Chapter 1
Accounting 57 with Wiles at Fresno City College
About this deck
By: Cam Fairbanks
Textbook:
Essentials of Accounting for Governmental and Not-for-Profit Organizations
Created: 2011-01-29
Size: 33 flashcards
Views: 15
Textbook:
Essentials of Accounting for Governmental and Not-for-Profit OrganizationsCreated: 2011-01-29
Size: 33 flashcards
Views: 15
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Free-rider problem
- high demand for good/service with no practical way to sell it
- society believes good/service should be available to everyone
"Solution" to Free-riding?
Governments raise resources to provide desired good/service to public
Heterogeneous Demand
- good/service desired by a group no large enough to influence govt to provide the good/service
- group can form not-for-profit organization that funds that good/service
Similarities of Govt, NFPs, and Businesses
- under the standards of GAAP
- provide a good/service
Differences of Govts, NFPs, and Businesses
- Businesses aim for profit, have residual claim, have stockholders own the corporation
- Govts not aim for profits, no residual claim, have stakeholders who benefit from good/service
- NFPs not aim for profits, no residual claim, have stakeholder
Role of Budget in Govt
- legally binding in a govt
- shows public policy
- prevents officials from spending outside of authorized budget
Stakeholder?
- usu. tax payers
- no residual claim to net assets
FASAB
- set accounting and reporting standards for Federal govt
GASB
- Governmental Accounting Standards Board
- sets standards for state and local govt, and govt-related NFP
FASB
- Financial Accounting Standards Board
- sets standards for private businesses and NFPs
GAAP Hierarchy
- determines precedence of accounting publications
- AICPA responsible for GAAP hierarchy
Definition of Govt by FASB and GASB
has one of following characteristics:
- popular election of officials
- potential of unilateral dissolution by govt
- power to tax
- can issue tax-exempt debt
Govt's Duty (GASB Concept Statement No. 1)
- publicly accountable to society
- justify the raising of public resources and the purposes of using them
Methods of Present Financial Info
- basic financial statements
- disclosure notes to statements
- required supplementary information
- other supplementary information
Accrual Accounting Method
- revenue recognized when earned
- expenses recognized when incurred
Modified Accounting Method
- revenue recognized when measurable and available to finance current expenditures
- expenditures recognized when liability incurred
what is a Fund?
fiscal entity with a double-entry accounting entity set aside for a specific purpose
Governmental Fund Types
- General Fund
- Special Revenue Fund
- Capital Projects Fund
- Debt Service Fund
- Permanent Fund
Proprietary Fund Types
- Enterprise funds
- Internal Source Funds
Fiduciary Fund Types
- Agency Funds
- Pension Trust Funds
- Investment Trust Funds
- Private Purpose Funds
General Fund
account for basic services of govt and where the resource doesn't fit any other fund type
Special Revenue Fund
resources legally restricted for current purposes
Capital Project Fund
resources for major capital projects
Debt Service Fund
payment and interest on general long-term debt
Permanent Fund
legally restricted so only earnings may be used
Enterprise Fund
resources through sales and service charges to external parties
Internal Service Fund
services provided to one dept from another
Agency Fund
govt acts as a collecting/disbursement agent
Pension Trust Fund
govt is trustee for pension plans
Investment Trust Funds
external portion of investment pools
Private Purpose Trust Fund
all other trust arrangements
Basis of Accounting for Each Fund Category
- Fiduciary and Proprietary Funds -- accrual basis
- Governmental Funds -- modified accrual/cash basis
Rule for number of funds required
only one General fund
About this deck
By: Cam Fairbanks
Textbook: Essentials of Accounting for Governmental and Not-for-Profit Organizations
Created: 2011-01-29
Size: 33 flashcards
Views: 15
Textbook:
Essentials of Accounting for Governmental and Not-for-Profit OrganizationsCreated: 2011-01-29
Size: 33 flashcards
Views: 15
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“Simply amazing. The flash cards are smooth, there are many different types of studying tools, and there is a great search engine. I praise you on the awesomeness.”
Dennis
Dennis