State and Local Governments

Question 1

What is the measurement focus and basis of accounting for governmental funds?

Answer 1

1) Flow of Current Financial Resources and 2) Modified Accrual basis

Question 2

What is the measurement focus and basis of accounting for proprietary funds?

Answer 2

1) Flow of Economic Resources and 2) Accrual basis

Question 3

What are the 5 governmental funds?

Answer 3

General, Special Revenue, Capital Projects, Debt Service & Permanent funds.

Question 4

What are the 2 proprietary funds?

Answer 4

Enterprise (public) & Internal Service (other gov departments)

Question 5

Is depreciation recorded in governmental funds?

Answer 5

NO; depreciation is only recorded for proprietary & fiduciary funds

Question 6

Are nominal or real governmental accounts closed at year-end?

Answer 6

Only nominal accounts (i.e. income statement)
Ex: expenditures

Question 7

What two financial statements are the government-wide financial statements composed of?

Answer 7

1) Statement of Activities and 2) Statement of Net Position

Question 8

What are the 3 criteria for an entity to be considered a primary government?

Answer 8

1) It has a separately elected governing body.
2) It is legally separate.
3) It is fiscally independent of other state and local governments.