Exam 3: Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority

Which of the following expenditure classification schemes may be used by governmental funds?

The only difference between modified accrual accounting and accrual accounting is the difference in the recognition of long-term assets and liabilities.

The category "other financing uses" includes transfers from other funds and bond issue proceeds.

GASB standards ____________ that each governmental reporting entity display ___________ General Fund in its general-purpose financial statements.

What are the four classes of nonexchange revenues?

Revenues,but not expense are recorded the same under accrual and modified accrual accounting.

Expenditure is a decrease in fund financial resources (net of liabilities)other than through interfund transfers.

With respect to budgetary reporting by governments,which of the following is not true?

When using modified accrual accounting,revenues should be recognized when measurable and available to finance expenditures of the current period.Property tax revenue is considered available if it is received no more than 60 days after the fiscal year end.

The Village of Lake George's General Fund has the following net resources at year end: Required: Prepare the fund balance section of the Balance Sheet

The Fire Department of a given city received an appropriation in the amount of $14,000,000 for the fiscal year ended June 30,2012.During the month ended July 31,2011,the following transactions occurred: (a)purchase orders were issued in the amount of $650,000; (b)purchase orders,related to (a)above,were filled in the amount of $610,000; the related invoice amount was $595,000; invoices were paid in the amount of $550,000; (c)salaries were accrued and paid in the amount of $600,000.The balance available for the fire department as of July 31,2011 is:

Governments may create special revenue funds whenever a tax or other revenue source is legislated to be used for a specific purpose,other than capital assets or debt service.

Fines and Forfeits are typically recognized:

GASB requires that the budgetary basis of accounting for the General Fund used in the Budget-Actual Comparison Schedule be on the same modified accrual basis as the governmental fund Statement of Revenues,Expenditures and Changes in Fund Balance.

A certain government passed its budget for the fiscal year ended December 31,2012.Estimated Revenues amounted to $13,000,000; Appropriations amounted to $11,900,000; Estimated Other Financing Uses amounted to $700,000; and Estimated Other Financing Sources amounted to $100,000.In the budgetary entry (combining entry):

Purchase orders and contracts result in what for modified accrual accounting and accrual accounting? Modified Accrual Accrual

Encumbrances are recorded when a purchase order is filled or a contract is executed.

Prepare the General Ledger journal entries for the General Fund for the Village of Bath for the year ended December 31,2012 a.The budget was formally adopted.Estimated Revenues Control $2,500,000 and appropriations are estimated to be $2,465,000. b.Revenues were received in the amount of $2,505,000. c.Purchase orders were issued in the amount of $1,300,000. d.Purchase orders were filled in the amount of $1,105,000.The invoice amount was $1,110,000. e.Expenditures,not encumbered,amounted to $1,040,000.(not yet paid) f.Amounts from d and e are paid.

What would be the total Unassigned fund balance?

Revenues for governmental funds should be recognized when measurable and available for expenditure in the current period.