Solution Manual Essentials of Accounting for Governmental and Not-for-Profit Organizations 4th edition BY Copley - Updated 2024
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Course
Essentials of Accounting
Institution
Essentials Of Accounting
Solution Manual Essentials of Accounting for Governmental and Not-for-Profit Organizations 4th edition BY Copley - Updated 2024
Complete Solution Manual
Chapter 02 - Overview of Financial Reporting for State and Local Governments
CHAPTER 2 Overview of Financial Reporting for State and Local Governments
2-1. THE SOLUTION TO THIS AND THE FIRST EXERCISE OF CHAPTERS 1 AND 3 THROUGH 9
WILL DIFFER FROM STUDENT TO STUDENT ASSUMING EACH HAS A DIFFERENT CAFR.
2-2.
A. A FINANCIAL REPORTING ENTITY IS THE PRIMARY GOVERNMENT
TOGETHER WITH ITS COMPONENT UNITS. COMPONENT UNITS ARE
ORGANIZATIONS FOR WHICH THE PRIMARY GOVERNMENT IS FINANCIALLY
ACCOUNTABLE, AND OTHER ORGANIZATIONS FOR WHICH THE NATURE AND
SIGNIFICANCE OF THEIR RELATIONSHIP WITH THE PRIMARY GOVERNMENT
ARE SUCH THAT EXCLUSION WOULD CAUSE THE REPORTING ENTITY'S
FINANCIAL STATEMENTS TO BE MISLEADING OR INCOMPLETE.
B. A PRIMARY GOVERNMENT IS A STATE GOVERNMENT, GENERAL PURPOSE
LOCAL GOVERNMENT, OR SPECIAL PURPOSE GOVERNMENT. AN EXAMPLE OF
A PRIMARY GOVERNMENT WOULD BE ANY STATE, MUNICIPALITY, OR
COUNTY (GENERAL PURPOSE GOVERNMENTS) AND ANY SPECIAL-PURPOSE
GOVERNMENT THAT MEETS THE CERTAIN CRITERIA.
C. A COMPONENT UNIT IS A LEGALLY SEPARATE ORGANIZATION FOR WHICH
THE ELECTED OFFICIALS OF THE PRIMARY GOVERNMENT ARE FINANCIALLY
ACCOUNTABLE. IN ADDITION, A COMPONENT UNIT CAN BE ANOTHER
ORGANIZATION FOR WHICH THE NATURE AND SIGNIFICANCE OF ITS
RELATIONSHIP WITH A PRIMARY GOVERNMENT ARE SUCH THAT EXCLUSION
WOULD CAUSE THE REPORTING ENTITY'S FINANCIAL STATEMENTS TO BE
MISLEADING OR INCOMPLETE.
D. THE TWO PRIMARY METHODS FOR REPORTING COMPONENT UNITS IN THE
FINANCIAL STATEMENTS OF A PRIMARY GOVERNMENT ARE BLENDING AND
DISCRETE PRESENTATION. BLENDING REPORTS THE COMPONENT UNIT AS
ONE OF THE FUNDS OF THE PRIMARY GOVERNMENT, WHICH THEN RESULTS IN
INCLUDING THE COMPONENT UNIT AS PART OF THE BASIC FINANCIAL
STATEMENTS. BLENDING IS USED WHEN COMPONENT UNITS ARE
SUFFICIENTLY INTERTWINED WITH THE PRIMARY GOVERNMENT THAT THEY
ARE, IN SUBSTANCE, THE SAME AS THE PRIMARY GOVERNMENT. BLENDING
IS ALSO USED IF THE COMPONENT UNIT PROVIDES SERVICES SOLELY TO THE
PRIMARY GOVERNMENT OR IF THE COMPONENT UNIT’S DEBTS ARE EXPECTED
TO BE PAID BY THE PRIMARY GOVERNMENT.
DISCRETE PRESENTATION INVOLVES REPORTING THE COMPONENT UNIT IN A
COLUMN TO THE RIGHT OF THE PRIMARY GOVERNMENT IN THE
GOVERNMENT-WIDE FINANCIAL STATEMENTS OF THE REPORTING ENTITY.
, Chapter 02 - Overview of Financial Reporting for State and Local Governments
2-3.
A. THE THREE MAJOR SECTIONS OF THE COMPREHENSIVE ANNUAL FINANCIAL REPORT
ARE THE INTRODUCTORY, FINANCIAL, AND STATISTICAL SECTIONS.
B. THE GOVERNMENT-WIDE FINANCIAL STATEMENTS ARE THE STATEMENT OF NET
POSITION AND THE STATEMENT OF ACTIVITIES. GOVERNMENT-WIDE STATEMENTS
ARE PRESENTED USING THE ECONOMIC RESOURCES MEASUREMENT FOCUS AND THE
ACCRUAL BASIS OF ACCOUNTING.
C. THE GOVERNMENTAL FUND STATEMENTS ARE THE BALANCE SHEET AND THE
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES.
GOVERNMENTAL FUND STATEMENTS ARE PRESENTED USING THE CURRENT
FINANCIAL RESOURCES MEASUREMENT FOCUS AND MODIFIED ACCRUAL BASIS OF
ACCOUNTING.
D. THE PROPRIETARY FUND STATEMENTS ARE THE STATEMENT OF NET POSITION
(OR BALANCE SHEET), STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN
FUND NET POSITION, AND THE STATEMENT OF CASH FLOWS. THE PROPRIETARY
FUND STATEMENTS ARE PREPARED USING THE ECONOMIC RESOURCES
MEASUREMENT FOCUS AND THE ACCRUAL BASIS OF ACCOUNTING.
E. THE FIDUCIARY FUND STATEMENTS ARE THE STATEMENT OF FIDUCIARY NET
POSITION AND THE STATEMENT OF CHANGES IN FIDUCIARY NET POSITION.
FIDUCIARY FUND STATEMENTS ARE PREPARED USING THE ECONOMIC RESOURCES
MEASUREMENT FOCUS AND THE ACCRUAL BASIS OF ACCOUNTING.
F. MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) IS CONSIDERED TO BE
REQUIRED SUPPLEMENTARY INFORMATION (RSI) AND IS PRESENTED IN THE
FINANCIAL SECTION AFTER THE AUDITOR'S REPORT. THE REMAINDER OF RSI IS
GENERALLY PRESENTED AFTER THE NOTES TO THE FINANCIAL STATEMENTS AND
INCLUDES (A) BUDGETARY COMPARISON SCHEDULES, (B ) INFORMATION
REGARDING INFRASTRUCTURE ASSETS WHEN USING THE MODIFIED APPROACH (C)
SCHEDULES REQUIRED FOR DEFINED BENEFIT PENSION PLANS, AND (D)
INFORMATION REQUIRED FOR EXTERNAL FINANCING POOLS.
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