gov accounting final Flashcards

Terms Definitions
Intro Section
Financial Section(Auditor Report, Man Discusion and Anal, Fund Sts., GW Sts., Notes, RSI, Combine Sts., Individual Fund Sts., Schedule)
Statistical Section( provides trend data)
Current Ratio
current assets/current liabilities
FA =
quantity of services provided(number of recipients)
Debt Burden
outstanding long term debt/population(or full value of taxable real property or personal income)
Budgetary Cushion
total unreserved fund balance/total revenues+certain transfers in
GASB #54: Classifications
Non-spendable, restricted, committed, assigned, unassigned
Types of Proprietary Funds
Enterprise, Internal Service
Funded Ratio
fund assets available for benefits/benefits paid last year
T/F? Agency fund financial statements typically report revenue, and that revenue is reported on a full accrual basis.
T/F? Depr expenditure reported in gov'tal funds simply becomes depreciation expense in gov'tal activities.
T/F? In the government-wide financial statements, program revenues raised for a function are netted against the expenses incurred for that function to derive the net expenses or revenues for that function. This net amount is presented in the Statement of
Activities subject to UBIT
Sponsorships, Advertising, Affinity credit card arrangements, travel services, fund-raising events
Explanatory Information (SEA)
Input to Outcomes (Unemployment Rate)
Types of measurements
Liquidity indicators, Asset turnover or Efficiency indicators, Budget solvency and Operating results indicators, Debt burden and Other long term financial flexibility indicators
Sec. 501(c)(3)
most common classification under IRC Section 501, which is an organization operated for philanthropic, educational, or similar purposes
Special Revenue Fund
resources legally designated for specific purposes and separately reported
Permanent Fund
resources legally restricted so only earnings (and not principal) may be used to support governmental programs
Types of Fiduciary
Pension Trust, Investment Trust, Private-Purpose Trust, Agency
Economic measurement focus
affect all resources available, financial and capital
Major Funds
A gov or enterprise fund(including blended CU) whose total assets, liabilities, revs, or exp are at least 10% of the corresponding element for all funds of that category or type, and also at least 5%of the corresponding element total for all gov and enterprise funds combined
Other Not-for-Profits include libraries and humane societies but not
not-for-profit hospitals, credit unions, employee benefit plans and colleges.
T/F? Net assets do reflect spendable equity.
Under GASB 35, colleges/universities are required to follow GASB 34 reporting standards. These standards are applicable to?
Special Purpose Governments
Service Efforts and Accomplishment reporting
non-financial measurements, not required by GASB, Inputs, Outputs, Outcomes
Form 990 Info
Financial Info(Bal Sh, St of Activities, details of rev sources and functional exps, compensation to key employees and others, lobbying expenses)
Non-financial Info(largest contributions with donors' names, statement of program services accomplishments)
Agency Fund
resources held in a custodial capacity that must be disbursed according to law or contractual agreement
Board Treasurers
Have custody of corporate funds and securities, keep full and accurate records of all receipts and disbursements, deposit money and valuables in designated depositories, authorize disbursements
Capital Projects Fund
resources dedicated to acquiring or constructing major capital facilities
Current financial resources
those that are measurable and available
Private Foundation
receives its support from a small number of individuals or corporations and investment income rather than from the public at large
Investment Trust Fund
resources of an external investment pool managed by a sponsoring government
Private-Purpose Trust Fund
resources of all other trust arrangements maintained for benefit of individuals, other governments, and private organizations
NPO vs. for-profit business
1. Receive contributions of significant amounts of resource providers who do not expect to receive proportionate monetary benefits in return.
2. Operate for purposes other than to provide goods or services at a profit.
3. Lack defined ownership interests that can be sold, transferred, or redeemed.
Unrestricted Contributions
may be received with or without donor-imposed restrictions. Should be reported on the statement of activities as unrestricted revenues or gains, which increase unrestricted net assets
Efficiency Indicators (SEA)
Inputs to Outputs (Administrative cost per case)
T/F? There are no "Bad Debt Expenses" for government wide financial reporting.
General Revenues are all revenues that are not Program Revenues. Taxes are
general revenues.
Earned but deferred revenue must be eliminated when preparing a ___ conversion worksheet.
balance sheet
CL + LTL + NA =
The difference between the standard rate and the expected payment is
a contractual adjustment.
Government vs. NPO
1. Their officers are either popularly elected or a controlling majority of their governing boards are appointed or approved by entities that care clearly governmental.
2. They may have the power to tax.
3. The may have the power to issue tax exempt debt
4. They can be dissolved unilaterally by a government and their net assets assumed by it without compensation
Discrete Component Unit
Not substantively the same board and does not provide service entirely to PG
Notes to Financial Statements
contain info essential to user's understanding but does not meet criteria for recognition in fin st
Tax Exemption
NPOs are often exempted from the taxes levied by state and local governments, such as sales, real or personal property, transfer, employment, or excise taxes. To be relieved from the tax, the NPO may have to file for specific tax exemption and document that the property is in use for charitable purposes
Unrelated Business Income Tax (UBIT)
Income from activities not substantially related to its charitable or tax-exempt mission. If exceeds $1000 taxed at corporate rates
Lobbying and Political Activity
NPOs must carefully distinguish among advocacy, political activity, and lobbying. Advocacy: is speaking up for the mission of the organization and the needs of the people an NPO serves, allowed without limits. The ultimate penalty is revocation of exemption from taxes but more often fines are imposed for engaging in prohibited behavior
Broad Public Support test
The External Support Test
The Internal Support Test
Enterprise Funds
may be used to account for any activity whose products or services are sold for a fee to external users, such as the general public
Blended Component Unit
two boards substantively the same or CU provides service entirely or almost entirely to PG
Pension Trust Fund
resources held in trust for employee retirement plans and other employee benefit plans. Ex. Post-employment health benefit plan
The typical balance for a OFS account in the debt service fund is
a credit.
Supporting services are typically
not related to the organization's mission.
There is no "___" in gov't-wide financial reporting.
bad debt expense
Tax Agency Fund.
An agency fund created to collect taxes for several funds or for other gov'tal units.
The typical balance for the "Due from Special Revenue Fund" account in the GF is
a debit.
Purpose of Financial Statement Analysis
management vs. measurement, what gets measured gets done
Activities not subject to UBIT
Investment Income, Royalties and fees for use of intangible property, gains on sale of property, work done by volunteers, legally conducted games of chance, rents from real property, activities that primarily benefit members
NPO required Financial Statements
1. Statement of Financial Position, 2. Statement of Activities, 3. Statement of Cashflows 4. Statement of Functional Expenses (Only VHWO)
Give examples of a VHWO.
United Way, American Heart Assoc., etc.
Gains and losses from the sale of GCA (are/ are not) reported in the gov'tal funds.
are not
What is “fiscally dependent”?
The entity is fiscally dependent on the Primary Government if it requires the primary government to establish its budget, levy taxes, or issue bonded debt.
Program services are expenses related to
the mission of the organization.
Unconditional Promises to Give
a promise to give sometimes called a pledge or charitable subscription is a written or oral agreement to contribute cash or other assets to another entity. FASB concluded that—those that depend only on the passage of time or demand by the receiver of the promise—meet the definition of assets because promise makers generally feel bound to honor them
Expenses Incurred by NPO
must be reported on the statement of activities or in the notes to the financial statements "by their functional classification such as major classes of program services and supporting activities." Functional classifications are required because they enable the reader to determine the cost of various programs offered by the organization
GASB #54: Restricted
amounts that can be spent only for the specific purposes stipulated by constitution, external source providers, or through enabling legislation
Basic Financial Statements
Fund Fin Sts., GW Fin Sts., Notes to Fin Sts.
Unconditional promises to give that are restricted for the purpose of acquiring fixed assets should be recognised when?
When the unconditional promise is made.
In a Gov'tal Funds Operating Stmt Conversion Worksheet, the 1st column is for ___.
General Capital Assets Changes.
This treats the component unit as if it were combined with the Primary Government into one unit. There is no separate reporting for the component unit.
Blending: This is rare.
If NPO does not capitalize its collections
it must report the following information on the face of its statement of activities, separately from revenues, expenses, gains, and losses:
a)Proceeds from sale of collection items as an increase in the appropriate class of net assets.
b)Proceeds from insurance recoveries of lost or destroyed collection items as an increase in the appropriate class of net assets
T/F? Mosser Township receives a federal grant that is restricted for hiring police officers. In Mosser Township’s government-wide financial statements, revenue from this grant should be reported as Program Revenue and classified as “Operating Grants a
True. This would be a voluntary nonexchange agreement with another government and the revenue is restricted for use in a particular non-capital program.
The 3rd column in a Gov'tal Funds Operating Stmt Conversion WS serves two purposes:1) Adjusting from modified to full accural by adding/subtracting deferred revenues and 2)
Eliminating transfers to/from gov'tal funds.
Commanalities between VHWOs, ONFPs and NFP Private Colleges:
Accrual based; No owner's equity (NA represented as the difference between assets and liabilities on the Stmnt of Fin Position).
NPO: Contributions other than services and collections
a)Reported as revenues or gains in the period received,
b)Reported as assets, decreases of liabilities, or expenses, depending on the form of the benefits take,
c)Measured at the fair value of the contribution received,
d)Reported as either restricted support or unrestricted support.
T/F? In the government-wide Statement of Activities, the revenue from Internal Service Funds is always included in the “Business-type Activities” column.
False. It depends on how much is provided in enterprise activities vs. government activities.
The term "Governmental Funds" for the city of Phoenix includes
a capital projects fund, a permanent fund, and a debt service fund.
T/F? A trust fund “Statement of Net Assets” shows Assets equal to Liabilities.
False. Agency funds have assets equal to liabilities, but trust funds do not.
How would the capital assets of a Private-Purpose Trust Fund most likely be reported?
As a capital asset of the fund.
T/F? VHWO is the only category of NFP that is required to provide a Stmnt of Functional Expenses.
True. It is optional for ONFPs.
A contributor pays directly for the rental of a facility so that a NPO can throw a fund raiser. How does the NPO record this?
The costs paid on its behalf would be recorded as both as a revenue and as an expense.
T/F? A state government would account for its pension plan using an Agency Fund.
False. A trust fund would be used and not an agency fund.
Major fund test: total assets, liab, rev, or expend/expense > _% of the gov'tal or enterprise category and > _% of the total for all gov'tal and enterprise funds combined/
10; 5. But a fund can be treated as "major" even if it is not required to be treated that way.
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