acct 1b

  1. Differences between governments and for profit
    businesses. How are their operating
    environments different and how do budgets affect them differently?
    The different between governments and for profit business are governments can tax, public does not own net assets, governments rarely go out of business changing long term focus, government budgets carry authority of law, difference of revenue recognition, under FASAB or GASB rules Business can change budget anytime, shareholders own net assets called equity, rev
  2. Description and definition of a fund. What is it and how is it used? How many funds must a governmental organization have?
    Fund is the activities of an organization that is an accounting entity with segregation of resources for specific activities; it is used to separate spending for different types of activities. A government can have as many funds that it needs but only one general fund
  3. Governmental type funds
    for activities unique to government environment; has balance sheet, statement of revenue, expenditures & change in fund balance and optional required supplementary budgetary comparison; uses modified accrual accounting and financial measurement focus
  4. permanent fund
    report resources legally restricted so earnings may be expended for purposes to benefit government & citizens
  5. capital project fund
    costs associated with construction of project not the assets themselves
  6. debt serive fund
    used to accumulate resources to pay principal & interest on general obligation long term debt
  7. special revenue fund
    used to account for financial resources provided by revenue that are legally restricted to specific purposes (other than capital projects & debt service)
  8. general fund
    for anything that does not fit into the other funds
  9. proprietary type fund
    business type activiites use accrual & economic resources focus; has statement of net assets; statement of revenues, expenses & changes in fund net assets & statement of cash flow
  10. enterprise fund
    measures net income for government debts. providing goods or services to outside consumers for business purposes
  11. internal service fund
    measuring net income for government debts. That provide goods primarily to other debts. or agencies within government (cost reimbursement basis) appears with governmental funds on the government wide statements
  12. fiduciary type fund
    acts as agent or trustee of money belonging to other parties; has statement of net assets, and statement of changes in fund net assets; does not appear on government wide statements, uses accrual & economic resources focus
  13. agency fund
    account for resources held by government payable to outside party
  14. investment trust fund
    external portion of investment pools reoprted by sponsoring government
  15. pension fund
    used to account for assets for pension trusts to pay for government employees pensions
  16. private purpose trust fund
    all other trust arrangements where principal & income benefit individuals, private orgs or other government
  17. understand the 2 basis of accounting and which bases are used by each bype of fund
    • accrual - used by government wide statements, fiduciary type funds & proprietary type funds; report long term assets & liabilities
    • modified accrual basis - used by governmental type funds; does not record long term assets or liabilities
  18. know the 2 types of measurment focus and which one each type of fund uses
    • economic resources - used by all but governmental type funds
    • current financial resources measurement - used by governmental type funds; only records current assets & current liabilities
  19. identify the hierarchy of accounting standards for governmental and not for profit accounting as well as which organizations oversee those standards
    • FASAB oversees the federal government
    • GASB oversees for state, local governments & public not for profits
    • FASB oversee private not for profits & investor owned businesses
  20. understand the structure & purpose of the government wide financial statements
    • statement of net assets - assets & liabilities (economic resource measurment similar to business balance sheets) assets in order of liquidity, current & noncurrent categories are optional net assets broken down into invested, restricted & unrestircted
    • statment of activities - measures revenues & expenses net cost of activities is used after deducting revenue to each function
  21. know the structure & purpose of the CAFR.
    CAFR is comprehencisve annual financial report; government financial report includes management discussion & analysis, basic financial statements (government wide & fund levels) & supplementary invormation
  22. Understand the criteria for a "major" fund
    • >5% of total assets, liabiliites, revneues or expenditures of gov & enterprise
    • >10% of same of gov category
  23. understand the budget process in governmental accounting, include why it is important and what entries are used to record it
    • governing body creates budget
    • DR estimated revenue CR approriations & DR or CR budgetary fund balance
    • purchase order placed
    • DR encumbrance CR budgetary fund balance reserved for encumbrances
    • when item received
    • DR budgetary fund blaance reserved for encumbrances CR encumbrance
    • (reversing the purchase order)
    • then
    • DR expenditure
    • CR accounts payable
    • (for amount of expenditure invoice)
  24. understand the use of encumbrances in the budgetary process, including their purpose
    be able to apply knowlege to calculate running balance in the appropriates of governmental dept
    • Beginning balance available for encumbrance
    • - encumbrance ordered
    • - received order
    • + reverse encumbrance for amount of order received
    • - salaries to get ending balance
  25. understand and be able to identify the 4 classes of non exchange transactions
    • imposed non exchange revenue - taxes & other assetsments
    • derived tax revenues - taxes assessed on exchange tranactions like sales tax
    • governmental mandated non exchange transaction - grants from higher gov (required)
    • voluntary non exchange transactions - donations & grants for support not required
Card Set
acct 1b
acct 1b