Accounting for Governmental Study Set 1

Business

Quiz 1 :

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Organizations

Quiz 1 :

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Organizations

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Describe the "hierarchy of GAAP" for state and local governments, the federal government, and nongovernmental not-for-profit organizations.
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The "hierarchy of GAAP" refers to the preferential ordering of sources that define accounting and reporting principles for governmental and nongovernmental units. The heirarch serves as a guide for auditors and financial statement preparers.
For state and local governmental units:
A.GASB Statements and Interpretations ,
B.GASB Technical Bulletins and, if cleared by the GASB, AICPA Industry Audit and Accounting Guides and Statements of Position
C.AICPA Practice Bulletins that have been cleared by the GASB
D.Implementation guides (Q As) published by the GASB staff, and practices that are widely recognized and prevalent in state and local governments.
For the federal government and its agencies:
A.FASA B Statements and Interpretations , and AICPA and FASB pronouncements specifically made applicable to federal governmental entities by FASAB Statements or Interpretations. GASB Technical Bulletins and, if cleared by the GASB, AICPA Industry Audit and Accounting Guides and Statements of Position
B.FASAB Technical Bulletins and, if specifically made applicable to federal governmental entities by the AICPA and cleared by the FASAB, AICPA Industry Audit and Accounting Guides and Statements of Position.
C.AICPA AcSEC Practice Bulletins if cleared by the FASAB,  Technical releases of the FASAB Accounting and Auditing Policy Committee.
D.Implementation guides published by the FASAB staff, and practices that are widely recognized and prevalent in the federal government.
For nongovernmental units:
A FASB Statements and Interpretations , FASB Staff Positions , and AICPA Accounting Research Bulletins and Accounting Principles Board Opinions that are not superseded by actions of the FASB
B.FASB Technical Bulletins and, if cleared by the FASB, AICPA Industry Audit and Accounting Guides and Statements of Position
C.AICPA Practice Bulletins that have been cleared by the FASB,  and consensus positions of the FASB Emerging Issues Task Force
D.Implementation guides (Q As) published by the FASB staff, AICPA Accounting Interpretations , Industry Audit and Accounting Guides and Statements of Position not cleared by the FASB, andpractices that are widely recognized and prevalent either generally or in the industry.

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Go to the GASB website (www.gasb.org). What is the mission of GASB
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Government Accounting Standards Board:
An accounting standard setting board or body for governments like federal or state or local governments.
General Mission of GASB:
General mission statements of GASB are:
1.Act as a guide to the auditors and its bond issuers.
2. Educate the general public or users of its financial reports (voters) or creditors (bond issue) for decision making purposes.
Based on the above mission of GASB and as a standard setting body, it always strives to improve and set accounting standards for local and state governments.
Conclusion-
GASB is a standard setting body with mission to act as guide to auditors and educate the general public or creditors relying on such information.

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Obtain a copy of a recent Comprehensive Annual Financial Report (CAFR). These may be obtained by writing the director of finance in a city or county of your choice. Your instructor may have one available for you, or you may obtain one from the GASB website: www.gasb.org. It would be best, but not absolutely necessary, to use a CAFR that has a Certificate of Excellence in Financial Reporting from the Government Finance Officers Association. You will be answering questions related to the CAFR in Chapters 1 through 9. Answer the following questions related to your CAFR. a. What are the inclusive dates of the fiscal year b. Write the name and address of the independent auditor. Is the auditor's opinion unqualified If not, describe the qualification. Is the opinion limited to the basic financial statements, or does the opinion include combining and individual fund statements c. Does the report contain an organization chart A table of contents A list of principal officials A letter of transmittal Is the letter of transmittal dated and signed by the chief financial officer List the major items of discussion in the letter of transmittal. d. Does the report include a Management's Discussion and Analysis List the major items of discussion. e. Does the report include the government-wide statements (Statement of Net Position and Statement of Activities) f. Does the report reflect fund financial statements for governmental, proprietary, and fiduciary funds List those statements. List the major governmental and proprietary funds (the funds that have separate columns in the governmental and proprietary fund statements).
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a.
The inclusive dates of the fiscal year are January to December.
b.
The GASB is audited by MC Gladrey LLP. It is located in New Haven Connecticut.
The auditors have given unqualified opinion.
The opinion has been given on combining and individual fund statements.
c.
The report has single audit section given at the end of the audit report.
d.
Yes. The report contains the table of contents and list of principal officers and signed by chief financial officer.
It states the financial responsibility of the management and internal controls.
e.
Yes. The report contains the management and analysis. The major items of discussion in this report are direct costs of subscription and publications, program expenses, support expenses, pension-related changes not reflected in operating expenses and class action settlement.
f.
No. the report doesn't include the government-wide statements.
g.
No. The report doesn't reflect the fund financial statements.

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Distinguish between private and public sector organization.
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Accounting and financial reporting for state and local governments use, in different places, either the economic resources measurement focus and the accrual basis of accounting or the current financial resources measurement focus and the modified accrual basis of accounting. Discuss the differences in measurement focus and basis of accounting related to ( a ) the conceptual differences, ( b ) differences in revenue recognition, ( c ) differences in expense/expenditure recognition, ( d ) differences in recognition of fixed assets, and ( e ) differences in the recording of long-term debt.
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Identify and briefly describe the three organizations that set standards for state and local governments, the federal government, and nongovernmental notfor- profit organizations.
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What is the definition of a government as agreed upon by the FASB and GASB
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For each of the items below, identify which fund(s) would be used to account for the item and provide a justification for your answer. a. A city government issued general obligation bonds to finance the construction of a new jail. b. A tax of $1.00 per residential phone number is collected by a city government from the phone company. This amount is required by state law to be used for the operation of the 911 emergency phone system. c. A county government expended $1 million to expand the water treatment plant. d. A donor provided investments totaling $4 million to create an endowment, the earnings of which will be used to provide scholarships. e. A donor provided $50,000 to be used to purchase newspaper and magazine subscriptions for the public library. There is no requirement that the original principal may not be spent. f. A city government sold surplus street maintenance trucks for $10,000. g. A city government contributed $500,000 to a pension plan administered by the city for its teachers, public safety employees, and employees of the water department.
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GASB considers budgetary accounting and reporting to be important. List the principles outlined by GASB related to budgetary accounting and reporting.
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Identify and describe the five environmental differences between governments and for-profit business enterprises as identified in the Governmental Accounting Standards Board's Why Governmental Accounting and Financial Reporting Is-and Should Be-Different.
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