Governmental Accounting--Funds, government operating statement accounts, budgetary accounting, principals, capital assets, capital projects, CAFR, and minimum basic financial statements

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Questions taken from chapters 1 thru 6 of "Accounting for Governmental and Nonprofit Entities" 14e, Wilson, Kattelus, and Reck

Capital Assets

include Land, Improvements to Land, easements, buildings, building improvements, vehicles, machinery, equipment, works of art and historical treasures, infrastructure and all other tangible and intangible assets that are (1) are used in operations and (2) have useful lives extending beyond a single reporting period. They are not physically consumed by their use, though their economic usefulness typically declines over their lifetimes.

General Capital Assets

the GASB defines these as all capital assets other than those accounted for in proprietary funds or trust funds (in some Trust Funds and Internal Service Funds and Enterprise Funds, these are accounted for in the same manner as in profit-seeking enterprises.

Modified Approach Infrastructure Assets

are part of a network, or subsystem of a network that are not required to be depreciated if two requirements are met: 1.) the government manages the eligible infrastructure assets by using an asset management system that has certain characteristics 2.) the government documents that the eligible infrastructure assets are being preserved approximately at or above a condition level established and disclosed by the government.

Permanent Funds

The governmental-type funds used to account for public purpose trusts for which earnings are expendable for a specified purpose, but the principal amount is not expendable.

Infrastructure Assets

are long-lived capital assets that normally are stationary in nature and normally can be preserved for a significantly greater number of years than most capital assets. Examples of these include roads, bridges, tunnels, drainage systems, water and sewer systems, dams, and lightening systems.

Cost of Land

includes the amount paid for the land, cost incidental to acquisition of the land, and expenditures incurred in preparing the land for use (e.g. for storm water drainage and for water and sewer connection charges)

Machinery and Equipment

examples are trucks, automobiles, pumps, desks, typewriters, computers, and bookcases. If this is movable, it must be accounted for with particular care.

Construction in Progress

includes the cost of construction work undertaken at a balance sheet date. These costs are appropriately reclassified upon project completion.

Fund Capital Assets

capital assets of proprietary funds should be reported in both the government-wide and fund financial statements. Fiduciary funds should be reported only in the statement of fiduciary net assets.

Agency Funds

One of the 11 types of funds used to report resources held by the reporting government in a purely custodial capacity (assets equal liabilities). These typically involve only one receipt, temporary investment, and remittance of fiduciary resources to individuals, private organizations, or other governments.Measurement Focus (MF) Is on current financial resources--what is expendable

Intergovernmental Agency Funds

are used to alleviate some of the awkwardness caused by using numerous fund accounting entities in governments. These internal Agency Funds are also used to establish clear-cut audit trails, where a single transaction effects several funds. Thus, although a special imprest bank account will often suffice, some governments establish an Agency Fund, in which (1) receipts must be allocated among several funds or (2) a single expenditure is financed through several funds.

Imprest Checking Account

is one to which deposits are made periodically in an account equal to the sum of the checks written thereon. When all checks written have cleared, the bank account balance will equal a predetermined amount, often zero. These are often used to enhance cash control and/or to facilitate bank to book reconciliations.

Cash

Statement of Net Assets for a Tax Agency Fund (TAF) does not include this balance since money belongs to the administering government.

Trust Funds

The GASB classifies these, for financial reporting purposes, as Pension (or Other Postemployment Benefit) Trust Funds, Investment Trust Funds, and Private-Purpose Trust Funds. The flow of economic resources measurement focus and accrual basis of accounting are required for each type of this. Reporting is oriented towards providing accountability for the sources, uses, and balances or resources held in trust for others.

Investment Trust Funds

should be used to report the external portion of investment pools reported by the sponsoring government, as required by GASB Statement No. 31.

Internal Service Funds

are established to finance, administer, and account for departments or agencies of a government whose exclusive or nearly exclusive purpose is to provide goods or services (e.g. printing services) to the government's other departments on a cost-reimbursement basis.

Enterprise Funds

are established to finance and account for the acquisition, operation, and maintenance of governmental facilities and services that are entirely or predominately self-supporting by user charges; or for when the governing body of the governmental unit has decided periodic determination of revenues earned, expenses incurred, and/or net income is appropriate. Governmentally owned utilities and hospitals are ordinarily accounted for by these types of funds.

Proprietary Fund Statement of Net Assets

much like the balance sheet of a business entity.

Restricted Net Assets

is the net asset component that indicates the amount of restricted net assets of a proprietary fund in excess of noncapital borrowings and other liabilities directly associated with (payable from) those restricted assets.

Unrestricted Net Assets

is the remainder of the funds net assets. It represents the portion of net assets that does not meet the definition of "restricted" or "invested in capital assets, net of related debt."

Capital Grants

Solely for capital purposes; airport improvements, buses, subway systems, wastewater treatment plants.

Operating Grants

all other intergovernmental grants besides Capital Grants.

Operating Revenues

Billings to other departments are recorded as:

Primary Government

For financial reporting purposes, a state government or general purpose local government that is legally separate and is fiscally independent of other state and local governments is a:

Fund

A fiscal and accounting entity with a self-balancing set of accounts recording cash and other financial resources, together with all related liabilities and residual equities or balances and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives, is known as a:

Governmental Funds

The modified accrual basis of accounting is used in accounting for which fund category?

Blended Presentation

Under this method the component unit data are usually combined with the appropriate fund types of the primary government and reported in the same columns as the data for the primary government.

Business Type Activities

Commercial type activities of a government, such as public utilities (e.g., electric, water, gas, and sewer utilities), transportation systems, toll roads, toll bridges , hospitals, parking garages and lots, liquor stores, golf courses, and swimming pools.

Capital Projects Fund

Fund created to account for all resources to be used for the construction or acquisition of designated capital assets by a government except those financed by proprietary or fiduciary funds.

Debt Service Fund

Fund established to finance and account for the payment of interest and principal on all tax-supported debt, serial and term, including that payable from special assessments.

Discreet Presentation

The method of reporting financial data of component units in a column(s) separate from the financial data of the primary government.

Economic Resources Measurement Focus

Attention on measuring the total economic resources that flow in and out of the government rather than on measuring current financial resources only.

Escheat Property

Private property that reverts to government ownership upon the death of the owner if there are no legal claimants or heirs.

Expenditures

Recorded when liabilities are incurred pursuant to authority given in an appropriation.

Expenses

Charges incurred, whether paid or unpaid, for operation, maintenance, interest, and other charges presumed to benefit the current fiscal period.

Fund Balance

The portion of fund equity available for appropriation

Fund Equity

The excess of fund assets and resources over fund liabilities.

Private Purpose Trust Funds

Contributions received under a trust agreement in which the investment income of an endowment is intended to benefit an external individual, organization, or government.

General Purpose Governments

Governments that provide many categories of services to their residents (such as police and fire protection; sanitation; construction and maintenance of streets, roads, and bridges; health and welfare, departments etc) i.e states counties, municipalities, cities, and townships.

Special Purpose Governments

Governments that provide only a single function or limited number of functions (such as drainage and flood control, education, irrigation, soil and water conservation, fire protection, and water conservation). Independent school districts, public colleges and universities, and special districts are this type of government.

FAF

Oversee and point members of the GASB and FASB.

Accountability

The cornerstone of financial accounting for state and local governments, and government not-for-profit organizations..

Interperiod equity

Term referred to by the GASB, and is an objective in financial reporting for state and local governments and non-profit organizations that means financial reporting should help users assess whether current year revenues are sufficient to pay for services provided that year and whether future taxpayers will be required to assume burdens for services previously provided.

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