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59 Cards in this Set
- Front
- Back
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What are available for use revenues?
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the revenues will be collected within the current period or collected early enough in the next period to be used to pay for expenditures incurred in the current period. (The rule of thumb for available for use is that the revenue is collected within 60 days.)
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What are the 5 classes of income that may be accrued if available for use and measurable?
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1) personal property taxes, (2) real estate property taxes, (3) income taxes, (4) sales taxes, and (5) taxes collected by another governmental unit.
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What is the appropriate basis of accounting for governmental funds?
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Modified accrual basis
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What 4 funds use the accrual basis of accounting?
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(PINE)
Pension trust Internal service Nonexpendable trust Enterprise funds |
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Where should the lease liability of a capital lease be recorded in a city's combined balance sheet?
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General LT Debt Account at the inception of the lease at the PV of the MLP
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What are the general purpose financial statements of a state government comprised of?
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Combined financial statements and related notes
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Why don't Capital project funds record depreciation?
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Capital project funds are designed only for construction in progress and have a limited life encompassing the construction period. Depreciation expense is not recorded during construction.
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When a capital lease of a governmental unit represents the acquisition of a general fixed asset, the acquisition should be reflected as?
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an expenditure, with the asset recorded in the GFAAG. A capital lease is an other financing source, recorded in the GLTDAG.
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Which funds report in the statement of cash flows?
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ONLY proprietary funds
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What are the 3 types of journal entries?
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those to record (and close) the budget, those to record (and close) encumbrances, and those to record (and close) actual activity.
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What is the typical general fund entry to record the budget at the beginning of the year?
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dr Estimated Revenue Control
dr Estimated OFS cr Budgetary fund balance (or dr) cr Estimated OFU cr Appropriations |
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What is the typical general fund journal entry to close the budget at year end?
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dr Appropriations
dr Estimated OFU dr Budgetary Fund Balance (or cr) cr Estimated Revenues cr Estimated OFS |
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When is an encumbrance entry made?
What is the reverse entry? |
- made when an item is ordered in the amount of the estimated cost.
- reverse entry is made for the same dollar amt when the invoice arrives |
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What is the typical general fund journal entry to close the budget at year end?
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dr Appropriations
dr Estimated OFU dr Budgetary Fund Balance (or cr) cr Estimated Revenues cr Estimated OFS |
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What are Special Revenue funds used for?
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Used to account for revenues that are externally restricted or designated by the legislative body for specific gov'tal purpose other than capital projects
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What are Capital Projects funds used for?
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Used to account for the acquisition and use of financial resources to construct or acquire major long-lived general gov't capital facilities. Has a life limited to the construction period.
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What are debt service funds used for?
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Used to account for the accumulation of resources for the periodic payment of interest on and principal of general obligation LT debt
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What are permanent funds used for?
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Used to account for nonexpendable resources that may be used for the governments programs, in other words, to benefit the reporting entity or its citizens.
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What is the GLTDAG accounting equation?
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Amt available in DSF for GLTD Principal Retirement + Amt to be provided in future years of GLTD Principal Retirement = GLTD Payable
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What are internal service funds used for?
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used to account for in-house business enterprise activities; that is, to account for the financing of goods or services provided by one government department or agency to other departments or agencies of the government (and perhaps also to other governments) on a cost reimbursement basis.
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What are fiduciary funds used for?
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Fiduciary funds are used to account for a governments fiduciary or stewardship responsibilities as an agent (agency funds) or trustee (trust funds) for other governments, funds, organizations, and/or individuals.
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What are pension trust funds used for?
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Used to account for a governments fiduciary responsibilities and activities in managing pension or retirement trust funds for its retired, active, and former employees and their beneficiaries.
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What are investment trust funds used for?
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Used to account for a governments fiduciary responsibilities and activities in managing an investment plan.
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What are private-purpose trust funds used for?
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Private-purpose trust funds [PIPPA] are used to account for fiduciary responsibilities and activities in managing all other trust arrangements that benefit individuals, private organizations, or other governments.
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What are agency funds used for?
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Used to account for the custodial activities of a government serving as an agent for other governments, private organizations, or individuals. Agency funds [PIPPA] are purely custodial (assets equal liabilities). The government has no equity in agency funds. Further, agency funds do not have operating accounts (for instance, Revenues). No operating statement is prepared for agency funds.
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What are interfund transactions?
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Interfund transactions simultaneously affect two or more funds of the government. Transfers are nonreciprocal shifts of resources among funds and are not intended to be repaid.
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What are quasi-external tranasactions?
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These are transactions that would result in recognizing revenues and expenditures or expenses, as appropriate, if they were with organizations apart from the government.
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How are contributions to and earnings of a pension trust fund accounted for?
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As revenues of the fund
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What are BANs?
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A governmental unit would issue bond anticipation notes (BANs) to provide funds to defray costs expected to be incurred before the related bonds are issued. Such notes are treated as long-term debt, even if due within one year, if (1) they are to be repaid with the proceeds of the bond issue, (2) all legal steps have been taken to refinance the notes, and (3) the intent is supported by an ability to refinance the short-term notes on a long-term basis.
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How are capital projects fund inflows recorded?
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- revenues -> if from intergovernmental grants and from interest on investments
- OFS -> from bond or other long-term general obligation debt issues and transfers from other funds |
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What are the five types of governmental funds?
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1. General fund
2. Special revenue fund 3. Capital projects fund 4. Permanent fund 5. Debt service fund |
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What type of accounting do proprietary funds and enterprise use?
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normal accrual accounting
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What are the five types of governmental funds?
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1. General fund
2. Special revenue fund 3. Capital projects fund 4. Permanent fund 5. Debt service fund |
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What are the four types of fiduciary funds?
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PIPPA
Pension trust Private-Purpose Trust Investment Trust Agency |
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What is a Residual Equity Transfer (RET)
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Permanent transfer of money from one fund to another fund, but not for operating purposes.
Ex: seed money to get a fund established |
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What is the measurement focus of governmental funds?
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flow of financial resources and financial position
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What accounts are used in a temporary transfer?
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"Cash"
and "Due to X" or "Due from X" |
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What accounts are used in permanent transfer for operating purposes?
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OFU / OFS
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Permanent transfer for non-operating transfer (RET) use what accounts?
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dr Cash
cr OFS: Non operating revenue |
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In a quasi-external transaction (QET), how do the buying fund and selling fund treat the transaction?
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Buying fund --> expense or expenditure
Selling fund --> revenue |
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Under modified accrual, how are restricted resources accounted for (i.e. grant)?
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Restricted money (like a grant) is not allowed to be recognized as revenue until the resources are spent for the restricted purposes. Use deferred revenues until then.
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Under modified accrual, how are bond discounts or premiums treated?
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There is no amortization of the bond discount of premium. Transfer any premium to DSF to help repay principal.
- transfer to DSF by debiting OFU |
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In modified accrual, how is interest accrued?
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IT IS NOT!
- interest or principal is not accrued until it is *matured, due and payable" (DSF) |
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What statements are included in proprietary funds financial statements?
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1. Statement of net assets (BS)
2. Statement of Revenues, Expenses, Changes in Net Assets (IS) 3. Statement of Cash Flow - Operating, Investing, Noncapital financing activities, Capital and Related Activities |
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What statements are included in fiduciary funds' financial statements
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1. Statement of Fiduciary Net Assets (BS)
2. Statement of Changes in Fiduciary Net Assets (IS) |
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6 parts of the CAFR (Comprehensive Annual Financial Report)
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1. Management Discussion & Analysis (MD&A)
2. Financial Statements 3. Notes to financial statements 4. Other Required Supplementary Info (RSI) 5. Combining statements for nonmajor funds and nonmajor component units 6. Individual fund statement and schedules for primary govts funds |
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3 parts of RSI (Required Supplementary Information)
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- MD&A
- Comparison of original to final budget - Infrastructure schedules |
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What is a major fund?
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- general fund (always)
- any fund deemed major by gov't - funds meeting guidelines (any fund whose assets, liabilities, revenues or expenses are at least 10% of category total [i.e. enterprise funds] *AND* at least 5% of total for all funds) |
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Which 2 funds are exempt from consideration of major/non major?
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-internal service funds
-fiduciary funds |
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What does GASB 34 mandate needs to be reconciled?
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-fund balance on fund financial statements to net assets of gov'tal activities in GWS
-change in fund balance on fund f/s to change in net assets of gov'tal activities in GWS |
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What does GASB 34 mandate needs to be reconciled?
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-fund balance on fund financial statements to net assets of gov'tal activities in GWS
-change in fund balance on fund f/s to change in net assets of gov'tal activities in GWS |
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Comparison of JEs MA/A:
Issue long term debt |
Modified Accrual:
dr Cash cr OFS Accrual: dr Cash cr Bonds Payable |
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Comparison of JE for MA/A:
Purchase fixed asset |
Modified Accrual:
dr Expenditure Control cr Cash Accrual: dr PP&E cr Cash |
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Comparison of JE for MA/A:
Repay bond principal |
Modified Accrual:
dr Expenditure control cr Cash Accrual: dr Bonds Payable cr Cash |
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Comparison of JE for MA/A:
Depreciation |
Modified Accrual:
none Accrual: dr Depreciation Expense cr Accum Depreciation |
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When recognize revenue in modified accrual vs accrual?
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MA: available & measurable
A: earned |
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What is the appropriate method of accounting for gov'tal fund budgets?
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Modified accrual
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When a capital lease of a gov'tal unit represents the acquisition of a general asset, how should the acquisition be reflected?
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As both an expenditure and an OFS
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How are general fixed assets acquired by foreclosure recorded?
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At the lower of the amount due for taxes plus foreclusure costs
or the appraised fair market value |
