Accounting for Governmental

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Quiz 14 :

Financial Reporting by the Federal Government

Quiz 14 :

Financial Reporting by the Federal Government

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Using the information from exercise 14-6, prepare a schedule showing the status of the appropriation at the end of the first quarter.
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The federal government has passed the Chief Financial Officers' Act in 1990, for improving the financial management system of the federal government agencies, which are handled by the Office of Federal Financial Management under the Office of Management and Budget. The Office of Management and Budget, the Government Accountability Office and the Department of the Treasury are in-charge of the financial management for federal government agencies.
The federal agencies uses two sets of accounts known as the budgetary accounts and the proprietary accounts. The budgetary accounts records the federal grants provided to these agencies and the expenditures of the agencies while the proprietary accounts are the accrual accounts of the revenues, expenditures, assets, and liabilities on the basis of which the agencies financial statements are prepared. The journal entries for recording the budgetary transactions of these agencies contain appropriations (federal grants), unapportioned - authority (apportionments balance) and apportionments (allocations of the grants) and , allotments (dividing the allocated funds for programs), obligations (commitments) and expended appropriations (used grants). For proprietary transactions, the accounts used are the fund balance with treasury, unexpended appropriations, and other general journal accounts like accounts payable, expenses etc.
From the question and exercises 14-6, the journal entry for the given events are given as:
img The status of the appropriations for the first quarter shows the balance of the budgetary accounts like unapportioned authority, apportionments, allotments, obligations for undelivered orders and the expended appropriations. Therefore, the status of the appropriation by the end of first quarter is prepared as:
img

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The 2008 financial statements of the U.S. Government are available at: http://www.gao.gov/financial/fy2008/08frusg.pdf. Use these to answer the following questions: a. Statement of Net Costs 1. What are the three largest government units based on net cost 2. Which government department operates at the largest net profit b. Statement of Operations and Changes in Net Position 3. What are the two largest sources of revenue to the federal government 4. Which item on this statement articulates (agrees) with the Statement of Net Costs c. Balance Sheet 5. What are the two largest liabilities reported on a balance sheet 6. Which item on this statement articulates with the Statement of Operations and Changes in Net Position
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Financial Statements of the U.S. Government
Statement of Net Costs
1.the three largest government units based on net cost are:
Department of Defense  $ 740.8 billion
Health Human Services  $ 712.7 billion
Social Security Administration  $  663.6 billion
2.The government department that operates at the largest net profit is:
U.S. Postal Service  $ 13.6 billion profit
Statement of Operations and Changes in Net Position
3.The two largest sources of revenue to the federal government are:
Individual income taxes and tax withholdings $ 2,078.4 billion
Corporate income taxes $ 299.7 billion
4.The  item on this statement that articulates (agrees) with the Statement of Net Costs is:
Consolidated net cost ($ 3,640.7 billion) articulates with total cost on the Statement of Net Cost
Balance Sheet
5.The two largest liabilities reported on the balance sheet are:
Federal debt securities $ 5,836.2 billion
Federal employee and veteran benefits $ 5,318.9 billion
6.The item on this statement that articulates with the Statement of Operations and Changes in Net Position is:
Net position, end of year of  $ (10,203.5) billion agrees with Total net position.

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The 2008 financial statements of the Internal Revenue Service are avail­able at: http://www.gao.gov/new.items/d09119.pdf. Use these to answer the following questions: a. Statement of Net Costs 1. What are the IRS's two largest programs based on net cost b. Statement of Changes in Net Position 2. What is the largest source of financing for the activities of the IRS c. Statement of Custodial Activity 3. What activity is reported in this statement (i.e., what is the IRS doing)
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Financial Statements of the U.S. Internal Revenue Service
Statement of Net Costs
1.The two largest programs are Tax Compliance ( $ 7,851 million) and Filing and Account Services ($ 3,541 million).
Statement of Changes in Net Position
2.The largest source of financing for the activities of the IRS is Congressional appropriation ( $ 11,095 million).
Statement of Custodial Activity
3.The IRS collects taxes (individual and corporate income, excise, estate and gift and other) and remits the amounts to the Dept. of Treasury.

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What are the required financial statements of the U.S. government
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What are the required financial statements of a federal agency
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Assume a federal agency has the following events: 1. Receives a warrant from the Treasury notifying the agency of appropria­tions of $2,400,000. 2. OMB apportions one-fourth of the appropriation for the first quarter of the year. 3. The director of the agency allots $590,000 to program units. 4. Program units place orders of $550,000. 5. Supplies ($100,000) and services ($320,000) are received during the first quarter. Supplies of $80,000 were used in the quarter. Required: Prepare any necessary journal entries to reflect the events described above. Identify whether the entry is a budgetary or proprietary type.
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The Mosquito Abatement Commission is a newly organized federal agency with three primary programs: Coordination of state government abatement functions, conduct research on mosquito abatement, and promote abatement through public education. The following information is available at the end of the first quarter (December 31, 2012): img Required: Prepare a Statement of Net Costs for the quarter ended December 31.
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Assume the Federal Interstate Commission began the fiscal year with the following account balances: img 1. Congress passed a spending bill providing $12,000,000 to fund the agency's operations for the year. 2. During the first quarter the commission processed the following items for payment (all items were paid by Treasury in the first quarter). img 3. Unpaid wages at the end of the quarter totaled $25,000. 4. In addition to the items paid in item 2, the commission received supplies of $12,000 and contracted services of $70,000 that are to be processed for payment in January. 5. Unused supplies on hand totaled $209,000 at December 31. 6. Depreciation for the quarter is $60,000. Required: a. Prepare journal entries in the proprietary accounts for the events described above. b. Prepare a Statement of Changes in Net Position for the quarter ended December 31. (Assume the amount of appropriations used is $3,607,000 and use the format appearing in Illustration 14-11.) c. Prepare a Balance Sheet as of December 31.
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What bodies are responsible for establishing accounting standards for the federal government and its agencies
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