the revenues of enterprise funds often augmented?

A
  • operating grants
  • capital grants
  • contributions
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24
Q

What are internal service funds? Examples?

A

Provide goods and services to customers internal to the primary government and charges fees intended to cover costs fully

Examples:
- HR
- communication
- printing
- IT

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25
Q

What do proprietary funds focus on for reporting?

A
  • operating income
  • Changes in net position
  • Cash flows
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26
Q

What measurement resources focus and basis of accounting do proprietary funds use??

A
  • economic resources measurement focus
  • accrual basis of accounting
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27
Q

What are fiduciary funds?

A

Report activities and results of operations in the following funds:
1. Funds with trust agreements, or equivalent arrangements (found in law)
2. Funds without a trust

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28
Q

What are some funds with trust agreements, or equivalent arrangements (found in law)?

A
  1. Pension and other employee benefit trust funds (defined benefit pension or other postemployment benefits plans (OPEB)
  2. Investment trust funds (external investment pool managed by state treasurer)
  3. private purpose trust funds (internal revenue code section 529 prepaid college tuition fund)
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29
Q

What are some funds without a trust?

A

Custodial funds (pass-through tax collection funds remitted to other governments)

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30
Q

In order to be a trust (or an equivalent arrangement), the activity must have what elements?

A
  1. Contributions from the employer(s) that participate in the trust and non-employers that contribute to the trust and their related earnings are irrevocable
  2. Assets are dedicated to providing benefits in accordance with the terms of the trust.
  3. Assets are legally protected from creditors of the employers, the non-employer contributing entities, beneficiaries and the administrator
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31
Q

What are some examples of non-employers?

A
  • Larger government, such as state, contributing funds to subsidize other employers
    Example: estate may contribute 35% toward teachers pensions. In certain circumstances, an employer may also contribute amounts to the employee/participant may be required to contribute.
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32
Q

What does irrevocable mean?

A

Once funds are put in the trust, they can only be used for the terms and conditions of the trust

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33
Q

What is the exclusive benefit rule?

A
  • pensions and OPEB rule where are assets are dedicated to providing benefits in accordance with the terms of the trust
  • administrative costs are permitted to be paid from the trust without violating the trust terms
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34
Q

What is the objective of fiduciary funds?

A

To demonstrate the government’s accountability over the assets that are controlled by the government

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35
Q

What measurement focus and basis of accounting is used for fiduciary funds?

A
  • economic resources
  • accrual basis of accounting
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36
Q

Is fiduciary fund activities reports on government-wide level?

A

No

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37
Q

When is fiduciary activity that is not a component unit presented?

A

If the government controls the assets of the arrangement and any of the following:
1. A pension plan that is administered through a trust
2. An OPEB plan administer through a trust
3. A circumstance which assets from entities are not part of the reporting entity are accumulated for pensions or OPEB (ex: multiple gov may cooperate and contribute to a trust controlled by a different gov)

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38
Q

If the activity is not a pension or OPEB plan, or where assets are accumulated for pensions or OPEB as described, the activity is a fiduciary activity if all of what criteria is met?

A
  1. The assets associated with the activity are controlled by the gov
  2. The assets associated with the activity are not derived solely from gov-owned source resources or from gov-voluntary or mandated non exchange transactions except for pass through grants that the gov fording have admin or direct financial involvement
  3. Asset
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39
Q

The government controls assets of an activity if the government what?

A
  1. Holds the assets
  2. Can direct the use, exchange, or employment of the assets in a manner that provides benefits to the specified or intended recipients. Restrictions from legal or other external constraints that stipulate the assets can only be used for a specific purpose do not negate control
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40
Q

What are own-source revenues?

A

Revenues generated by the government itself like water and sewer charges, investment warnings, sales and income taxes, property taxes and other inflows

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41
Q

What are the types of governmental funds?

A
  1. General fund
  2. Special revenue funds
  3. Capital project funds
  4. Debt service funds
  5. Permanent funds
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42
Q

What is the general fund used for?

A

To account for and report all financial resources, except those required to be accounted for in another fund

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43
Q

What is a special revenue fund used for?

A

To account for and report the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes other than debt service or capital projects

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44
Q

What is the capital project funds used for?

A

To account for and report financial resources that are restricted, committed or assigned to expenditure for major capital outlays by general government, including the acquisition or construction of capital facilities and other capital assets

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45
Q

What are debt service funds used for?

A
  • To account for and report financial resources that are restricted, committed, or assigned to expenditures for principle and interest.
  • should be used to report resources if legally mandated to do so.
  • to account for financial resources that are being accumulated for principal and interest maturing in future years
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46
Q

Where are fund not authorized by a government to be reported?

A

The general fund, not the debt service

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47
Q

What are permanent funds used for?

A

To account for and report resources that are legally restricted to the extent that only earnings, and not the principle, maybe used for purposes that support the government programs

Likely budgeted endowment

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48
Q

How many general funds can the reporting entity have?

A

Only one general fund

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49
Q

How many funds (other than governmental funds) should a government create for internal and external reporting purposes?

A

Internal: additional

External: The minimum needed to satisfy legal specifications and operational requirements

The government may consolidate several grant funds for external reporting but maintain individual funds for budgeting and internal management purposes

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50
Q

What is the most important governmental fund?

A

The general fund

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51
Q

What should the general fund be used to report?

A

All flows and balances of current financial resources except those required to be reported in another fund

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52
Q

What is the default fund if resources do not belong in any specific funds?

A

The general fund because it’s the primary fund of the government

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53
Q

What are the three criteria that provide the basis for using funds other than the general fund?

A
  1. GAAP requirements
  2. Legal requirements
  3. Demand of sound financial administration
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54
Q

What type of services of the government should be accounted for in the general fund?

A
  • most administrative services including the executive, legislative, and judicial branches because they provide supervision to all other activities conducted by the governmental entity
  • services include Human Resources, financial administration and facilities management, and other overhead costs that contribute to the delivery of goods and services by all other components (some govs may use internal service fund)
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55
Q

What are the public services often accounted for in the general fund?

A
  • police and fire protection
  • social services
  • community development and recreation
  • economic development
  • planning and zoning
  • sanitation and solid waste collection ( governments that collect a fee use enterprise fund)
  • street maintenance
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56
Q

What affects the fiscal management of the general fund?

A

The character and extent of services provided will be different for each governmental entity which will affect financial management

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57
Q

What are the revenues and expenditures reported in the general fund?

A
  • property taxes, sales taxes, and income taxes are the most common revenue source used to finance government activities
  • permit and license fees may also be significant resources
  • other major resources: intergovernmental grants and shared revenues
  • fines, forfeitures, and investment earnings
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58
Q

What form can the general fund make advances to other funds or make permanent transfers?

A

Subsidies

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59
Q

What are special revenue funds used for?

A

To account and report for the proceeds of specific revenue sources (other than most capital projects) that are restricted or committed to expenditure for specified purposes

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60
Q

What does the term “proceeds of specific revenue sources” establish?

A
  • That one or more specific restricted or committed revenue(s) should be the foundation for a special revenue fund
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61
Q

Can funds restricted or committed be received in another fund and transferred to the special revenue fund?

A

Yes

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62
Q

How are funds restricted or committed be received in another fund and transferred to the special revenue fund recognized?

A

Not recognized as revenue in the fund initially receiving them; however, those inflows should be recognized as revenue in the special revenue fund from which they will be expended, in accordance with specified purposes

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63
Q

What are expected of restricted or committed proceeds of specific revenue sources?

A

They’re expected to comprise a substantial portion of the inflows reported in the fund

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64
Q

What other resources can be submitted in the special revenue fund?

A

If the resources are restricted, committed, or assigned to the specific purposes of the fund

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65
Q

When should governments discontinue report a special revenue fund and instead report the funds remaining resources in the general fund?

A

If the government no longer expects that a substantial portion of the inflows will derive from restricted or committed, revenue sources

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66
Q

For special revenue funds, what should be disclosed in the notes?

A

The purpose for each major special revenue fund, identifying which revenue and other resources are reported in each of those funds

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67
Q

How should the general fund of the component unit be reported when a component units general fund is blended with the primary government?

A

It should be reported as a special revenue fund, and not blended with the general fund of the primary government

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68
Q

What is the most compelling criteria for using special revenue funds?

A

They need to segregate revenues, and balances outside the general fund

Although these restrictions can be accomplished, using an efficient chart account, there are other administrative reasons to report separate funds

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69
Q

What are some other resources special revenue funds can account for?

A
  • Federal and state grants
  • special assessments
  • Component units
  • Related not for profit organizations
  • Special purpose authorities
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70
Q

Who can resources in special revenue funds, be restricted by?

A
  • governments legislative authority
  • A third-party, such as a grantor or state statute
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71
Q

What is a frequent use of special revenue funds?

A

To account for federal financial assistant programs

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72
Q

What can special revenue fund revenues include?

A
  • tax assessments
  • Earmarked resources and taxes
  • intergovernmental revenues
  • License and permit fees
  • Charges for services
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73
Q

What are some special revenue fund expenditures?

A

Expenditures, reflect the nature of the program for which the resources I’ve been restricted, including:
- Personnel
- Operating
- capital outlay
- Debt service

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74
Q

What are capital project funds used to account for?

A

To account and report for financial resources that are restricted, committed, or assigned to expenditure for major facilities and further capital assets, other than those finance by proprietary and trust funds

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75
Q

What does the use of capital project funds provide for?

A

The efficient management of resources for multi year projects. For example, the construction of a government office complex, or a recreation center complex financed with a general obligation bonds.

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76
Q

How are proceeds from the issuance of bonds reported on the fund operating statement? (Capital projects fund)

A

As other financing sources

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77
Q

How is the face value of the bond issue reported on the operating statement? (Capital projects fund)

A

As other financing sources

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78
Q

How are bond premiums or discounts reported? (Capital projects fund)

A

They reported separately from bond proceeds

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79
Q

How are the cost issue bonds reported? (Capital projects fund)

A

They reported separately

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80
Q

Where are the acquisition of general capital assets reported, and how are they reported?

A
  • reported on the operating statement of the fund making the acquisition
  • Reported as capital outlays
  • They are not reported as assets of the projects fund, although they are reported as assets of governmental activities on the government wide statement of net position
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81
Q

What is the debt service fund used to account for?

A
  • To account and report financial resources that are restricted, committed, or assigned to expenditures for principal and interest
  • Financial resources that are being accumulated for principal and interest maturing in future years
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82
Q

Historically, what have debt service fund been used for primarily?

A

To report more complex bond issues that are governed by detailed bond indentures

These indentures usually mandate the accumulation of reserves for debt service to protect bondholders and set aside cash for debt retirement

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83
Q

Where can revenue in the debt service funds come from?

A
  • Earmarked taxes
  • Grants
  • Investment earnings on balances
  • resources transferred from other funds such as the general fund
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84
Q

What are some expenditures of the debt service fund?

A
  • Debt service principal and interest
  • other related servicing fees
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85
Q

How does the modified accrual basis of accounting recognize, as expenditures, the portion of debt service principal and interest?

A

It only recognizes the principal and interest that is due and payable

This represents one of the modifications to the accrual basis of accounting for state and local governments

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86
Q

Where are revenues and other financing sources for debt service that exceeded the debt service payment recorded?

A

They remain in the debt service fund as a fund balance

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87
Q

What fund accounts for term bonds?

A

The debt service fund

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88
Q

What is a term bond?

A

Bonds that are not require payment of principal until the completion of the term

Example: if a 20-year term bond is issued, the government is only required to pay interest in years 1-19. In year 20, both interest and principal are due.

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89
Q

What is a sinking fund?

A
  • type of debt service fund facilitating the retirement of the long-term debt
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90
Q

When and where are sinking fund payments made?

A
  • result in the accumulation of resources for the period that the financial resources are set aside, rather than when the liabilities are incurred, or payments are due
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91
Q

What is a serial bond?

A
  • bonds that pay principal and interest annually
  • the same amount of interest is paid a year so the annual debt service payment declines over life of issue since interest cost is based on outstanding principal

Ex: $1M paid of 20 years. $50k principal retired each year. 1st year interest on $1M, 2nd year interest $950k

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92
Q

What fund can governments use to make principal and interest payments of financed capital projects? Where is the asset reported?

A
  • debt service fund
  • debt service payments are accounted for in the custodial fund instead if debt service fund if gov is not obligated in any manner
  • construction outflows are presented as capital improvements in a capital projects fund or other as appropriate (contributions from property owners)
  • capital assets presented in government-wide statements like any capital asset
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93
Q

What is debt refunding?

A
  • government issues new debt that carries a lower interest rate than older issue
  • A transaction that would be reported in a debt service fund
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94
Q

Where are debt refunding proceeds recorded?

A

Another financing source on the operating statement

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95
Q

For debt refunding, where are payments to retire old debt recorded?

A

Another financing use under “payments to refunded bond escrow agent”

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96
Q

What is advanced refunding?

A

The government issues new debt, places the proceeds of the new debt into an escrow account that can invest in special Treasury securities, and uses the return from those securities to pay off the old debt.

Old debt is considered defeased

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97
Q

What did the Tax Cuts and Jobs Act of 2017 do?

A

Eliminated the tax exempt status of advanced refunding bonds

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98
Q

What are permanent funds used for?

A

To account for bequests the government receives from individuals stipulating that donated resources are to be invested by the government

Bequests restrict the use of resources so only the earning, not the principal, may be used for activities that benefit the government

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99
Q

What are some examples of bequests?

A
  • higher institutions receive from graduates endowing a chair in some department
  • gifts to public libraries that stipulate the earnings can be used to purchase books or other materials
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100
Q

What is the key for establishing a permanent fund compared to a private-purpose trust fund (a type of fiduciary fund)?

A

The beneficiary

  • if the government benefits from the bequest, a permanent fund is used
  • if the government is a trustee for the benefit of others, a private-purpose trust fund is used
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101
Q

How should additions to the principal for endowments be reported?

A
  • as a separate line item with other financing sources
  • in the government-wide FS, additions should be reported as general revenue
  • Not operating revenue by permanent funds
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102
Q

What are the two proprietary funds?

A
  1. Enterprise funds
  2. Internal service funds (ISF)
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103
Q

What are enterprise funds used for?

A

To report any activity for which a user fee is charged to external users for goods and services

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104
Q

What are internal service funds (ISF) used for?

A

To account for the financing of goods or services, provided by one department or agency to other departments or agencies of the government unit or other government units on a reimbursement basis if the reporting government is the predominant participant

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105
Q

What determines which proprietary fund type to use?

A

It depends on the primary customer

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106
Q

What are some examples of an enterprise fund charging an internal department that is supported by the general fund for goods or services?

A
  1. A water and sewer utility charges the government for services Payments are made from the general fund to the enterprise fund
  2. An internal service fund charges operations of supported by enterprise funds for goods or services
107
Q

What activities are generally reported in proprietary funds?

A

Services funded fully or partially by user fees that are structured to recover the cost of providing the specific services

108
Q

When are proprietary fund revenues and expenses recorded?

A

— accrue revenue earned
- expenses when incurred

109
Q

What are enterprise funds used for?

A
  • To report the business type activities of governmental entities, such as utilities or transit operations
  • to report operations financed and operated in a manner like private businesses
110
Q

In accordance with GASB Codification Section 1300.109, What criteria automatically requires an activity to be reported as an enterprise fund?

A
  1. Activity is financed with secured solely by the pledge of net revenues from fees and charges of activity. Death is secured by the pledge of revenues from fees and charges in the full faith and credit of the related primary government or component unit, even if that government is not expected to make any payments it is not payable solely fees and charges of activity.
  2. Regulations require the activities cost of providing services, including capital costs, be recovered with fees, and charges rather than with taxes or similar revenues
  3. Pacing policies of activity, established fees, and charges designed to cover its costs including capital cost.
111
Q

What is the most frequent use of enterprise fund accounting?

A

Public utilities:
- Sewage treatment and disposal enterprises
- Solid waste collection activities where a fee is charged to each customer.
- water and sewer services
- Public electric utilities

112
Q

Why are other activities that may use enterprise fund accounting?

A
  • municipal golf course operations
  • Recreation centers
  • Emergency medical services
  • Municipal waste landfills
  • Public hospitals
  • Public universities
  • Public sector risk pools
  • Public transit systems
  • Athletic areas and convention facilities
113
Q

Where are enterprise funds typically reported in the government wide of financial statements?

A

They reported as business type activities

114
Q

For internal service funds, where are amounts billed to and amount received from other funds for good and services provided reported?

A
  • reported as revenue in the internal service fund
  • reported as an expenditure/expense in the fund receiving the goods and services
115
Q

What is the major purpose of internal service fund accounting and reporting?

A

To be able to identify an accumulate the cost for assorted services and facilities used by funds, entities, and programs throughout the government, and to charge these funds for the cost of the centralized services

These types of services and facilities can be more efficiently managed on a centralized basis

116
Q

What funds does GASB Codification Section C50.120 allow government to account for centralized risk financing activities?

A

The general fund or an internal service fund

Insurance arrangements allow government entities to share risk and consolidate reserves for efficient investment management

117
Q

How are internal service funds reconciled to the government wide financial statements?

A

The reclassified based on the predominant participants

  • Most likely the predominant participants are governmental activities reported and governmental funds plus assets and liabilities of the internal service fund are typically classified as government activities
  • if the predominant participants are enterprise funds, then they are reclassified as business type activities
118
Q

What measurement focus and basis of accounting are used for fiduciary funds?

A
  • Economic resources measurement focus
  • Accrual basis of accounting
119
Q

Are fiduciary funds reported in the government wide financial statements?

A

No, they’re only reported in fund financial statements

120
Q

If presented, what types of fiduciary funds are reported in the basic financial statements?

A
  • pension (and other employee benefit) trust funds
  • Investment trust funds
  • Private purpose trust funds
  • Custodial funds
121
Q

What is included in pension (and other employee benefit) trust funds?

A
  • define benefit pension
  • OPEB plans administered through trusts and other employee benefit trust funds where the government has control
122
Q

What is pension administration generally dictated by?

A

The terms of individual retirement plans

A separate fund for each plan is usually required since assets of one plan cannot be commingled with assets of another plan.

123
Q

What are the defined contribution plans?

A

The benefit is based on the contribution plus investment returns that result from contributions

124
Q

What are defined benefit plans?

A

Specify the amount of benefit that will be received by the employee based on several factors, including:
- final average salary
- Length of service
- multiplier, such as one percent for each years of service

Contributions to be paid by employers/employees is based on an actuarial study of the amount needed to pay the benefits

Expense and liability reported for the period based on the study

125
Q

What make up investment trust funds?

A
  1. External portion of investment pools
  2. Individual investment accounts that are held in a trust
126
Q

What did GASB Statement No 3- Accounting and Financial Reporting for Certain Investments and for External Investment Pools create?

A

The notion of investment trust funds

127
Q

How should the government report the sponsoring of one or more external investment pool(s)?

A

The external portion of each pool should be reported as external investment trust funds

128
Q

Who does the external portion of the investment pool belong to?

A

Legally separate entities that are not part of the sponsoring government’s financial reporting entity

129
Q

Who does the internal portion of the investment pool belong to?

A

It belongs to the primary government and its component units

130
Q

How should the internal portion of each investment fund be reported?

A

As an asset in each fund or component unit that maintains an equity portion

131
Q

Where are investments held in investment trust funds reported and at what value?

A
  • fair market value
  • position statement or other statement of financial position
132
Q

What is the fair market value of investments in investment trust funds?

A

The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between participants at the measurement date

133
Q

What are private-purpose trust funds used for?

A

To report arrangements for bequest and other arrangements, where the use of principal and earnings is restricted, and the beneficiaries are outside the government

Beneficiaries can be individuals, private organizations, or other governments

Ex: college savings plans

134
Q

What do private-purpose trust funds include?

A
  • all fiduciary activities that are not pension arrangements
  • OPEB arrangements
  • activities required to be reported in investment trust funds and are held in a trust
135
Q

What are custodial funds?

A

Fiduciary activities that are not required to be reported in the other fiduciary fund types

136
Q

Where are business-type activities, including enterprise funds, may report assets with a corresponding liability in what fund, if those assets, upon receipt, are expected to be held for three months or less?

A

Custodial fund in the statement of net position of the business-type activity

137
Q

If a business-type activity chooses to report assets and liabilities in its statement of net position, where should they report significant additions and deductions?

A

As cash inflows and cash outflows, respectively, in the operating activities category of its statement of cash flows

138
Q

What some examples of common custodial fund activities?

A
  • taxation collected by one government and provided to another government
  • contractor payments upon approval by the government (through a warrant process) but with funds uncleared through the banking process as one of the end of reporting period (in transit amount)
  • many types of student activity funds for schools and public institutions of higher education
  • payroll withholding in transit
139
Q

What fund is always a major fund?

A

General funds

140
Q

How are funds that are not major presented?

A

They’re aggregated into a single column captioned as, for example, “Other Governmental Funds” or “Non-major Enterprise Funds”

141
Q

Which funds can never be a major fund?

A
  • internal service fund (even if the government believes one is important)
  • fiduciary funds
142
Q

How are internal service funds and fiduciary funds reported?

A

They’re aggregated and reported as a single fund type

143
Q

What two criteria need met for a governmental or enterprise fund to be reported as a major fund?

A
  1. Total assets plus differed outflows of resources, liabilities plus deferred inflows of resources, revenues or expenditures/expenses if the fund are at least 10% of the corresponding total for all funds of the category (governmental) or fund type (enterprise)
  2. Total assets plus differed outflows of resources, liabilities plus deferred inflows of resources, revenues or expenditures/expenses if the fund are at least 5% of the corresponding total for all governmental and enterprise funds combined
144
Q

What are the financial statements required for governmental funds?

A
  • balance sheet
  • statement of revenues, expenditures and changes in fund balances (operating statement)
145
Q

What is the balance sheet format for governmental funds?

A

Assets + deferred outflows of resources = liabilities + deferred inflows of resources + fund balances

146
Q

What are deferred inflows of resources (governmental funds)?

A

An acquisition of fund balance that is applicable to a future reporting period

147
Q

What are deferred outflows of resources (governmental funds)?

A

A consumption of fund balance that is applicable to a future reporting period

148
Q

What is the primary reason that deferred inflows and outflows occur?

A

The accounting and reporting of derivative instruments, and/or the accounting and reporting for service concession arrangements

Ex: arrangent requires $1M upfront from operator and covers 10 years. At the start of the agreement, $1M is recognized as deferred inflow by gov. At the end of the first year, gov would recognize $100k and would reduce the deferred inflow by the same amount

149
Q

What do deferred outflows of resources relate to? (Governmental fund)

A

Grant activity or certain taxes

Not common

150
Q

What are the five classifications that fund balance for governmental funds should be reported?

A
  1. Nonspendable fund balance
  2. Restricted fund balance
  3. Committed fund balance
  4. Assigned fund balance
  5. Unassigned fund balance
151
Q

What does the nonspendable fund balance include?

A

Amounts that cannot be spent because they are either
- Not in a spendable form
- legally or contractually required to be maintained intact

152
Q

What is the criteria of “not in spendable form?”

A
  • Items they are not expected to be converted to cash, such as inventory and prepaid amounts
  • Long-term amounts of loans and notes receivable as well as property acquired for resale
153
Q

When should fund balances be reported as restricted?

A

When strength placed on the use of the resources are either:
- Externally, imposed by the creditors, grantors, contributors, or laws or regulations of other government
- imposed by law through constitutional provisions, or enabling legislation

154
Q

What should enabling legislation include?

A

A Illegally enforceable requirement that those resources can be used only for the specific purposes stipulated in the legislation

155
Q

What does legally enforceable mean?

A

The government can be compelled by an external party, such as citizens, public interest groups, or the judiciary to use resources only over the purposes specified in the legislation

156
Q

What amounts are reported committed fund balance?

A

Amounts that can only be used for specific purposes, pursuing to constraints imposed by the formal action of the government’s highest levels of decision making authority

157
Q

What should the authorization specify about the purposes for which amounts can be used for committed fund balance?

A

Purposes for which amounts can be used should have the consent of both the legislative and executive branches of the government if applicable

158
Q

When should the formal action of the governments highest level decision-making authority that commits fund balance to a specific amount should occur?

A

Prior to the end of the reporting period

159
Q

Why are assigned fund balance?

A

Amounts that are constrained by the governments intent to be used for specific purposes, but are neither restricted or committed

160
Q

What are the exceptions for using assigned fund balance?

A

stabilization agreements

161
Q

Who can intent be expressed?

A
  1. The governing body itself.
  2. A body or official to which the governing body has authority to assign amounts to be used for specifics purposes, such as a budget or finance committee.
162
Q

Does the highest level of decision making authority Required to make the assignment to assigned fund balances?

A

No

163
Q

What do assigned fund balances include?

A
  • Amounts in the general fund that are intended to be used for specific purposes
  • All remaining amounts that are reported in governmental funds are non-classified as non-spendable and are neither restricted or committed
164
Q

Can a government report an assignment for an amount to a specific purpose, the assignment would result in a deficit in unassigned fund balances?

A

No

165
Q

What are unassigned fund balances?

A

The amount has not been assigned to other funds and has not been restricted, committed, or assigned to specific purposes within the general fund

166
Q

What is the only fund that should report a positive unassigned fund balance amount?

A

The general fund

167
Q

When can other governmental funds report a negative unassigned fund balance?

A

The expenditures incurred for a specific purposes exceeded the amounts restricted, committed or assigned to the purposes It may be necessary to report a negative unassigned fund balance.

168
Q

What should happen if a negative unassigned balance is reported?

A

The amount assigned to other purposes should be reduced to eliminate the deficit

If the remaining deposit eliminates all other assigned amounts in the fund, the negative residual amount should be classified as unassigned fund balance

A Negative residual amount should not be reported for restricted, committed, or assigned fund balances in any fund

169
Q

What are stabilization arrangements?

A

Situations where governments, formally, set, aside, amounts, or use in emergencies situations or revenue shortages, or budgetary imbalances

Those amounts are subject to controls the dictate circumstances under which the amounts can be spent

170
Q

Where should stabilization amounts be reported?

A

In the general fund as restricted or committed, if they meet the appropriate criteria, based on the source of the constraint on their use

171
Q

Where should stabilization arrangements that do not meet the criteria to be reported within the restricted or committed classification be reported?

A

Unassigned in the general fund

172
Q

Where should significant encumbrances be disclosed?

A

In the notes to the financial statements by major fund, and taken together for non-major funds with required disclosures about other significant commitments

173
Q

How should encumbering amounts for specific purposes for which resources already have been restricted, committed, or assigned be reported?

A

Separately

174
Q

How should encumbered amounts for specific purposes, for which amounts have not been previously restricted, committed or assigned be reported?

A

They should not be classified as unassigned, but instead should be included with committed or assigned fund balances as appropriate

175
Q

Where are the total governmental fund balances reconciled to on the government wide financial statements?

A

A total governmental fund balance on the balance sheet and the position of governmental activities on the statement of net position at the government wide level

176
Q

How are capital assets treated when reconciling the fund balance of funds to the government wide financial statements?

A

Assets are reported on the government wide financial statement of deposition, but not on the fund level balance sheet.

They need to be reported at historical cost minus accumulated depreciation for depreciable assets, and added to the reported amount of fund balance

177
Q

How are prepaid charges (such as expenditures related to insurance policies) treated when reconciling the fund balance of funds to the government wide financial statements?

A

They are assets need to be added to the reported amount of fund balance

178
Q

How are inventories and prepaid items treated when reconciling the fund balance of funds to the government wide financial statements?

A

Inventories and prepaid items not reported on the governmental funds added to the reported amount of fund balance

179
Q

How are long-term liabilities treated when reconciling the fund balance of funds to the government wide financial statements?

A

Long-term liabilities are reported on the government wide statement of net position, but not on the fund level balance sheet.

The balances of long-term liabilities need to be subtracted from the reported amount of fun balance

180
Q

How are revenues that are reported as deferred inflows of resources on the fund statement due to lack of availability be treated when reconciling the fund balance of funds to the government wide financial statements?

A

Revenues that are reported as deferred inflows of resources on the fund statement, due to lack of availability, should not be deferred on the statement of net position, and need to be added to the reported amount of fund balance

181
Q

How are internal service fund assets and liabilities treated when reconciling the fund balance of funds to the government wide financial statements?

A

Internal service fund assets and liabilities need to be added and subtracted, respectively, from the reported amount of fund balance, based on the fund activity as it relates to governmental funds

182
Q

What information does the statement of revenues, expenditures, and changes in fund balances report?

A

Information about inflows, outflows and balances of current financial resources

183
Q

What is the format for the statement of revenues, expenditures, and changes in fund balances? (governmental funds)

A

Revenues (detailed by major revenue source)
- expenditures (detailed at a minimum by function and character)
= excess (deficiency) of revenues over expenditures
+ other financing sources and uses including transfers (detailed)
- Special and extraordinary items (detailed)
= changes in fund balances
Fund balances — beginning of the
Fund balances — end of the period

184
Q

What are the major revenue source classifications on the statement of revenues, expenditures, and changes in fund balances? (governmental funds)

A
  • Taxes (major tax sources are typically reported such as property tax, sales tax, or income tax)
  • Licenses and permits
  • interGovernmental revenues
  • charges for services
  • Fines and forfeitures
  • Miscellaneous
185
Q

What are the major classifications of expenditures on the statement of revenues, expenditures, and changes in fund balances? (governmental funds)

A
  • public safety
  • Public services
  • Health
  • Recreation in general administration

An option is to include the department or agency responsible for the function or program (i.e. police department, fire department)

Activity classifications can also be presented

186
Q

How should expenditures on the statement of revenues, expenditures, and changes the fund balances be reported? (governmental funds)

A

They should be detailed by function or program

An option is to include the department or agency responsible for the function or program (fire department, police department)

187
Q

What does classifying expenditures by character show?

A

The period that, presumably is benefited

Major classifications are current which benefits the current.; Capital outlay, which benefits current and future period; debt service, which benefits past, current, and future periods

If the government has significant shared revenues, that classification would be used

188
Q

What does “other financing sources (uses)” include on the statement of revenues, expenditures, and changes in fund balances? ( governmental funds)

A
  • proceeds from new issuance of debt
  • transfers
  • leases that are not short term
  • payments to escrow agents for an advancing refunding
  • proceeds from the sale of capital assets
189
Q

How should financial statements report proceeds from a debt issue?

A

At face value of the issue and report, separately, associated premiums and discounts

190
Q

Reconciliation is required between the changes in fund balances on the statement of revenues and expenditures, and changes in fund balance of governmental funds, and the changes in net position for governmental activities on the statement of activities

(reconciliation of changes and fund balances to changes in net position)

A

Yes

191
Q

How are capital outlays reconciled between the changes in fund balances on the statement of revenues and expenditures, and changes in fund balance of governmental funds, and the changes in net position for governmental activities on the statement of activities?

A

Capital outlays are reported on the fund statements but not the government-wide statement of activities. Add back the expenditures for capital outlays to the change in fund balance

192
Q

How are proceeds from the sale of capital assets reconciled between the changes in fund balances on the statement of revenues and expenditures, and changes in fund balance of governmental funds, and the changes in net position for governmental activities on the statement of activities?

A

Proceeds from the sale of capital assets are reported on the fund statements. Only the gain and loss from the sale of asssets is reported on the government-wide statement of activities. Subtract the proceeds less the gain on the sale or plus the loss on the sale from the changes in fund balance

193
Q

How is depreciation reconciled between the changes in fund balances on the statement of revenues and expenditures, and changes in fund balance of governmental funds, and the changes in net position for governmental activities on the statement of activities?

A

Depreciation is reported only on the government-wide statement of activities. Subtract depreciation from the change in fund balance.

194
Q

How is principal retirement reconciled between the changes in fund balances on the statement of revenues and expenditures, and changes in fund balance of governmental funds, and the changes in net position for governmental activities on the statement of activities?

A

Principal retirement is reported as expenditures on the fund statements but not the government-wide statements of activities and needs to be added to the change in fund balance

195
Q

How are increases in long term obligations for compensated absences, net position obligations, claims, and judgments, etc, reconciled between the changes in fund balances on the statement of revenues and expenditures, and changes in fund balance of governmental funds, and the changes in net position for governmental activities on the statement of activities?

A

Increases in long-term obligations for compensated balances, net position, obligations, claims and judgments, etc. are not reported on the fund operating statements, since they do not require a use of financial resources. These unreported expenses need to be subtracted from the change in fund balance.

196
Q

How are revenues recognized in governmental funds in the current period that was reported as deferred inflows of resources in prior periods because it was not available reconciled between the changes in fund balances on the statement of revenues and expenditures, and changes in fund balance of governmental funds, and the changes in net position for governmental activities on the statement of activities?

A

Revenues are recognized in governmental funds in the current period, there was not reported as deferred influence of resources in prior periods, because it was not available, it should be subtracted from the change in fund balance

197
Q

How are payments for interest and other expenditures incurred in prior periods reconciled between the changes in fund balances on the statement of revenues and expenditures, and changes in fund balance of governmental funds, and the changes in net position for governmental activities on the statement of activities?

A

Payments for interest, and other expenditures incurred in prior periods, are reported in the fund statements, but are not current period Expenses, and should be added to the change in fund balance.

198
Q

How is interest accruing from the last payment date to the end of the fiscal year reconciled between the changes in fund balances on the statement of revenues and expenditures, and changes in fund balance of governmental funds, and the changes in net position for governmental activities on the statement of activities?

A

Interest accruing from the last payment date to the end of the fiscal year is often not reported in fund statements and should be subtracted from the change in net position

199
Q

How is net operating revenues of internal service funds reconciled between the changes in fund balances on the statement of revenues and expenditures, and changes in fund balance of governmental funds, and the changes in net position for governmental activities on the statement of activities?

A

The net operating revenues of internal service funds are allocated back to customers and reported as programs on the government wide statement of activities. Allocable net operating profit is added to the change in fun balance while net operating loss is subtracted

200
Q

How is issuance of long-term debt reconciled between the changes in fund balances on the statement of revenues and expenditures, and changes in fund balance of governmental funds, and the changes in net position for governmental activities on the statement of activities?

A

Issuance of long-term debt is reported as another financing resource. It is not reported on the government wide statements of net position, and should be subtracted from the change in fund balance.

201
Q

What are the required financial statements for proprietary funds?

A
  • statement of net position
  • Statement of revenues, expenses, and change in fund net position
  • Statement of cash flows
202
Q

What balance sheet formats can entities use for proprietary funds?

A
  1. (assets + deferred outflows of resources = liabilities + deferred inflows of resources + net position)
  2. ((assets + deferred inflows of resources) - liabilities - deferred inflows of resources = net position)
203
Q

How are assets and liabilities presented on the statement of net position for proprietary funds?

A

Liabilities are presented in a classified format, which distinguishes between current and long-term assets and liabilities

204
Q

When should assets be reported as restricted on the statement of net position for proprietary funds?

A
  • Constraints are externally, imposed by creditors, grantors, contributors, or laws, or regulations of other governments

or

  • Imposed through enabling legislation or constitutional provisions
205
Q

What three components should the statement of net position be displayed for proprietary funds?

A
  1. Net investment in capital assets
  2. Restricted.
  3. Unrestricted.
206
Q

Where are capital contributions reported?

A

On the operating statement

207
Q

On the statement of that position for proprietary funds, are major funds, non-major funds, and internal service funds displayed?

A
  • Each major fund is displayed
  • Non-major funds are aggregated in a single column
  • Internal service funds are always aggregated
208
Q

Is the statement of net position reconciled with government wide financial statements (for proprietary funds)?

A

There is no difference between the information reported in enterprise funds of the fund level and the business type activities on the government wide level. Therefore, reconciliation is not needed.

209
Q

When would reconciliation between the statement of net position (for proprietary funds) and the government wide financial statements?

A

Reconciliation is required of a portion of assets in liabilities of internal service bonds are classified as business type activities.

Reconciliation also required if, for example, a fund reported as an enterprise fund is classified as a government activity in the government wide financial statements.

210
Q

What is the format of the statement of revenues, expenses, and changes in fund net position for proprietary funds?

A

Operating revenues (detailed)
Total operating revenues
Operating expenses (detailed)
Total operating expenses
Operating income/loss
Non-operating revenues and expenses (detailed)
Income before other revenues, expenses, gains, losses, and transfers
Capital contributions
Special items
Extraordinary items
Transfers
Increase/decrease in net position
Net position— beginning of period
Net position— end of period

211
Q

What method is used for determining cash flows in the statement of cash flows for proprietary funds?

A

The direct method

Under the direct method, cash inflows, and outflows from operating activities are detailed

212
Q

On a statement of cash flows for proprietary funds, what do inflows include?

A
  • Cash from the sale of goods or services
  • Cash from operating grants and cash Reimbursements of operating transactions.
213
Q

On a statement of cash flows for proprietary funds, what do outflows include?

A
  • Cash payments to acquire materials for providing goods or services
  • Cash payments to other suppliers
  • Cash payments to employees
  • cash payments for taxes and other operating cash payments
214
Q

For the statement of cash flows for proprietary funds, what are some other categories of cash flows?

A
  • non-capital financing activities
  • cash flows from capital and related financing activities
  • Cash flows from investing activities
215
Q

Is reconciliation between operating cash, flows and operating income required for proprietary funds?

A

Yes

216
Q

What are the required financial statements for fiduciary funds?

A
  • statement of fiduciary net position
  • Statement of changes in fiduciary position
217
Q

What is required for each fund type in the financial statements of fiduciary funds?

A

A separate column is required for each fund type

218
Q

Are custodial funds reported on the statement of changes in fiduciary position?

A

No

219
Q

What do state and local governments establish once the budget process is completed and the appropriations are enacted? And why?

A

Budgetary accounts to monitor the receipt of revenues and inccurrences of expenditures, assuring the budget is not overspent

220
Q

What are the four budgetary accounts along with their normal balances?

A
  1. Estimated revenues (debit)
  2. Budgetary fund balance (credit)
  3. Appropriation (credit)
  4. Encumbrances (debit)
221
Q

At the start of the fiscal year, estimated revenues in appropriations are entered into the system. If estimated revenues are greater than appropriations, what journal entry should be recorded?

A

D: estimated revenues
C: appropriations
C: estimated change in balance

222
Q

What journal entry is made if appropriations equal estimated revenues?

A

No journal entry is made to estimated change in fund balance

223
Q

If the government decides to draw down the fund balance, then appropriations would exceed estimated revenues. What would the journal entry be?

A

D: estimated revenues
D: estimated change in fund balance
C: appropriations

224
Q

What is estimated change in fund balance only used for?

A

Entering the budget in the accounting system

225
Q

What is the journal entry for recording revenues when they are received during the year?

A

D: cash
C: revenue

226
Q

What does interim budgetary reporting for revenues show?

A

The difference between estimate revenues and actual revenues

227
Q

A government can modify, estimated revenues. if estimated revenues are increased, what would the journal entry be?

A

D: estimated revenues
C: estimated change in fund balance

228
Q

What would the journal entry be estimated revenues are reduced?

A

D: estimated change in fund balance
C: estimated revenues

229
Q

What is the journal entry for supplemental appropriations made during the year?

A

D: estimated change and fund balance
C: appropriations

230
Q

What does an encumbrance do?

A
  • A budgetary control
  • Allows a government to control the use of appropriation
  • it sets aside a portion of the appropriation, so that funds are available to pay for the goods and services that have been ordered
  • Since the funds have been earmarked for purpose, the transaction needs to be recorded
231
Q

Is an encumbrance a debit or credit in the budgetary system?

A

A debit account

232
Q

What are the different types of offsetting credit accounts for encumbrances?

A
  • Restricted fund balance
  • committed fund balance
  • Assigned fund balance
233
Q

If the encumbrance is to be used to set aside, resources for procurement involving grants, what would the offsetting entry be?

A

Restricted fund balance

234
Q

If the purpose for establishing the cumber is to set aside resources for procurement that required passage of a resolution, all legislation or an ordinance, what would the offset entry be?

A

Committed fund balance

235
Q

If the purpose to use the resources that are not restricted or committed, what would the offsetting entry be?

A

Assigned fund balance

236
Q

What is the journal entry for offsetting credits to record an encumbrance?

A

D: encumbrances
C: restricted/committed/assigned fund balance

237
Q

What does posting an encumbrance affect?

A

The availability of budgetary fund balances by setting aside that portion, so it is not available for future spending

238
Q

What is the journal entry for when goods or services have been received and the encumbrance is relieved and an expenditure posted? (to liquidate the encumbrance and post the receipt of goods or services)

A

D: restricted/committed/assigned fund balance
C: encumbrances

D: expenditures
C: vouchers payable

239
Q

To know the amount available for future spending for the end of the year, what format is used for spending reports?

A

Appropriation - expenditures - encumbrances = available fund balance

240
Q

Are encumbrances treated differently than actual expenditures as far as impact on the appropriation?

A

No

241
Q

What are encumbrances based on?

A

The Estimate of the cost for goods and serviceS

242
Q

What is the amount of relieving encumbrances?

A

Regardless of the difference between the amount encumbered and the actual cost, the amount relieved is the amount established provided additional deliveries, and therefore additional costs are not anticipated

243
Q

A government established an encumbrance for a computer. If the amount was $5000 to be paid by restricted fund balance, what would the journal entry be? (to encumber funds for computer.)

A

D: encumbrances $5000
C: restricted fund balance, $5000

244
Q

If the amount paid by restricted fine balance was $5000 but the actual cost is $4800, what is the journal entry? (record receipt and payment of a computer.)

A

D: restricted fund balance $5000
C: encumbrances $5000

D: expenditures $4800
C: vouchers payable $4800

The government has an additional $200 available for future spending

245
Q

What is required if the invoice is greater than the amount encumbered?

A
  • some governments require encumbrances to be increased
  • Others only require adjustments if the excess is more than a certain dollar amount or percentage such as $100 or 15%
246
Q

What is the journal entry for closing estimated revenues in appropriations?

A

D: appropriations
D: estimated change in fund balance
C: estimated revenue

247
Q

What are the first approach for closing estimated revenues and appropriations?

A
  • Government closed the outstanding incomes in require a new appropriation in the next fiscal year for any goods or services to be received against the encumbrance. When the encumbrance is canceled, fund balance is increased. However, the increase is not available for new appropriations, since a new inference will be established. Therefore there needs to commit/assign a portion of the unbalanced equality conferences that were canceled, and that will be reestablished
248
Q

What are the second approach for closing estimated revenues and appropriations?

A

Government extended life of the encumbrance into the new fiscal year. in this instance, the income is reported, along with expenditures on budgetary comparison statements since incomes are not canceled, restricted/committed/assignment is already established. Encumbrances canceled because the final payment is less than the amount established or reported as lapsed encumbrances and increase fund balance.

249
Q

If an encumbrance was established for $10,000 purchase in the final payment was $9800, what would happen to the remaining $200?

A

The $200 increases the fun balance in the appropriate fund

The adjustment is reported as a change in find balances

250
Q

What budgetary basis do most governments use? What other basis are used?

A
  • Cash basis for inflows and the encumbrance basis for outflows

Or

  • modified accrual basis and current financial resources measurement focus
251
Q

What basis is used for the budget?

A
  • Cash bases for inflows and encumbrances basis for outflows (most common)
  • Modified accrual basis and current financial resources measurement focus
252
Q

When using the cash bases for inflows and encumbrance basis for outflows, when are the following recognized:
- Revenues
- Encumbrances
- Expenditures

A
  • Revenues are recognized when cash is received
  • encumbrances are recognized when a purchase order or other contractual commitment is issued
  • Expenditures are recognized when payment is made
253
Q

When the modified accrual basis and current financial resources measurement, focus is used, when are the following recognized:
- revenues and estimated revenues
- Expenditures
- Encumbrances

A
  • revenues and estimated revenues are recognized when they are measurable and available
  • Expenditures are recognized when a fund liability is incurred, requiring the use of current financial resources
  • under this basis of budgeting, incomes are not considered expenditures, and are recorded as restricted, committed, or assignment of fund balance
254
Q

What is a budgetary comparison schedule? And when is/is it not required?

A
  • required supplemental information (RSI)
  • Presented after the basic statements and the notes
  • Governments have the option of presenting the budgetary comparison as a basic statement
  • required for the general fund and each major special revenue fund with a legally adopted annual budget
  • Not required for capital project, debt service, permanent, or enterprise funds but may do so as a supplementary information
255
Q

What is the budgetary comparison schedule required to present?

A
  • The original budget, final budget, and actual revenues and expenditures on the budgetary basis of accounting
  • there is no requirement to provide a variance between the final budget and actual but government are encouraged to do so (most do)
  • Discussion about significant variances between the original budget and final budget, and final budget and actual, is required in MD&A
  • Governments may also present the variance between the original and final budget
256
Q

What does the original budget include?

A

Any amounts carried forward from prior years pursuant to legal requirements

257
Q

What is included in the final budget?

A

The original budget adjusted by transfers, supplemental appropriations, and any other authorized changes applicable to the year

258
Q

Are governments encouraged the same format, and the budgetary comparison scheduled as it uses in the budget?

A

Yes

259
Q

What are governments required to present when there are significant budgetary perspective differences that result in not being able to present comparison for the general fund and each major special revenue fund?

A
  • They are required to present comparison based on the fund, organization, or program structure that the government uses for it’s legally adopted budget (some governments use budget structures that are not based on the GAAP fund structure)
  • reconciliations between the budget basis and GAAP basis fund level statements
260
Q

When is the reconciliation between the budget comparison schedule and the GAAP operating statement?

A

If the budget is prepared on a basis other than GAAP

261
Q

How can the reconciliation between the budgetary comparison schedule, and the GAAP operating statement be presented?

A

Either as:
- A separate schedule
- In the notes to the RSI

262
Q

What is involved in the reconciliation between the budgetary comparison schedule, and the GAAP operating statement be presented?

A

Transactions that are posted during the year which, on the modified accrual basis, either affect the prior year or subsequent year

Virtually all the reconciling items take place at the start and end of the fiscal year. Majority result from basis differences and timing differences

263
Q

What are transactions typically occur at the start of this year?

A
  • fund balance is a resource on the budget basis, but not on the GAAP basis
  • revenues reported on the cash basis that were earned or due to the government in the prior fiscal year need to be subtracted as sources of resources
  • Payroll expenditures posted in the current year for services provided in the prior fiscal year need to be subtracted from uses of resources
  • Expenditures for goods and services posted in the current year, but provided in the prior fiscal year need to be subtracted as uses of resources
264
Q

What are typical transactions occur at the end of the fiscal year?

A
  • received after the end of the fiscal year, but not considered available financial resources needs to be added to the sources of revenue
  • payroll liabilities incurred prior to the end of year, but not paid until the next year need to be added as uses of resources
  • Liabilities for goods and services received by your end and paid in the following year need to be added as uses of resources
  • Encumbrances posted as expenditures on the budgetary basis are not expenditures on the GAAP basis and need to be subtracted as uses of resources
  • Unrealized gains/losses on investments do not involve cash and need to be added or subtracted as appropriate

Exam (14 decks)

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