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Governmental Accounting Flashcards

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Read the first 7 Governmental Accounting flashcards as text

  1. GASB Statement No. 54 classifies fund balance in governmental funds into how many categories?

    Answer: Five

    GASB No. 54 established five fund balance classifications: nonspendable, restricted, committed, assigned, and unassigned.

  2. The 'nonspendable' fund balance classification includes amounts that:

    Answer: Cannot be spent because they are in non-liquid form or must remain intact

    Nonspendable fund balance includes amounts not in spendable form (such as inventory, prepaid items, or long-term receivables) or legally required to remain intact.

  3. Under modified accrual accounting, property tax revenues are recognized:

    Answer: In the period for which levied if collected within the availability period

    Property taxes are recognized as revenue in the period for which levied, provided they are collected within the availability period, typically 60 days after year-end.

  4. Which of the following appears in a Statement of Cash Flows for a proprietary fund but does NOT apply to governmental funds?

    Answer: Cash flows from capital and related financing activities

    The proprietary fund Statement of Cash Flows includes 'capital and related financing activities' as a category; governmental funds do not prepare a Statement of Cash Flows.

  5. A government issues general obligation bonds to finance capital construction. The proceeds should be recorded in:

    Answer: A capital projects fund

    Proceeds from bonds issued to finance capital improvements are recorded in a capital projects fund, which accounts for resources used for acquisition or construction of major capital facilities.

  6. Under GASB, the Management's Discussion and Analysis (MD&A) serves what primary purpose?

    Answer: To provide management's objective analytical overview of the government's financial activities

    The MD&A is required supplementary information providing management's analytical overview of financial activities, comparing current to prior year and explaining significant changes.

  7. Under GASB Statement No. 68, where are net pension liabilities reported?

    Answer: As a liability on the government-wide statement of net position

    GASB No. 68 requires governments to recognize their net pension liability on the face of the government-wide statement of net position, increasing transparency of pension obligations.