Governmental Test

Front 1

when is a capital projects fund used by a governmental entity

Back 1

to account for financial resources that are to be used for general government projects and other capital outlay (buildings, highways, water drainage systems and bridges)

Front 2

what are typical sources of financing for general government capital projects

Back 2

bond issues, intergovernmental grants, investment income, transfers from other funds, short term debt, BAN

Front 3

under what circumstances should short term bond anticipation notes be reported as general long term liabilities

Back 3

1. The government has taken all legal steps necessary to refinance the BANs on a long-term basis, and
2. The government’s intent to refinance the BANs on a long-term basis is supported by the ability to do so

Front 4

interest earned in excess of interest paid on tax exempt debt

Back 4

arbitrage

Front 5

have a "put" or provision that allows the holder to require redeemment by the issuer at any time

Back 5

demand bonds

Front 6

what is the purpose of a debt service fund

Back 6

to account for and report financial resources that are restricted, committed, or assigned to expenditure for principal and interest

Front 7

what are the main sources of resources for a debt service fund

Back 7

property taxes, sales taxes, or contributions from other funds

Front 8

debt that has been extinguished, and removed from the GLTL accounts, and not reported in the SLG's balance sheet

Back 8

defeasance

Front 9

retirement of the old issued bond

Back 9

current refunding

Front 10

legal or in substance defeasance of the old issued bond

Back 10

advance refunding

Front 11

what is meant by "cost" when determining what costs to be assigned to a capital asset

Back 11

the value of consideration given or received-normal and necessary outlays incurred to bring the asset ready for its intended use

Front 12

the power of government to seize private property for public use, with compensation being determined through the courts

Back 12

eminent domain

Front 13

title to property is vested in or reverts to the government b/c the rightful owner does not come forward to claim it or dies without known heirs

Back 13

escheat

Front 14

what approach should be used to measure a capital asset impairment loss that results from physical damage

Back 14

restoration cost approach

Front 15

what approach should be used to measure a capital asset impairment loss that results from changes in legal or environmental factors

Back 15

service units approach

Front 16

what approach should be used to measure a capital asset impairment loss that results from change in duration of use

Back 16

deflated depreciation replacement cost approach

Front 17

infrastructure assets are part of a network and not required to be depreciated and most costs incurred to maintain the network are expensed after meeting two requirements

Back 17

modified approach

Front 18

what are the characteristics of an impaired capital asset

Back 18

significant (material), unexpected, decline in the service utility of a capital asset

Front 19

the proprietary fund accounting equation

Back 19

Current A + noncurrent A = current L +
long term L + net assets

Front 20

When is a enterprise fund required to be used?

Back 20

account for activities in which the government sells goods and services to external users

Front 21

3 components of net assests

Back 21

Invested in capital assets (net of related debt), restricted, unrestricted

Front 22

what are the required financial statements for a proprietary fund?

Back 22

Balance Sheet (Statement of Net Assets)
Statement of Revenues, Expenses, and Changes in Net Assets
Statement of Cash Flows

Front 23

What are the major classifications of cash flows that must be presented for a proprietary fund? (4 of them)

Back 23

cash flows from operating activities, noncapital financing activities, capital and related financing activites, investing activities

Front 24

what determines whether cash borrowed is reported as cash flows from noncapital financ. act. or capital and related fin. act.?

Back 24

if cash borrowed is clearly and specifically for the purpose of defraying capital asset costs, it is reported in capital and related financing activities; all other goes to noncapital

Front 25

most common examples of goverement activites that are reported in enterprise funds

Back 25

public sector utilites such as water and sewer departments, electric utilities, and gas utilities

Front 26

proceeds are used to retire or defease proprietary fund debt prior to its scheduled maturity date

Back 26

refunding

Front 27

Where are capital assets acquired through a CPF and the long term debt to finance capital projects accounted for

Back 27

The capital assets acquired normally are capitalized in the General Capital Assets and General Long-Term Liabilities accounts

Front 28

when GAAP requires that a Debt Service Fund be used to account for debt service on general long-term liabilities

Back 28

if either of the following is true:

(a) Use of Debt Service Fund is legally or contractually mandated
(b) Resources are being accumulated currently to be used for debt service requirements in the future

Front 29

What criteria must be met for a govt to have option of accruing unmatured interest in its general obligation bonds

Back 29

if two conditions are met. First, the interest payment must be due within one month after the fiscal year-end. Second, the government must have sufficient dedicated resources set aside in a Debt Service Fund to provide for making the payments when they are due.

Front 30

The appreciation in value of sinking fund securities should be recorded in...

Back 30

Debt Service funds accounts...same for declining value securities

Front 31

When should bond interest and or principal due soon in the next year be accrued as expenditures and liabilities of DSF

Back 31

Both bond principal and interest to be paid within the first month of the next year may be accrued as expenditures and current liabilities of a Debt Service Fund if they are to be paid from assets currently in the Debt Service Fund that are dedicated for that purpose

Front 32

When should bond interest and or principal due soon in the next year not be accrued as expenditures and liabilities of DSF

Back 32

if they are not to be paid from dedicated assets in the fund at year end. Likewise, bond principal and interest on general long-term liabilities that is due more than one month after year end should not be accrued.

Front 33

what are the key differences between cash flow statement requirements for enterprise funds and those for business enterprises

Back 33

governments must report cash flows in four different categories compared to three for business enterprises;the cash flow category titles that the two types of entities have in common are defined to include significantly different transactions

Front 34

why is an internal service fund not typically subject to fixed budgetary control

Back 34

The level of activity—and hence the expenditure requirements and revenues—of an Internal Service Fund are determined by the demands of the user departments for its services. Hence, the Internal Service Fund should not normally be constrained to fixed budget limitations that might hamper its ability to fulfill its service functions

Front 35

in what ways might the original capital required to establish an internal service fund be acquired

Back 35

transfers or advances from the general fund, Proceeds of bond issues,Transfer of existing equipment or inventory, and Grants or advances

Front 36

when would the Direct cost of goods or services provided, with no provision being made for items such as depreciation or overhead be appropriate as the basis for Internal Service Fund reimbursement

Back 36

1) such other costs (other than direct costs) are immaterial and (2) when such costs as salary or other overhead are being financed through separate departmental appropriations

Front 37

what approaches may a govt use to establish the charges that a Self-insurance internal service fund should levy on user funds

Back 37

estimate the total costs expected to be incurred and the total quantity of goods or services expected to be required and charge the departments or agencies based on actual costs

Front 38

when should combining internal service fund financial statements be presented in a CAFR...and where

Back 38

Governments with more than one Internal Service Fund; in the combining and individual funds financial statements in the financial section.

Front 39

what financial statements must a govt present for an internal service fund

Back 39

• Balance sheet (Statement of net assets)
• Statement of revenues, expenses, and changes in net assets
• Statement of cash flows