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Gov't Accounting- Chapter 4 (Revenue Recog.)
Terms in this set (42)
What is the revenue recognition standard for modified accounting?
revenue cannot be recognized until it is measurable and available
For rev rec. what does measurable mean?
when we can quantify how much
For rev rec. what does available mean?
means collected soon enough to be used to pay the liabilities of the current year
What measurement is Government funds focused on?
the flow of the current financial resources and expendable financial resources
What do the current financial resources include?
e cash, receivables, marketable securities, prepaid items, and supplies inventories
What are NOT accounted for in government funds?
long term liabilities
What accounting basis does government funds take?
Modified Accrual Basis
GASB No. 33 tell us
Revenue Recognition standard
What is the general rule to quantify "available"
collected within 60 days after year end
What are the two broad types of Revenue Transactions
1. Non-exchange transactions
2. Exchange transactions
What is non-exchange transactions?
government gives/receives value without directly receiving/giving equal value in exchange.
When could some non-exchange transactions be delayed for revenue recognition?
Could be delayed until all program eligibility requirements are met
What are four categories of non-exchange transactions?
1. Derived tax revenues
2. Imposed nonexchange transactions
3. Government-mandated nonexchange transactions
4. Voluntary nonexchange transactions
What are exchange transactions?
Each party gives and receives about equal amount
What type of transaction is derived tax revenue?
What exactly is derived tax revenue?
derived from assessment of transactions carried on by tax payers
What is an example of derived tax revenue?
What is the revenue recognition rule for derived tax?
It should be recorded when the underlying exchange transaction occurred
What are examples of imposed non-exchange transactions?
1. Property Tax
When should imposed non-exchange transactions revenue be recorded?
When the government has legal enforceable claim to the resources and the relevant time requirements have been met.
Ad valorem taxes are those that are
paid according to the value of underlying property
What are examples of ad valorem taxes?
personal and real property taxes
When would revenue normally be recognized for property taxes?
the period for which they were levied
For imposed non-exchange transactions revenue can ONLY be recorded if:
cash is expected to be collected within 60 days of year end
What is a tax levy?
Amount billed to tax payers and the amount for which a receivable is established
measure that is actually set by legislative action, once the required size of the levy is determined.
Assessed valuation is determined by
an elected Tax Assessor
Required tax rate is calculated by
tax levy/ assessed valuation
What are special assessment Derived property taxes?
special kind of Derived Property Tax levied against certain properties deemed to receive a particular benefit that not all taxpayers receive. Examples may be street repair, street cleaning, or snow plowing for taxpayers who live outside the normal service area.
What do forfeits arise from?
Deposits or bonds made by contractors, accused felons and others to ensure appearance in court
When would you accrue fines in forfeitures/
Only if the amount is known prior to the receipt of cash which is not usually the case
. Government-mandated Transactions occur when
when a government at one level (e.g. the federal or a state government) provides resources to a government at another level (e.g. a local government or school
What is the government-mandated transaction requirement?
If the recipient accepts the resources they must
be used for a specific purpose
When should revenue be recognized for government-mandated transaction requirement?
when all eligibility requirements, including time requirements have been met
For Government- mandated nonexchange transactions when the grant is a reimbursement grant, when would this revenue be recognized?
They would be recognize when qualifying expenditures have been made by the recipient organization
Voluntary non-exchange transaction occur when
legislative or contractual agreements entered into willingly by two or more parties.
Voluntary non-exchange revenue transactions are recognized when
all eligibility requirements between two willing parties, including time requirements have been met.
What are pass-through grants?
Grants a government must transfer to, or spend on behalf of, a secondary recipient.
What are examples of pass-through grants?
(1) State government receives from the federal government grant for another special purpose reason
(2) Food stamps
On-behalf payments are:
one government makes payment for employment fringe benefits 'on behalf' of another.
Fees for licenses and permits should be considered:
exchange transactions even though those paying might receive less in value than it
The sale of capital assets should be accrued for under
Full accrual basis of accounting
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