Test 1 Flashcards
Accountability
Being obliged to explain one’s actions, to justify what one does; the requirement for government to answer to its citizenry—to justify the raising of public resources and expenditure of those resources. Also, in the GASB’s view, the obligation to report whether the government operated within appropriate legal constraints; whether resources were used efficiently, economically, and effective
Basic Financial Statements
Term used in GASB standards to describe required government-wide and fund financial statements.
Comprehensive Annual Financial Report
A government’s annual report that contains three sections: introductory, financial, and statistical. A CAFR provides financial information beyond the general purpose external financial statements and conforms to guidance in the GASB Codification.
Donor- Imposed Restrictions
Donor stipulations that specify use for a contributed asset that is more specific than broad limits resulting from the nature of the not-for-profit entity, the environment in which it operates, or the purposes specified in its articles of incorporation or bylaws. A donor-imposed restriction may be temporary or permanent.
Federal Accounting Standards Advisory Board
The nine member standards-setting body that recommends federal governmental accounting and financial reporting standards to the U.S. Comptroller General, Secretary of the Treasury, and Director of the Office of Management and Budget.
Financial Accounting Standards Board
The designated organization in the private sector for establishing standards of financial accounting and reporting since 1973.
Fiscal Accountability
Current-period financial position and budgetary compliance reported in fund-type financial statements of governments.
fund financial statements
A category of the basic financial statements that assist in assessing fiscal accountability.
general purpose governments
Governments that provide many categories of services to their residents, such as states, counties, municipalities, and townships. Typical services include public safety, road maintenance, and health and welfare.
generally accepted accounting principles
The body of accounting and financial reporting standards, conventions, and practices that have authoritative support from standards-setting bodies such as the Governmental Accounting Standards Board and the Financial Accounting Standards Board, or for which a degree of consensus exists among accounting professionals at a given point in time. Generally accepted accounting principles are continually evolving as changes occur in the reporting environment.
governmental accounting standards boardThe independent agency established under the Financial Accounting Foundation in 1984 as the official body designated by the AICPA to set accounting and financial reporting standards for state and local governments.
government wide financial statements
Two statements prescribed by GASB standards designed to provide a highly aggregated overview of a government’s net position and results of financial activities.
interperiod equity
A term coined by the Governmental Accounting Standards Board indicating the extent to which current-period revenues are adequate to pay for current-period services; and whether the burden for services previously provided will be shifted to future taxpayers.
managers discussion and analysis
Narrative information, in addition to the basic financial statements, in which management provides a brief, objective, and easily readable analysis of the government’s financial performance for the year and its financial position at year-end. An MD&A is required for state and local governments and federal agencies.
Modified Accrual
Under the modified accrual basis of accounting, required for use by governmental funds (q.v.), revenues are recognized in the period in which they become available and measurable, and expenditures are recognized at the time a liability is incurred pursuant to appropriation authority.
