The Expenditures control account in the General Fund is debited when: A) Supplies are ordered. B) The budget is recorded. C) The books are closed at the end of the year. D) Equipment previously ordered is received. D) Equipment previously ordered is received.
GASB has stated that both the positive and negative aspects of the government's operations should be presented to inform the reader about whether the government is in better or worse financial condition than in the prior year. The focus should be on only significant or material items.
When closing out the General Fund and Special Revenue Funds of a state or local governmental unit, the balance of the operating statement are closed to: A) Budgetary Fund Balance - Reserved for Encumbrances.
The initial transfer of cash from the General Fund to establish a motor pool internal service fund would require the General Fund to credit Cash and debit: A) Investment in Internal Service Fund. B) Other Financing Uses-Transfers Out Control. C) Expenditures - Vehicle maintenance.
The accounting and financial reporting for revenues within a governmental entity is determined by the economic substance of the underlying transactions. Generally accepted accounting principles have established criteria for recognition based on the classification and characteristics of the transaction.
Because they typically arise from internal actions (management decisions) rather than actions external to the entity (encumbrances), designations are reported as part of unreserved fund balance. The amount and nature of the designation should be explained in a.
Revenues in the proprietary funds are recognized using the accrual basis of accounting, (i .e., in the period in which they are earned). They are classified either as operating or nonoperating revenues. Operating revenues are generated by the primary activity of the fund. Conversely, nonoperating revenues are not generated by the primary activity of the fund, but by other means, such as through grants or interest earnings.
For both government-mandated nonexchange transactions and voluntary nonexchange transactions, revenues and receivables should be recognized when all eligibility requirements have been met. For revenues accounted for on a modified accrual basis, the criteria are extended to include the availability of the resources.
Fund balance and net assets are the difference between fund assets and liabilities reflected on the balance sheet or statement of net assets. Because of the current financial resources measurement focus of governmental funds, fund balance is often considered a measure of available expendable financial resources.
This is a particularly important measure in the general fund because it reflects the primary functions of the government and includes both state aid and local tax revenues. The relative amount of unreserved fund balance reflected in the general fund is used by rating agencies as a measure of financial strength of the government.
The aggregate fund balance in the debt service fund is legally reserved for the payment of bonded indebtedness and is not available for other purposes until all bonded indebtedness is liquidated.
Narrative explanations of combining, individual fund, account group, and component unit statements and schedules should provide information not included in the financial statements, notes to the financial statements, and schedules that is necessary to
Separately disclosed for governmental and business-type activities: Beginning and ending balances and acquisitions and dispositions for the year for each major class of capital asset and the related accumulated depreciation reported
Required Supplementary Information (RSI) Required supplementary information consists of statements, schedules, statistical data, or other information that GASB has determined is necessary to supplement, although not required to be a part of, the general purpose financial statements of a governmental entity .
The note disclosures should contain information about long-term liabilities, including long-term debt instruments such as bonds, notes, loans, and leases payable, as well as other long-term liabilities such as compensated absences, claims, and judgments, as follows: Beginning- and end-of-year balances.
An analysis of balances and transactions on a fund basis, addressing the reasons for significant changes in fund balances or fund net assets. The analysis should also include information on whether restrictions, commitments, or other limitations significantly affect the availability of fund resources for future use.
Historical collections that are not capitalized should be described and reasons for not capitalizing should be provided
Trust Funds may be reported as above as appropriate or may be reported separately