ACCT 405 Chap 3 (Test 1) | Latest study |
Questions and verified Answers
activity - ANSW-a specific and distinguishable line of work performed by on or more organizational
components of a govt. for the purpose of accomplishing a function for which the govt. is responsible
ad valorem tax - ANSW-a tax levied on the assessed value of real and personal property
allotment - ANSW-A part of an appropriation (or, in federal usage, parts of an apportionment) that may
be encumbered (obligated) or expended during an allotment period.
appropriations - ANSW-authorization by the legislature to a government agency or body to spend up to a
particular amount of money
Budgetary Accounts - ANSW-Those accounts that reflect budgetary operations and condition, such as
estimated revenues, appropriations, and encumbrances, as distinguished from proprietary accounts.
budgetary fund balance - ANSW-a temporary account established for the sole purpose of recognizing the
difference between the anticipated inflows and outflows related to the budgetary period.
character - ANSW-a basis for distinguishing expenditures according to the periods they are presumed to
benefit.
direct expenses - ANSW-Those expenses that can be charged directly as a part of the cost of a product or
service or of a department or operating unit as distinguished from overhead and other indirect costs that
must be prorated among several products or services, departments, or operating units.
encumbrances - ANSW-Accounts used to record the estimated amount of purchase orders, contracts, or
salary commitments chargeable to an appropriation. The account is credited when goods or services are
received and the actual expenditure of the appropriation is known.
Escheats - ANSW-Taking of property in default of legally qualified claimants
estimating other financing sources - ANSW-amounts of financial resources estimated to be received or
accrued during a period by a governmental or similar type fund from inter fund transfers or from the
proceeds of concurrent debt issuance.
estimating other financing uses - ANSW-amounts of financial resources estimated to be disbursed or
accrued during a period by a governmental or similar type fund for transfer to other funds.
Estimated Revenues - ANSW-For revenue accounts kept on an accrual basis, this term designates the
amount of revenue estimated to accrue during a given period regardless of whether or not it is all to be
collected during the period. For revenue accounts kept on a cash basis, the term designates the amount
of revenue estimated to be collected during a given period. Under the modified accrual basis, estimated
revenues are those that are measurable and available.
Extraordinary Items - ANSW-unusual and infrequent material gains and losses
Functions - ANSW-a group of related activities aimed at accomplishing a major service or regulatory
responsibility for which a govt is responsible. For example, public health is a function
general revenues - ANSW-Revenues that are not directly linked to any specific function or do not
produce a net revenue.
indirect expenses - ANSW-those expenses that are not directly linked to an identifiable function or
program
Interfund Transfers - ANSW-Amounts transferred from one fund to another.
, object - ANSW-a basis for distinguishing expenditures by the article purchased or the service obtained.
organization unit - ANSW-Units or departments within an entity, such as police department or city
attorney department.
Other Financing Sources - ANSW-An operating statement classification in which financial inflows other
than revenues are reported, for example, proceeds of long-term debt and transfers in.
Other Financing Uses - ANSW-An operating statement classification in which financial outflows other
than expenditures are reported, for example, transfers out.
penalty - ANSW-A legally mandated addition to a tax on the day it became delinquent (generally, the day
after the day the tax is due).
Program Revenues - ANSW-Revenues linked to a specific function or program and reported separately
from general revenues on the government-wide statement of activities.
property assessment - ANSW-A process by which each parcel of taxable real and personal property
owned by each taxpayer is assigned a valuation.
Special Items - ANSW-Operating statement items that are either unusual or infrequent and are within
management control.
Taxable property - ANSW-All property except that which is exempt from taxation; examples of exempt
property are property owned by governments and property used by some religious and charitable
organizations.
How does the GASB define special items? - ANSW-are presented apart from revenues and expenditures.
Explain the essential differences between revenues and other financing sources and between
expenditures and other financing uses. How is each of these items reported on the governmental funds
statement of revenues, expenditures, and changes in fund balances? - ANSW-• Revenue is defined as an
increase in fund financial resources other than from financing sources such as interfund transfers and
debt issue proceeds.
• Transfers into a fund and the proceeds of debt issues and sales of government assets are examples of
inflows classified as Other Financing Sources of the fund.
• Expenditures represent the cost to purchase a good or service, whereas Other Financing Uses
represent transfers of financial resources from one fund to another fund.
• Other financing sources have the same effect on fund balance as revenues, while other financing uses
have the same effect on fund balance as expenditures, but they are each reported differently within the
fund financial statements. On the government funds statement of revenues, expenditures, and changes
in fund balances revenues are reported by fund and sources, followed by expenditures reported at the
legal level of budgetary control. After a subtotal termed, Excess (deficiency) or revenues over
expenditures, a separate section of the statement reports other financing sources and uses before
arriving at a net change in fund balance.
For which funds are budgetary comparison schedules or statements required? Should the actual
revenues and expenditures on the budgetary comparison schedules be reported on the GAAP basis?
Why or why not? - ANSW-• Budgetary comparison schedules (or statements) must be provided for the
General Fund and each major special revenue fund for which a budget is adopted. In order for budget to
actual comparisons to be meaningful, actual revenues and expenditures must be reported in the same
manner as the budgeted amounts. Actual revenues and expenditures reported in the statement of
revenues, expenditures, and changes in fund balances should be on the GAAP basis.
Questions and verified Answers
activity - ANSW-a specific and distinguishable line of work performed by on or more organizational
components of a govt. for the purpose of accomplishing a function for which the govt. is responsible
ad valorem tax - ANSW-a tax levied on the assessed value of real and personal property
allotment - ANSW-A part of an appropriation (or, in federal usage, parts of an apportionment) that may
be encumbered (obligated) or expended during an allotment period.
appropriations - ANSW-authorization by the legislature to a government agency or body to spend up to a
particular amount of money
Budgetary Accounts - ANSW-Those accounts that reflect budgetary operations and condition, such as
estimated revenues, appropriations, and encumbrances, as distinguished from proprietary accounts.
budgetary fund balance - ANSW-a temporary account established for the sole purpose of recognizing the
difference between the anticipated inflows and outflows related to the budgetary period.
character - ANSW-a basis for distinguishing expenditures according to the periods they are presumed to
benefit.
direct expenses - ANSW-Those expenses that can be charged directly as a part of the cost of a product or
service or of a department or operating unit as distinguished from overhead and other indirect costs that
must be prorated among several products or services, departments, or operating units.
encumbrances - ANSW-Accounts used to record the estimated amount of purchase orders, contracts, or
salary commitments chargeable to an appropriation. The account is credited when goods or services are
received and the actual expenditure of the appropriation is known.
Escheats - ANSW-Taking of property in default of legally qualified claimants
estimating other financing sources - ANSW-amounts of financial resources estimated to be received or
accrued during a period by a governmental or similar type fund from inter fund transfers or from the
proceeds of concurrent debt issuance.
estimating other financing uses - ANSW-amounts of financial resources estimated to be disbursed or
accrued during a period by a governmental or similar type fund for transfer to other funds.
Estimated Revenues - ANSW-For revenue accounts kept on an accrual basis, this term designates the
amount of revenue estimated to accrue during a given period regardless of whether or not it is all to be
collected during the period. For revenue accounts kept on a cash basis, the term designates the amount
of revenue estimated to be collected during a given period. Under the modified accrual basis, estimated
revenues are those that are measurable and available.
Extraordinary Items - ANSW-unusual and infrequent material gains and losses
Functions - ANSW-a group of related activities aimed at accomplishing a major service or regulatory
responsibility for which a govt is responsible. For example, public health is a function
general revenues - ANSW-Revenues that are not directly linked to any specific function or do not
produce a net revenue.
indirect expenses - ANSW-those expenses that are not directly linked to an identifiable function or
program
Interfund Transfers - ANSW-Amounts transferred from one fund to another.
, object - ANSW-a basis for distinguishing expenditures by the article purchased or the service obtained.
organization unit - ANSW-Units or departments within an entity, such as police department or city
attorney department.
Other Financing Sources - ANSW-An operating statement classification in which financial inflows other
than revenues are reported, for example, proceeds of long-term debt and transfers in.
Other Financing Uses - ANSW-An operating statement classification in which financial outflows other
than expenditures are reported, for example, transfers out.
penalty - ANSW-A legally mandated addition to a tax on the day it became delinquent (generally, the day
after the day the tax is due).
Program Revenues - ANSW-Revenues linked to a specific function or program and reported separately
from general revenues on the government-wide statement of activities.
property assessment - ANSW-A process by which each parcel of taxable real and personal property
owned by each taxpayer is assigned a valuation.
Special Items - ANSW-Operating statement items that are either unusual or infrequent and are within
management control.
Taxable property - ANSW-All property except that which is exempt from taxation; examples of exempt
property are property owned by governments and property used by some religious and charitable
organizations.
How does the GASB define special items? - ANSW-are presented apart from revenues and expenditures.
Explain the essential differences between revenues and other financing sources and between
expenditures and other financing uses. How is each of these items reported on the governmental funds
statement of revenues, expenditures, and changes in fund balances? - ANSW-• Revenue is defined as an
increase in fund financial resources other than from financing sources such as interfund transfers and
debt issue proceeds.
• Transfers into a fund and the proceeds of debt issues and sales of government assets are examples of
inflows classified as Other Financing Sources of the fund.
• Expenditures represent the cost to purchase a good or service, whereas Other Financing Uses
represent transfers of financial resources from one fund to another fund.
• Other financing sources have the same effect on fund balance as revenues, while other financing uses
have the same effect on fund balance as expenditures, but they are each reported differently within the
fund financial statements. On the government funds statement of revenues, expenditures, and changes
in fund balances revenues are reported by fund and sources, followed by expenditures reported at the
legal level of budgetary control. After a subtotal termed, Excess (deficiency) or revenues over
expenditures, a separate section of the statement reports other financing sources and uses before
arriving at a net change in fund balance.
For which funds are budgetary comparison schedules or statements required? Should the actual
revenues and expenditures on the budgetary comparison schedules be reported on the GAAP basis?
Why or why not? - ANSW-• Budgetary comparison schedules (or statements) must be provided for the
General Fund and each major special revenue fund for which a budget is adopted. In order for budget to
actual comparisons to be meaningful, actual revenues and expenditures must be reported in the same
manner as the budgeted amounts. Actual revenues and expenditures reported in the statement of
revenues, expenditures, and changes in fund balances should be on the GAAP basis.
