Chap004 - Chapter 04 - Accounting for the General and...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Chapter 04 - Accounting for the General and Special Revenue Funds C HAPTER 4 Accounting for the General and Special Revenue Funds 4-1. T HE SOLUTION TO THIS AND THE FIRST EXERCISE OF C HAPTERS 1 THROUGH 9 WILL DIFFER FROM STUDENT TO STUDENT , ASSUMING EACH HAS A DIFFERENT CAFR. 4-2. A. (1) E XCHANGE TRANSACTIONS ARE TRANSACTIONS IN WHICH EACH PARTY RECEIVES AND GIVES UP ESSENTIALLY EQUAL VALUES . (2) NONEXCHANGE TRANSACTIONS ARE TRANSACTIONS IN WHICH A GOVERNMENT GIVES ( OR RECEIVES ) VALUE WITHOUT DIRECTLY RECEIVING ( OR GIVING ) EQUAL VALUE IN EXCHANGE . B. T HE FOUR ELIGIBILITY REQUIREMENTS ARE (1) REQUIRED CHARACTERISTICS OF RECIPIENTS : REQUIRED CHARACTERISTICS OF RECIPIENTS MEANS THAT RECIPIENTS MUST BE THE TYPE SPECIFIED IN THE LEGISLATION OR GRANT AGREEMENTS . (2) TIME REQUIREMENTS : IF A DONOR SPECIFIES THAT A GRANT BE EXPENDED BY A RECIPIENT IN A FUTURE PERIOD , THEN THE RECIPIENT WOULD NOT RECOGNIZE THE RECEIVABLE OR THE REVENUE UNTIL THAT FUTURE PERIOD (3) REIMBURSEMENTS : T HIRD , REIMBURSEMENT GRANTS REQUIRE THAT QUALIFYING EXPENDITURES MUST BE INCURRED BY A RECIPIENT BEFORE A REVENUE CAN BE RECOGNIZED . (4) CONTINGENCIES : R ESOURCES PLEDGED THAT HAVE A CONTINGENCY ATTACHED ARE NOT TO BE RECOGNIZED UNTIL THE CONTINGENCY HAS BEEN MET . C. T HE FOUR CLASSES OF NONEXCHANGE REVENUES ARE (1) IMPOSED NONEXCHANGE TRANSACTIONS , (2) DERIVED TAX REVENUES , (3) GOVERNMENT- MANDATED NONEXCHANGE TRANSACTIONS , AND (4) VOLUNTARY NONEXCHANGE TRANSACTIONS . A N EXAMPLE OF IMPOSED NONEXCHANGE REVENUES WOULD BE PROPERTY TAXES . A SSETS FROM PROPERTY TAXES ARE RECOGNIZED WHEN AN ENFORCEABLE LEGAL CLAIM EXISTS , OR WHEN THE RESOURCES ARE RECEIVED , WHICHEVER OCCURS FIRST . R EVENUES WOULD BE RECOGNIZED IN THE PERIOD FOR WHICH THE TAXES ARE LEVIED . E XAMPLES OF DERIVED TAX REVENUES INCLUDE SALES , INCOME , AND MOTOR FUEL TAXES . F OR DERIVED TAX REVENUES , ASSETS ARE RECOGNIZED WHEN THE TAX IS IMPOSED OR THE RESOURCES ARE RECEIVED , WHICHEVER OCCURS FIRST . T HE TAX IS RECOGNIZED AS REVENUE AT THE SAME TIME AS THE ASSET , PROVIDING THAT THE UNDERLYING TRANSACTION HAS TAKEN PLACE . 4-1 Chapter 04 - Accounting for the General and Special Revenue Funds A N EXAMPLE OF GOVERNMENT- MANDATED NONEXCHANGE TRANSACTIONS WOULD BE STATE FUNDING FOR MAINSTREAMING HANDICAPPED CHILDREN IN CLASSROOMS , ACCOMPLANIED BY STATE LAW THAT MAINSTREAMING TAKE PLACE . A SSETS AND REVENUES SHOULD BE RECOGNIZED WHEN ELIGIBILITY REQUIREMENTS HAVE BEEN MET . A N EXAMPLE OF A VOLUNTARY EXCHANGE TRANSACTION WOULD BE A CONTRIBUTION TO A CITY LIBRARY ENDOWMENT FUND . V OLUNTARY NONEXCHANGE TRANSACTIONS SHOULD BE RECOGNIZED AS ASSETS AND REVENUES WHEN ELIGIBILITY REQUIREMENTS HAVE BEEN MET ....
View Full Document

This note was uploaded on 02/23/2011 for the course ACCT 305 taught by Professor Stephen during the Spring '11 term at Texas A&M.

Page1 / 39

Chap004 - Chapter 04 - Accounting for the General and...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online