State & Local Govt's Part 1

Question 1

Conceptual Framework of State and Local Governments Concepts

Answer 1

1. Accountability AND 2. Inter-period equity

Question 2

Governmental Accounting Standards Board (GASB)

Answer 2

Primary authoritative body for accounting standards for governmental funds

Question 3

Primary Intended Users of Governmental Financial Statements

Answer 3

1. Citizens/taxpayers
2. School Boards
3. Investors/Creditors

Question 4

Measurement Focus for Governmental Fund Accounting

Answer 4

Flow of current financial resources to show extent of financial resources obtained in the current period to cover claims against financial resources in current period

Question 5

Basis of Accounting for Governmental Fund Accounting

Answer 5

Modified Accrual is used which means revenue is recorded when measurable and available.

Question 6

Measurement Focus of Proprietary Fund Accounting

Answer 6

Flow of economic resources (similar to GAAP accounting)

Question 7

Basis of Accounting for Proprietary Fund Accounting

Answer 7

Full accrual basis which means revenue is recognized when measurable and earned (like GAAP)

Question 8

Categories of Funds

Answer 8

1. Governmental - general government financial resources
2. Proprietary - business-type activities
3. Fiduciary - resources held by government as a trustee/agent

Question 9

Types of Governmental-type funds

Answer 9

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

Question 10

General Funds

Answer 10

Governmental-type; accounts for everything not required to belong in another fund

Question 11

Special Revenue Funds

Answer 11

Governmental-type; account for revenue sources that are restricted or committed to be spent for specific purposes other than debt services or capital projects

Question 12

Capital Projects Funds

Answer 12

Governmental-type; funds restricted for construction or acquisition of capital facilities

Question 13

Debt Service Funds

Answer 13

Governmental-type; funds restricted/committed for debt service principal or interest expenditures of governmental type funds

Question 14

Permanent Funds

Answer 14

Governmental-type; endowments for the earnings are restricted to support government programs dedicated for public purposes

Question 15

Types of Proprietary Funds

Answer 15

1. Internal Service Funds

2. Enterprise

Question 16

Enterprise Fund

Answer 16

Proprietary-type; business-type activities that the public is the primary user of

Question 17

Internal Service Funds

Answer 17

Proprietary-type; business-type activities where other governmental agencies are the primary users

Question 18

Types of Fiduciary Funds

Answer 18

1. Pension Trust Funds
2. Private Purpose Trust Funds
3. Investment Trust Funds
4. Agency/Custodial Funds

Question 19

Pension Trust Funds

Answer 19

Fiduciary-type; assets held in trust to provide employee retirement benefits

Question 20

Private Purpose Trust Funds

Answer 20

Fiduciary-type; assets held in trust to benefit individuals

Question 21

Investment Trust Funds

Answer 21

Fiduciary-type; assets held in trust for other governments

Question 22

Agency/Custodial Trust Funds

Answer 22

Fiduciary-type; assets held in custodial capacity

Question 23

Relevance

Answer 23

The info must bear a logical relationship with the needs for its’ purpose; most difficult characteristic of service efforts/accomplishments to report

Question 24

Definition of a Fund

Answer 24

Fiscal and accounting entity segregated for the purpose of carrying on specific activities or attaining certain objectives; records cash and other financial resources

Question 25

Accountability

Answer 25

Primary objective of financial reporting by state and local governments; efficient and effective delivery of services with public resources

Question 26

Inter-period Equity

Answer 26

An event that supports this objective is adopting a balanced budget

Question 27

Governmental Funds Measurement Focus

Answer 27

Flow of current financial resources and resulting financial position

Question 28

Permanent Fund

Answer 28

Used to report resources legally restricted to extent income or earnings, not principal, may be used for purposes supporting the reporting government's programs for the benefit of the public

Question 29

Governmental Funds Financial Statements

Answer 29

1. Balance Sheet 2. Statement of Revenues, Expenditures, and Changes in Fund Balance 3. NO statement of cash flows

Question 30

Governmental Funds Balance Sheet

Answer 30

1. Assets and Deferred Outflows of Resources 2. Liabilities and Deferred Inflows of Resources 3. Fund Balance

Question 31

Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balance

Answer 31

1. Revenue section 2. Expenditure section 3. Other financing sources

Question 32

Proceeds from Long Term debt in Governmental Funds

Answer 32

Recorded as "Other Financing Sources" on the statement of revenues, expenditures, and changes in fund balance

Question 33

Permanent Fund Investments

Answer 33

Required to be recorded at fair value

Question 34

Bond Anticipation Notes

Answer 34

Are current liabilities if gov't doesn't have the ability to refinance as a non-current obligation

Question 35

Fixed Assets Governmental Funds

Answer 35

Not anticipated to contribute to generation of governmental fund revenue

Question 36

Derived (non-exchange) Tax Revenues

Answer 36

Represent taxes imposed on or derived from exchange transactions such as commercial sales - non-reciprocal

Question 37

Journal Entry to record the Budget in a Governmental Fund

Answer 37

Dr Estimated Revenues Cr. Appropriations Cr. Budgetary Control

Question 38

Journal Entry to record Salaries & Wages incurred

Answer 38

Dr. Expenditures - salaries & wages | Cr. Salaries Payable

Question 39

Journal Entry to record when property taxes are levied

Answer 39

Dr. Property Taxes Receivable Cr. Allowance for uncollectible property taxes Cr. Revenues

Question 40

Expenditures extending more than one accounting period

Answer 40

May be allocated between or among accounting periods or may be accounted for as an expenditure of the period of acquisition

Question 41

Purchases Method for Inventory

Answer 41

Initially records additions to inventory as an expenditure then estimated inventory balances and related non-separable fund balance amounts based on physical counts/valuations at YE

Question 42

Unassigned Fund Balance

Answer 42

The amount of current resources carried forward into the following year that will be available for appropriations; increase when appropriations > expenditures

Question 43

Exception to Modified Accrual Rule

Answer 43

Interest/Principal payments for long-term debt; recorded when they become due and payable, not when they accrue

Question 44

Transfers Out

Answer 44

Fall under "Other Financing Sources" on the Statement of Revenues, Expenditures, and Changes in Fund Balance

Question 45

Debt Service Cash Receipts/Payments

Answer 45

1. Receipts = Transfer | 2. Payments = Expenditures

Question 46

Journal Entry to record the payment of principal and interest

Answer 46

Dr. Expenditures control (prin. + interest) | Cr. Cash

Question 47

Governmental Booking/Closing

Answer 47

Book: Budget, Activity, Encumbrances Close: Budget, Activity, Encumbrances

Question 48

Journal Entry at Period End to Reverse Budget

Answer 48

Reversed for the same dollar amounts as the original budgetary journal entry Dr. Appropriations Dr. Budgetary Control Cr. Estimated Revenues

Question 49

Depreciation

Answer 49

Recorded in the Proprietary Funds and NOT Governmental Funds