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Flashcards in Governmental Accounting III Deck (20)
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1
Q

True or False.

Government wide financial statements are prepared under the modified accrual basis with an current financial resources measurement focus.

A

FALSE.

Government wide financial statements are prepared under the “accrual” basis with an “economic resources” measurement focus

2
Q

HOW would an unrestricted grant received from another government to support enterprise fund operations be reported?

A

In Non-operating revenues

i.e. it would be reported in the non-operating revenues portion of the Statement of Revenues, Expenses and Changes in Fund Net Assets for the enterprise fund

3
Q

If there is a debit balance in the “Budgetary Fund Balance” account after the budget is recorded:

A

THIS means that the Appropriations are greater than estimated revenues (by whatever the amount mentioned is)

4
Q

The measurement focus of governmental fund accounting is on:

A

Current financial resources

i.e. reporting the sources of funds to the governmental unit and how those funds are used

5
Q

The major difference between an exchange transaction and a non-exchange transaction for governmental units is:

A

The relationship between the amount of value given and received

6
Q

Fund balances on the Governmental Funds balance sheet can be:

A

Non-spendable, restricted, committed, assigned, and unassigned;

NOTE: They can also be either a Restricted or Unrestricted component of a governmental entity’s Statement of Net Position

7
Q

In governmental accounting, a fund is:

A

THE basic accounting unit and is used to assist in ensuring fiscal compliance

8
Q

A government-wide statement of net position must:

A

BE divided into governmental and business-type activities

i.e. THERE must be a distinction between governmental and business-type activities

9
Q

According to GASB, WHAT are Program Revenues?

A

“Resources that are generated in the process of providing a particular service or operating a particular part of a government.”

10
Q

The three sections of the CAFR are:

A

(1) The Introductory section, which includes the transmittal letter
(2) The financial section which includes the auditor’s report, management discussion and analysis (MD&A), government-wide and fund financial statements, notes to financial statements,
(3) The statistical section which provides additional information

11
Q

HOW should a government entity report a capital lease for equipment obtained through the lease on their government-wide statement of net assets?

A

AS a “General Capital Asset”

WHY? - Because Government-wide statements are prepared on the accrual basis, the capital lease will be reported as though it were reported under GAAP

12
Q

True or False.

Under GASB, The notes to the Government Financial Statements must contain disclosures related to required supplementary information.

A

FALSE.

According to the Governmental Accounting Standards Board (GASB), “notes to the financial statements consist of notes that provide information that is considered essential to a user’s understanding of the basic financial statements.

Therefore they do NOT contain disclosures related to required supplementary information.

13
Q

Under the “modified accrual” basis of accounting, amounts spent on capital assets are recognized as:

A

Expenditures at their Full Cost

14
Q

WHAT items would be reported below the “Excess (deficiency) of revenues over expenditures” line on the Statement of revenues, expenditures, and changes in fund Balances?

A

(1) Proceeds from the sale of capital assets
(2) Payment to a debt-service fund
(3) Special items

15
Q

HOW is Tax Revenue reported when Government-wide financial statements are prepared?

A

Taxes Levied (Net) of any expected uncollectible amounts

16
Q

True or False.

The statistical section of the Comprehensive Annual Financial Report (CAFR) of a governmental unit is required.

A

FALSE.

The statistical section of the Comprehensive Annual Financial Report (CAFR) of a governmental unit is NOT required NOR is it an “integral part of the basic financial statements”

17
Q

WHAT is a requirement of a local government’s management’s discussion and analysis (MD&A) part of its financial statements?

A

THAT the MD&A section compare current-year results to the prior year with emphasis on the current year

18
Q

The statement of activities of the government-wide financial statements is designed primarily to provide:

A

Operational accountability

Reference - GASB 34

19
Q

WHAT would be considered the three “primary” user groups of state and local government financial reports?

A

The citizenry of the reporting governmental entity

Legislative and oversight bodies

Investors and creditors

20
Q

When establishing the fund system for a governmental unit:

A

THE absolute minimum number of funds will be one, the “general fund”

Note: Legal requirements and sound financial administration will dictate whether additional funds are required