CGFM EXAM 2 Study Questions With Correct Answers

Non-Spendable Fund Balance - Answer Assets not in spendable form-Inventories and prepaid items, principal of a permanent fund which may not be spent, and assets held for sale and long-term receivables. Examples: Supplies, inventory, membership fees Restricted Fund Balance - Answer Subject to constraints imposed by external parties or law. Debt covenants (such as a requirement for a sinking fund) or constraints imposed by legislation or federal and state agencies, creditors, contributors or granting agencies Three Categories of net position section of the government-wide Statement of Net Position - Answer Restricted, Committed & Assigned Committed Fund Balance - Answer Governing body formally committed net resources to specific activities. Contractual obligations outstanding. Board approval of large construction contracts would typically represent commitment of the funds. Assigned Fund Balance - Answer Residual balances in funds other than the General Fund or in the general fund that are intended for identified purposes Difference between Committed and Restricted - Answer Committed constraint is imposed by a government upon itself GASB standards state that rainy day funds may be classified as committed only under specific circumstances which are - Answer they are created by a resolution or ordinance that identifies the specific circumstances under which the resources may be expended Other financing sources consist of - Answer transfers in from other funds and proceeds of long-term borrowing Fund Revenues consist of - Answer taxes, charges for services, amounts provided by other entities such as state or federal government Other fund uses - Answer Transfers of cash out of one fund to other funds To recognize revenue from the General Fund transferred to a debt service fund to record payments of interest and principal on general obligation debt - Answer Credit General Fund Tax Revenue Debit General Fund Other Financing Uses-Transfers Out Debit Debt Service Fund Other Financing Sources - Transfer In Credit Debt Service Fund Expenditures Fund Budgetary Accounts - Answer Estimated Revenues, Appropriations, Estimated Other Financing Sources, Estimated Other Financing Uses, Encumbrances Fund Activity Accounts - Answer Revenues, Expenditures, Other Financing Sources, Other Financing Uses Fund Revenues - Answer Tax Revenues, Charges for Services Fund Expenditures - Answer Current, Capital Outlay, Debt Service Other Financing Sources - Answer Transfers In, Debt Proceeds Other Financing Uses - Answer Transfers Out When a PO or Contract is issued as authorized by an appropriation the government recognizes this commitment as - Answer An encumbrance (not yet a liability) JE for City Council approves fiscal year budget for General Fund JE for Financial Statement Accounts - Answer DR Estimated Revenues CR Appropriations Budgetary Fund Balance is a CR NONE JE for City Departments issue PO for goods and services JE for Financial Statement Accounts - Answer DR Encumbrances Control CR Budgetary Fund Balance Reserve for Encumbrances (To Establish the Encumbrance) NONE JE for Goods and Services are received and invoices are presented for payment JE for Financial Statement Accounts - Answer DR Budgetary Fund Balance Reserve for Encumbrances CR Encumbrances Control DR Expenditures (Current) CR Accounts Payable (to Record the Liability) Common form of nonexchange transactions - Answer tax revenue and intergovernmental grants Nonexchange transaction eligibility requrements - Answer Characteristics/Time/Reimbursement/Contingencies-Matching funds Imposed nonexchange transactions - Answer taxes and other assessments imposed by governemnts not derived from underlying transactions. (Property Tax, special assessments, fines and forfeits) Deferred taxes are reported as what on the Balance Sheet - Answer Reported as deferred inflows of resources What are deferred taxes - Answer Taxes expected to be received more than 60 days after fiscal year end. Derived Taxes - Answer taxes assessed on exchange transactions (sales taxes, income taxes, gasoline tax, excise tax) Revenues - Answer Inflows of net financial resources from sources other than inter-fund transfers and debt proceeds. Recognized when they are both measurable and available to finance current expenditures Expenditures - Answer Outflows of net financial resources from sources other than inter-fund transfers that are recognized when a governmental fund incurs a liability pursuant to budgetary authority provided by appropriation Fund Balance - Answer The net position (assets less liabilities) of a governmental fund, which can be classified as non-spendable, restricted, committed, assigned, or unassigned. Estimated revenues are recorded as DR or CR - Answer Debit Actual Revenues are recorded as DR or CR - Answer Credit Estimated Revenue not yet Realized recorded as DR or CR - Answer Generally net DR balance When are appropriations considered to be expended - Answer When authorized liabilities are incurred When does a PO or contract result in liability - Answer When the goods or services are received or a contract is executed What is the JE for PO or Contract issued - Answer DR Encumbrances Control Account CR Budgetary Fund Balance-Reserve for Encumbrances Account What JEs are necessary when goods or services are received or contracts are executed - Answer DR Budgetary Fund Balance - reserve for Encumbrances Account CR Encumbrances Control Account