Section 29 - Govt Accounting Flashcards by Judy Vang

What are the primary objectives of Govt F/S?

1) Compare actual cost with budget
2) Compliance with laws, rules, and regulations
3) Efficiency and effectiveness
4) Financial condition and results of operations

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Who are the primary users of Govt F/S?

1) Citizens
2) Legislative and oversight bodies
3) Investors and creditors

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What are the 3 fund types?

GPF

1) Governmental Funds (modified accrual)
2) Proprietary Funds (accrual)
3) Fiduciary Funds(accrual)

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What are the modified accrual funds for Govt Fund?

PD-Consents-to-Smoking Grass - have a current financial resources focus

1) Permanent
2) Debt Service
3) Capital Projects
4) Special Revenue
5) General

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What is included in Permanent Fund (Govt)?

Legally restricted
Only earnings can be used to fund programs
Principle remains intact

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What is included in Debt Service Fund (Govt)?

-Handles repayment of long-term debt and related interest

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What is included in Capital Projects Fund (Govt)?

-Used to acquire and build facilities

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What is included in Special Revenue Fund (Govt)?

-Restricted for a specific purpose such as street repair

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What is included in General Fund (Govt)?

OPERATING fund of the govt
ie. public safety, public works, parks and rec
revenue source include property taxes, fees, fines, licensees, permits and grants
expenditure include police, education, fire dept

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What are the accrual funds for Proprietary and Fiduciary?

I-PIPE-Alot

Internal service (Proprietary)
Pension trust (Fiduciary)
Investment trust (Fiduciary)
Private-purpose trust (Fiduciary)
Enterprise (Proprietary)
Agency (Fiduciary)

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What are included in Internal Service Fund and Enterprise Fund (Proprietary)?

Internal Service Fund
-serves the need of other govt departments (ie. janitor, IT)

Enterprise Fund
-provides goods and services to external users (ie post office)

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What are included in Agency, Pension Trust, Investment Trust, and Private Purpose Trust (Fiduciary Funds)?

Agency Fund
-Govt acts as an “agent” or custodian

Pension Trust Fund
-Govt is a trustee for a pension plan

Investment Trust Fund
-Govt is trustee over a series of investments

Private Purpose Trust
-Trust that benefits various individuals and entities

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What are the 2 types of Fund Accounting for Govt?

1) Accrual
- current economic resources focus
- revenue recognized when earned

2) Modified accrual
- current financial resources focus
- revenues recognized when AVAILABLE and MEASUREABLE

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How are budget estimated?

Appropriation - highest amount allowed for an expenditure

Encumbrance - records purchases and reserves it

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How are actual budget recorded?

Expenditure - the actual cost of something (not expense since this is modified accrual accounting)

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How do you record the opening budgetary J/E?

Estimated revenues
Estimated other financial sources
   Budgetary fund balance - unreserved (PLUG)
   Appropriation
   Estimated other financial uses

***To close it is the opposite

How many days after the reporting period can certain revenue be accrued to use in the current fiscal period?

60 days - property taxes and grants

What are the 4 types of “non-exchange transactions” that generate revenue for the govt?

1) “Derived” tax revenues
2) “Imposed” tax revenues
3) “Government-mandated” non-exchange transactions
4) “Voluntary” non-exchange transactions

Where do Derived Tax Revenue come from?

Collected by people “doing” things

ie. shopping = sales tax, working = income tax

Where do Imposed Tax Revenue come from?

Assessed just because things “exist”

Property tax on car, fines, forfeits

What are the J/Es to record an expenditure?

Order to purchase supplies
Encumbrances
Reserved for encumbrances

Order is filled (2 J/Es)
1) Reserved for encumbrances
Encumbrances

2) Expenditures
Vouchers payable

Payment made
Vouchers payable
Cash

What are the 2nd and 3rd closing J/E to govt year end?

2nd closing JE - close actual accounts (\$\$ spent)
Revenues
Other financial sources
   Fund balance - unreserved (PLUG
   Expenditures
   Encumbrances (for outstanding PO)
   Other financial uses

3rd closing JE - close open encumbrances
Fund balance - unreserved
Encumbrances

What are the 5 major sections of the Comprehensive Annual Financial Report (CAFR) aka general purpose financial statements?

1) Management discussion and analysis (MDA)
2) Govt-wide financial statements
3) Fund financial statements
4) Notes to the F/S
5) Required supplementary information (RSI) other than MDA

What is included in the MDA portion of the financial report?

comparison with prior year
overall financial statements
individual fund statements
variance analysis
long-term activities
expected events

What are the two f/s included in the Govt-wide Financial Statements?

Statement of Net Position and Statement of Activities - prepared on ACCRUAL BASIS - purpose is to provide OPERATIONAL ACCOUNTABILITY - all activities are included except Fiduciary activities and Discretely presented component units

What is reported on the Statement of Net Position (Govt-wide F/S)

Assets + Deferred Outflows of Resources - Liabilities -Deferred Inflows of Resources = NET POSITION Assets (current and non-current) -ordered by liquidity Deferred Outflows of Resources -Future use of Net Assets Liabilities (current and non-current) -ordered by liquidity Deferred Inflows of Resources -Future increase of Net Assets Restricted Net Assets Unrestricted Net Assets Capital Assets -net of debt Four columns divided into: - Govt activities - Business activities - Total - Component units (if applicable) ``` Capital Assets are show Net of Debt Asset Cost -Accum Depreciation -Asset liabilities =NET ASSETS ``` Infrastructure - modified approach - reported at cost - no accum depreciation

Where are Separately Stated (discreet) and Blended component units stated on the State of Net Position (Govt wide)?

Separately Stated (discreet) - separate in its own column Blended - shown blended in with Govt Activities column

What is reported on the Statement of Activities (Govt-wide F/S)

- Govt activities divided by function - Revenues - general revenues - program revenues

Where are fixed assets and long-term debt reported?

Only in the Govt-wide F/S and not in the Fund F/S

What are the F/S for Fund Financial Statements?

Governmental Fund (MODIFIED ACCRUAL) - Balance Sheet - Statement of revenues, expenditures, and changes in fund balances Proprietary Fund (ACCRUAL) - Statement of Net Position (B/S) - Statement of revenues, expenditures, and changes in fund balances (fund equity) - Statement of cash flows (4 sections) Fiduciary Fund (ACCRUAL) - Statement of Fiduciary Net Position - Statement of Change in Fiduciary Net Position

What are the 4 sections in the Statement of cash flow for Proprietary Funds?

1) Operating - direct method required - NO interest or dividend here 2) Investing - includes interest and div income, loans made 3) Noncapital financing - includes interest exp on unsecured loans, transfers, grants, subsidies, and property taxes received 4) Capital and related financing - interest expense on secured loans for capital assets, financed purchases and sales of capital assets

What is a Major Fund reported on the columns of the Fund F/S?

- General fund - Other funds representing both 10% or more of assets, liabilities, revenues, or expenditures/expenses of Govt or Enterprise category AND 5% of total entity - any other funds management deem useful to present separately

What are the 5 fund balance types?

1) Restricted -restricted by contributor (strict) 2) Committed - restricted by govt (less strict because they can undo restriction) 3) Assigned - INTENDED to be used for a purpose 4) Unassigned - available to be spent 5) Nonspendable - isn't in a "spendable" state (inventory, prepaid expense, long-term loans)

What is required in the Notes to the F/S?

- Summary of accounting policies - Disclosures - Related party transactions - Description of the reporting entity - Segment info for enterprise funds

What are the 4 types of RSI required by GASB?

1) Budgetary Comparison Schedule (BCS) - budget vs actual 2) Info about Infrastructure Assets (for entities using Modified Approach) 3) Claims Development Information When the Govt Sponsors a Public Entity Risk Pool 4) 2 pension schedules

What are the 4 types of cash transfer?

1) Operating transfer "interfund transfer" - most common, transfer of cash from one fund to finance current period activities in anther fund 2) Quasi-external transactions - payments from one fund to another for services or goods 3) Reimbursements - repayments from one fund to another for costs paid earlier on its behalf 4) Loans - temporary transfers between funds that are to be repaid at a later date