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86 Cards in this Set

  • Front
  • Back
what account must be closed at the end of every year?

expenditures account

as an exception to using some accrual method for expenditures,

unmatured principal or interest on debt are expensed

government-wide FS consist of what 2 statements?

1. Statement of Net Position


2. Statement of Activities

Estimated Revenues includes

taxes, licenses and fines

proceeds from debt issuance are recorded as either...

-a liability


-proceeds of bonds

fines and forfeitures are recorded as

Charges for Services, rather than General Revenues

Debt issuance costs should

be expensed, except for prepaid insurance, which may either be allocated among accounting periods or expensed

Govt-Wide FS measure what, with what focus, using what type of accounting?

measures Operational Efficiency


Economic Resources focus


uses Accrual Accounting

Funds-Based FS measure what, using what type of accounting?

measures Accountability


uses Modified-Accrual Accounting

2 Required Reconciliations

1. Govt Fund BS to Statement of Net Position


2. Net Change in Fund Balance to Change in Govt-Wide Net Position

3 types of funds

1. governmental


2. proprietary


3. fiduciary

Interfund Transactions - examples of Reciprocal

-interfund loans


-interfund services

Interfund Transactions - examples of Nonreciprocal

-capital contributions


-residual amounts of liquidated funds


-operating subsidies


-interfund reimbursements

Temporary Transfers terminology

due from or due to

Permanent Transfers terminology

Other Financing Uses/Sources

Deferred Outflows of Resources

consumption of net assets applicable to future reporting periods




-reported as a separate section following assets on Statement of FP




i.e. paid in advance, deferred charges, prepaids

Deferred Inflows of Resources

acquisition of net assets applicable to a future reporting period




-reported as a separate section following liabilities on Statement of FP




i.e. money received in advance

Statement of Net Position - 3 components

Net Position rather than Net Assets




1. net investment in capital assets


2. restricted


3. unrestricted

Modified-Accrual Accounting - Grants

cannot recognize grant as revenue until it is spent for the intended purpose

Grants - no time restriction

Cash XX


Def Revenue XX




Def Revenue XX


Revenue XX

Grants - time restriction

Cash XX


Def Inflow XX




when time is met


Def Inflow XX


Revenue XX

Fund Accounting - measurement focus and purpose and accounting method

measurement focus: Current Financial Resources Raised and Expended/Position/Changes in FP/Flow of Resources




purpose: ensures Fiscal Compliance




method: modified-accrual basis

Fund Accounting - revenues are recorded when

measurable and available




available: due and receivable within period and collected or expected to be collected within 60 days after end of fiscal period

Fund Accounting - expenditures are recorded when

measurable, incurred and payable

Governmental Funds - info

no: LT assets, LT debt, related interest, depreciation, or amortization on books




-fixed asset expenditures are expensed (Expenditures Control Account)

5 Types of Governmental Funds

1. general (only one)


2. special revenue


3. capital projects


4. permanent


5. debt service

Governmental Funds - General Fund

accounts for routine operations




-use measurable & available rule for normal taxes: i.e. property, sales, income taxes




-use cash basis for random tax revenues (parking fees, fines)

revenues control account increases when

property taxes are recorded

entry to levy property taxes

Property Tax Rec - current XX


Property Tax Revenue XX


Allow for Uncollectibles XX

Governmental Funds - Special Revenue

restricted to a specific purpose other than debt service or capital good acquisition

Governmental Funds - Capital Projects

restricted for acquisition or construction of major capital facilities




-money received from grants = Revenue


-proceeds from bond issuance and interfund transfers = Other Financing Sources

Governmental Funds - Permanent

endowments; principal is permanently maintained while income is used for specified programs

Governmental Funds - Debt Service

payment of LT general debt principal and interest




-NOT for proprietary of fiduciary funds; their principal and interest are taken from those funds directly

both Proprietary and Fiduciary funds...

-carry LT assets and LT liabilities


-depreciate their own fixed assets


-service their own LT debt and carry related interest expense


-use full-accrual basis


-Economic Resources Measurement Focus

Proprietary Funds - info and types

resemble commercial activities; profit-oriented




1. enterprise funds


2. internal service funds

Proprietary Funds - Enterprise

profit-making focus




i.e. most govt-owned utilities

Proprietary Funds - Internal Service

in-house business activities; cost-reimbursement basis




-temporary transfers do not affect income of fund


-uses Operating Revenues for billing other units

Required Fund FS

1. Statement of Net Position


2. Statement of Revenues, Expenses and Changes in Fund Net Position


3. Statement of Cash Flows (direct method)

Statement of Net Position setup

+ all assets


+ def outflows of resources


- all liabilities


- def inflows of resources


= Net Position

Statement of Revenues, Expenses and Changes in Fund Net Position setup

+ operating revenue


- operating expenses


+ non-operating revenue


- non-operating expenses


= Change in Net Position

Statement of Cash Flows: objective

reconcile Operating Income to Net Cash Flows

Statement of Cash Flows: 4 sections - Cash Flows From...

1. Operating Activities


2. Capital and Related Financing Activities


3. Noncapital Financing Activities


4. Investing Activities

calculate Cash Flows from Operating Activities

operating revenues - operating expenses

what's included in Capital and related financing activities

-buy/sell of PPE


-borrow/repay principal to acquire, construct, or improve capital assets


-interest paid

what's included in Noncapital financing activities

-borrow or repay principal for non-capital purpose


-state subsidies


-interest paid

what's included in Investing activities

-buy/sell of investments


-interest/dividend income

SCF: key FASB and GASB differences

-cash receipts from interest are classified as investing (not operating)


-cash payments for interest are classified as financing (not operating)


-purchases of capital assets are considered financing (not investing)

Fiduciary Funds - 4 types

1. Pension Trust


2. Private Purpose Trust


3. Investment Trust


4. Agency

Fiduciary Fund required FS

1. Statement of Net Position


(assets - liabilities = NP)




2. Statement of Changes in Net Position


-additions/deductions rather than rev/exp


-DO NOT include Agency Funds

Fiduciary Funds are reported...

by fund type, not by major funds

Fiduciary Fund components are reported...

only in fund-based FS, NOT govt-wide FS

entry to record Budgeted Appropriations

Encumbrances XX


Appropriations Control XX

expenditures Multiple Classification Scheme levels

1. fund


2. function/program


3. organizational unit (dept)


4. activity


5. character


6. object (what is acquired) (i.e. salaries)

Fiduciary Funds - Private-Purpose Trust

resources held in trust for the benefit of NON-GOVERNMENTAL parties

debt and lease obligation disclosure requirements

separate disclosure of principal and interest for each of the 5 subsequent years, and in 5 year intervals after that

Defined Benefit Contribution Plan disclosure requirements

types of employees covered and both employee and employer obligations to contribute to the plan

CAFR: 3 main sections

1. introductory


2. financial


3. statistical

CAFR - Introductory section

-letter of transmittal


-organizational chart


-roster of officials


-consultants, indep auditors and advisors

CAFR - Financial section

-independent auditor's report


-RSI


-basic FS

CAFR - what's included in RSI

-MD&A


-budgetary comparison schedules


-combined & indiv FS for nonmajor funds and component units


-nonmajor funds are aggregated in a single column called Other Govt Funds

CAFR - what are the Basic FS?

-govt-wide FS


-fund FS


-notes to FS

CAFR - Statistical section

-ten-year trends info


-revenue and debt capacity info


-demographic info


-operating info

2 levels of CAFR reporting

1. Govt-wide: operational efficiency; accrual


2. Fund-Based: fiscal accountability; modified acc

what funds are not included in govt-wide FS?

fiduciary funds

CAFR - 2 Govt-Wide FS

1. govt-wide statement of Net Position


2. govt-wide statement of Activities




both use:


govt activities


business activities


primary govt totals


discretely presented component units

Govt-Wide Statement of Net Position - govt activities section

1. govt activities


-govt fund assets & liabilities


-general capital assets


-general LT liabilities


-assets & liab of internal service fund activities

Govt-Wide Statement of Net Position - business-type activities section

2. business-type activities


-enterprise activities


-internal service funds (if services are to enterprise funds)

Govt-Wide Statement of Net Position - primary government totals section

presented after eliminating balances between governmental and business-type activities

Govt-Wide Statement of Activities

Upper Section: focuses on cost of services




Lower Section: reports how net program expenses incurred compare with general revenues

Govt-Wide Statement of Activities - Upper Section

-reports Total Exp and Net Rev/Exp by function




Expenses - Program Revenues = Net Rev/Exp

Govt-Wide Statement of Activities - Lower Section

-general revenues


-contributions to permanent funds


-special items


-extraordinary items


-transfers

what's included in Program Revenue?

-operating grants & contributions


-capital grants & contributions


-investment income

what's included in General Revenue?

-all taxes


-unrestricted gifts, grants and investment income


-multi-purpose restricted income

what's included in Other Revenue Items?

-contributions to endowments


-special items


-extraordinary items


-transfers

how is depreciation reported in CAFR?

both general capital assets and business-type capital assets should be allocated to that function

how is interest reported in CAFR?

interest on general LT debt incurred for the benefit of a particular function should be reported as expenses of that function

Component Unit

legal separate organization for which the elected officials of a primary govt are financially accountable




-may be discreetly presented or blended

when are component units blended with primary govt

when component unit is substantially the same as the primary govt




-financial benefit or burden relationship


-component provided services almost totally for primary govt


-total debt outstanding is to be repaid by primary govt

Govt-Funds FS - 5 categories.

1. nonspendable


2. restricted: externally imposed


3. committed: imposed by govt


4. assigned: constrained by govt's intent to be used for a specific purpose, but not committed or assigned


5. unassigned: residual classification for the general fund

Govt-Funds - required FS

-fund BS (sep column for major funds)


-Statement of Rev, Exp and Changes in Fund Bal (reconciles beg and end total fund balance)


-second one for the general fund and major special revenue funds




-budget comparisons may be presented as RSI

what are examples of Other Financing Sources/Uses?

-transfers


-special items


-extraordinary items

2 required Reconciliations to be presented along with Basic FS

1. BS rec: govt fund BS to statement of Net Assets


2. IS rec: Net Change in fund balance to change in Govt-Wide Net Assets

2 types of Reconciling Items

1. explain differences in scope of activities


2. explain differences in accounting bases

BS Rec - how to reconcile

add back:


Capital Assets


Internal Service Fund balance


Accrued Revenues that'll be collected after YE




back out:


Liabilities not due in current period


Accrued Exp that will be paid after YE



IS Rec - how to reconcile

net change in fund balance is converted to economic resources measurement and accrual basis




Capital Assets- capitalize and depreciate


Cap Ass Disposition- report proceeds of sale


Depreciation Exp- deduction


LT Debt- reduce for new debt proceeds


LT Debt- add back debt repayments


Revenues: add back rev that do not provide current financial resources


Expenses: subtract exp that do not take current financial resources

Governmental Organization

a controlling majority of members of governing board are appointed by state government officials