Chapter002

Chapter002 - CHAPTER 2: PRINCIPLES OF ACCOUNTING AND...

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CHAPTER 2: PRINCIPLES OF ACCOUNTING AND FINANCIAL REPORTING FOR STATE AND LOCAL GOVERNMENTS OUTLINE Number Topic Type/Task Status (re: 13/e) Questions: 2-1 Governmental activities Describe Same 2-2 Business-type activities Describe Same 2-3 Fiduciary activities Describe Same 2-4 Reporting entity Define and explain New 2-5 Component unit reporting Explain 2-10 2-6 Component unit reporting Explain New 2-7 Legal compliance vs. GAAP Explain New 2-8 General vs. fund long-term liabilities and capital assets Distinguish 2-6 2-9 Measurement focus and basis of accounting Explain 2-7 Revised 2-10 GASBS 34 integrated reporting model Explain New Cases: 2-1 Defining the reporting entity Internet; locating information in the CAFR New 2-2 Identification of funds Internet; using the CAFR to identity fund utilization New 2-3 Accounting and reporting principles Analysis; explanation New Exercises/Problems: 2-1 Examine the CAFR Examine Revised 2-2 Various Multiple Choice Revised 2-3 Various True/False Revised 2-4 Identification of government-wide and fund financial reporting characteristics Matching New 2-5 Understanding purpose of funds Matching Same 2-6 Determination of major funds Calculation; written Report 2-5 revised 2-7 General long-term liability and general capital asset transactions Journalizing and explaining New 2-1
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CHAPTER 2: PRINCIPLES OF ACCOUNTING AND FINANCIAL REPORTING FOR STATE AND LOCAL GOVERNMENTS Answers to Questions 2-1. Certain core services are provided by most general purpose governments—those related to the protection of life and property (e.g., police and fire protection), public works (e.g., streets and highways, bridges, and public buildings), parks and recreation facilities and programs, and cultural and social services, among others. Governments must also incur costs for general administrative support (such as, data processing, finance, and personnel) of its service departments. Core governmental services, together with general administrative support, comprise the major part of what GASB refers to as governmental activities . The measurement focus and basis of accounting for these activities is on the flow of current financial resources on the modified accrual basis in the governmental funds and on the flow of economic resources on the accrual basis in the governmental activities column of the government-wide financial statements. 2.2. The business-type activities of a government include public utilities (such as electric, water, gas, and sewer utilities), transportation systems, toll roads and bridges, hospitals, parking garages and lots, liquor stores, golf courses, airports, and swimming pools, among other things. Many of these activities are intended to be self-supporting by charging users for the services they receive. Focusing financial reporting on economic resources recognized on the accrual basis of accounting allows the government to determine whether charges for services are sufficient to cover the full cost of the activity.
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Chapter002 - CHAPTER 2: PRINCIPLES OF ACCOUNTING AND...

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