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__ __ governments provide a broad array of services examples include: city of oxford, federal govt., & state of mississippi - ✔✔general purpose __ __ governments usually provide only a single or just a few services examples include: public colleges, public hospitals, fire stations, & transportation authorities - ✔✔special purpose characteristics distinguishing state&local governments and non-profits from business organizations:
- ✔✔- receipts of significant amounts of resources from resource providers who do not expect to receive repayment proportionate to resources provided
- operating purposes that are other than to provide goods and services at a profit
- absence of defined ownership interests for governmental entities, power ultimately rests in the hands of the ____ - ✔✔people FASB, the ___ ___ __ __, sets GAAP and financial reporting standards for what types of organizations? a. governmental NFPs b. business and nongovernmental NFPs c. federal govt. and other departments - ✔✔financial accounting standards board; b GASB, the __ __ __ __, sets GAAP and financial reporting standards for what types of organizations?
a. governmental NFPs b. business and nongovernmental NFPs c. federal govt. and other departments - ✔✔governmental accounting standards board; a FASAB, __ __ __ __ __, sets GAAP and financial reporting standards for what types of organizations? a. governmental NFPs b. business and nongovernmental NFPs c. federal govt. and other departments - ✔✔federal accounting standards advisory board; c objectives of financial reporting for business organizations:
- ✔✔1. provide useful information for making invest and credit decisions
provide information to assess the amounts, timing, and uncertainty of a firm's future cash flows
provide information about a firm's resources, claims on these resources, and changes in these resources ___ is the cornerstone of all financial reporting in a government - ✔✔accountability accountability arises from citizens' __ __ __ - ✔✔right to know ___ ___ for a government is defined as a their obligation to disclose whether current year revenues were sufficient to pay for current year benefits - ✔✔inter period equity objectives of financial reporting for state and local governments:
3 sections of a comprehensive annual financial report (CAFR):
- ✔✔1. introductory section
financial section
statistical section major federal agencies and departments must prepare a __ __ __ (PAR) - ✔✔performance and accountability report primary purpose for a not-for-profit organization: - ✔✔to provide decision useful financial information to resource providers, such as donors, members, and creditors FASB requires that ALL NFPs must provide what 3 financial statements? - ✔✔1. statement of financial position
statement of activities
statement of cash flows government wide financial statements have a measurement focus:? basis of accounting:? accountability:? - ✔✔measurement focus: economic resources basis of accounting: accrual accountability: operational primary government financial information reported in two columns -- ____ ___ and ___ ___ - ✔✔governmental activities and business activities which type of activity is NOT reported in the govt. wide financial statements? - ✔✔fiduciary activities
5 types of governmental funds: - ✔✔1. general
- special revenue
- permanent
- capital projects
- debt service 2 types of proprietary funds: - ✔✔1. enterprise
- internal service 5 types of fiduciary funds: - ✔✔1. custodial
- trust
- pension trust
- investment trust
- private purpose trust which type of governmental fund: can only be one per government; most financial transactions related to general government operating activities are recorded here a. general fund b. special revenue fund c. capital project fund d. debt service fund e. permanent fund - ✔✔a which type of governmental fund: are used when revenues are restricted or committed for specified operating purposes, such as maintenance of roads and bridges or operation of a library
accounts for resources provided by a trust for which the principal is not spendable, and the earnings on the principal required to be used for a public purpose a. general fund b. special revenue fund c. capital project fund d. debt service fund e. permanent fund - ✔✔e governmental funds have a measurement focus:? basis of accounting:? accountability:? - ✔✔focus: current financial resources basis: modified accrual accountability: fiscal required financial statements of governmental funds: - ✔✔1. balance sheet
- reconciliation of total fund balances
- statement of revenues, expenditures, and changes in fund balances
- reconciliation of total changes in fund balance ___ ___ __ is a proprietary fund that accounts for activities in which goods or services are provided to other departments of the same government for a charge - ✔✔internal service fund (reported in govt. activities on govt wide statement) __ __ is a proprietary fund that accounts for activities in which goods or services are provided to the general public for a charge - ✔✔enterprise fund
(reported as business type activity on govt. wide statement) a __ fund is ALWAYS considered a major fund - ✔✔general 3 steps to determine if a fund should be realized as a major fund: - ✔✔1. identify fund as governmental or proprietary
- if fund element is greater than or equal to 10% of total element then continue
- compare element from step 2 to corresponding element of governmental and enterprise funds combined and if that element is greater or equal to 5% then major True or False: expenditures are never recorded in governmental funds - ✔✔false True or False: governmental funds are identical to governmental activities, proprietary funds are identical to business- type activities, and fiduciary funds are identical to fiduciary activities of a government - ✔✔false True or False: in the governmental fund financial statements, the only individual funds for which financial information is reported in separate columns are major funds. - ✔✔true True or False: proprietary funds primarily provide services to the general public for a fee - ✔✔false True or False: financial information for a trust and custodial funds is reported on both the government wide and fiduciary financial statements - ✔✔false True or False: a deferred inflow of resources is defined as an acquisition of net assets by the government that is applicable to a future reporting period - ✔✔true
3 categories or program revenues in the govt.-wide statement of activities: - ✔✔1. charges for services
- operating grants and contributions
- capital grants and contributions on a government-wide statement of activities, extraordinary items mean something that is: a. unusual in nature only b. infrequent in occurrence only c. both unusual in nature and infrequent in occurrence d. either unusual in nature or infrequent in occurrence - ✔✔c (ex. hurricane if its not normal in that location) on a government-wide statement of activities, special items mean something that is: a. unusual in nature only b. infrequent in occurrence only c. both unusual in nature and infrequent in occurrence d. either unusual in nature or infrequent in occurrence - ✔✔d (ex. sale of proceeds of a significant asset sale) (also has to be within the control of management) 5 types of governmental fund balances: - ✔✔1. non-spendable
- restricted
- committed
- assigned
- unassigned resources include amounts that are not in spendable form or are legally or contractually required to be maintained in tact. which type of governmental fund balance is being described? a. non-spendable b. restricted c. committed d. assigned e. unassigned - ✔✔a resources include amounts constrained to specific purposes by their providers, through constitutional provisions, or by enabling legislation; externally imposed. which type of governmental fund balance is being described? a. non-spendable b. restricted c. committed d. assigned e. unassigned - ✔✔b (*most constrained type of spendable) resources include contractual obligations, rainy day, or stabilization funds. these funds cannot be used for any other purpose unless the govt. removes or changes the specified use by taking the same formal action that originally imposed the constraint; comes from the highest level of government. which type of governmental fund balance is being described? a. non-spendable b. restricted
e. unassigned - ✔✔c Allentown determined that the Permanent fund has a balance of $77, which type of governmental fund balance is being described? a. non-spendable b. restricted c. committed d. assigned e. unassigned - ✔✔a Allentown issued bonds that sold at a premium. At management's discretion the decision has been made to use the premium to retire debt. which type of governmental fund balance is being described? a. non-spendable b. restricted c. committed d. assigned e. unassigned - ✔✔d (b/c "management discretion) a capital project fund has $85,000 remaining after the project is completed. allentown had issued bonds to fund the construction which type of governmental fund balance is being described? a. non-spendable b. restricted c. committed d. assigned
e. unassigned - ✔✔b (b/c borrowed $ from external source) the federal government has provided a grant for emergency flood assistance that can only be used to help families affected by the recent flood. allentown determined $500,000 of the grant funds remained at year end. which type of governmental fund balance is being described? a. non-spendable b. restricted c. committed d. assigned e. unassigned - ✔✔b (b/c it comes from outside state govt. --> comes from federal govt. which is external source) tax revenue is recognized when ___ and is measurable/collected when __ - ✔✔recognized: when levied (bills sent out) measurable: will be paid within 1 year & 60 days for governmental fund, revenue is recorded when: - ✔✔both measurable and available to finance expenditures made during the current period when do you recognize taxes being levied and collected while using the: accrual method? modified accrual method? - ✔✔accrual: recognize total amount you levy in the year you levy modified: recognize in the year you levy as long as its before 60 days after last day of fiscal year
classification of expenditures & appropriations:
- ✔✔1. function or program (why am i spending $)
organization unit (who is spending $)
activity (how is $ being spent)
character (when is $ being spent)
object (what is $ being spent on) stopped on CHAPTER 4 pg1 - ✔✔ a __ __ __ is defined as a line of credit to meet short-term cash needs of a local government - ✔✔tax anticipation notes (TANs) When equipment was purchased with General Fund resources, which of the following accounts would have been debited in the General Fund? a. expenditures b. equipment c. encumbrances
d. no entry should be made - ✔✔a goods for which a purchase order had been placed at an estimate cost of $1,600 were received at an actual cost of $1,550. The journal entry in the general fund to record the receipt of the goods will include: a. debit to encumbrances outstanding for $1, b. credit to vouchers payable for $1, c. debit to expenditure for $1, d. all of the above are correct - ✔✔d which of the following items would be reported as general revenue on the govt. wide statement of activities? a. parking fines b. federal grants earmarked for specific programs c. animal licensing fees d. sales tax earmarked for maintenance of roads and bridges - ✔✔d an __ __ transaction is defined as a transaction between two governmental funds (including an internal service fund) or between two enterprise funds - ✔✔intra activity an __ __ transaction is defined as a loan or transfer between a governmental fund (including internal service fund) and an enterprise fund - ✔✔inter activity The Village of Frederick borrowed $1,000,000 from a local bank by issuing 4 percent tax anticipation notes. If the village repaid the tax anticipation notes six months later after collecting its next installment of property taxes, the General Fund journal entry to record the repayment will include: a. a debit to tax anticipation note payable for $1,000, b. a debit to expenditures for $20, c. a debit to expenditures for $1,020,
b)Debit to Expenditures for $16,000. c)Credit to Inventory of Supplies for $16,000. d)Credit to Expenditures for $16,000. - ✔✔a __ __ __ are defined as long-lived assets used by activities reported in governmental funds - ✔✔long- lived assets general capital assets are: capitalized where? depreciated where? debited where? - ✔✔capitalized = governmental activities at govt.-wide level depreciated = govt. wide level debited = expenditures in governmental fund _ assets are assets that are not depreciated - ✔✔inexhaustible (land, art) ___ costs of additions and betterments __ costs of replacements and maintenance - ✔✔CAPITALIZE additions
DO NOT capitalize replacements an __ __ is defined as a significant unexpected decline in service utility of a capital asset - ✔✔asset impairment (impairments are permanent) which impairment measurement is used for assets that are physically damaged? a. restoration cost approach b. service units approach c. deflated depreciation replacement cost approach - ✔✔a which impairment measurement is used for assets that are obsolete, environmentally impaired? a. restoration cost approach b. service units approach c. deflated depreciation replacement cost approach - ✔✔b which impairment measurement is used for assets that has estimated current cost or a replacement asset? a. restoration cost approach b. service units approach c. deflated depreciation replacement cost approach - ✔✔c if money received is RESTRICTED for the purchase or construction of high cost capital assets, recommended that a __ __ fund be used - ✔✔capital project 1.Under GASB standards, which of the following would be considered an example of an intangible asset?
