Unit 17 - Govt. Accounting Methods Flashcards
Special revenue funds - how are they accounted for?
Special assessments for construction activity may be accounted for in a capital projects fund or other appropriate fund.
The gasoline taxes are special revenues received from the state government to be expended for a specific purpose and are properly recorded in the special revenue funds.
However, special revenue funds need not be used unless they are legally required.
What is a capital projects fund and what is it used for?
A capital projects fund is used to account for the receipt and disbursement of resources restricted to the acquisition of major capital facilities (other than those financed by proprietary and trust funds) through purchase or construction.
What are the 3 categories of fund types that can be used by a state or local govt?
The three categories of fund types that can be used by a state or local government are (1) governmental (general, special revenue, debt service, capital projects, and permanent funds),
(2) proprietary (internal service and enterprise funds), and
(3) fiduciary (pension and other employee benefit trust, investment trust, private-purpose trust, and custodial funds).
In the fund financial statements of which of the following fund types of a city government are revenues and expenditures recognized on the same basis of accounting as the general fund?
A debt service fund is the only type of fund listed that is classified as a governmental fund. The other funds are proprietary or fiduciary.
The modified accrual basis is used to prepare the financial statements for governmental funds.
Proprietary and fiduciary funds are reported on the accrual basis.
Annual Financial reports:
What are the 3 standard sections of a govt. comprehensive annual financial report?
The three standard sections of a state or local government’s comprehensive annual financial report are the introductory section, the financial section, and the statistical section. The statistical section reports (1) financial trends, (2) revenue capacity, (3) debt capacity, (4) demographic and economic information, and (5) operating information.
Annual Financial reports:
What is included in the introductory section of a local govt’s CAFR?
A state or local government must prepare a comprehensive annual financial report. It (1) covers all funds and activities of the primary government and (2) provides an overview of the discretely presented component units of the reporting entity. The comprehensive annual financial report includes introductory, financial, and statistical sections.
The introductory section contains (1) a letter of transmittal from the appropriate government officials, (2) an organization chart, and (3) names of principal officers.
Annual Financial Reports:
In a state or local government’s comprehensive annual financial report, which of the following is required supplementary information (RSI) other than management’s discussion and analysis?
Budgetary comparison schedules.
RSI other than MD&A is presented after the notes to the basic financial statements in a separate section of the comprehensive annual financial report.
RSI other than MD&A includes (1) schedules,
(2) statistical data,
(3) budgetary comparison schedules, and
(4) other information that is an essential part of financial reporting.
It should be presented with, but not as a part of, the basic financial statements of a governmental entity.
Financial reporting by general-purpose governments includes presentation of management’s discussion and analysis as
A description of currently known facts, decisions, or conditions expected to have significant effects on financial activities.
MD&A is required supplementary information (RSI) that precedes the basic financial statements and provides an overview of financial activities. It is based on currently known facts, decisions, or conditions and includes comparisons of the current and prior years, with an emphasis on the current year, based on government-wide information. Currently known facts are those of which management is aware at the audit report date.
What is the fund balance classification of amounts that may be spent only for specific purposes established by a formal act of a state or local government’s highest decision maker?
Committed.
Amounts in committed fund balance may be spent only for specific purposes established by a formal act of the entity’s highest decision maker (e.g., a county commission). This decision maker may redirect the resources by following the necessary due process procedures.
