Exercise 1-3. Matching

Place the abbreviations corresponding to the appropriate reporting attribute(s) in the spaces provided for each financial statement. Include all that apply.

Activities or Funds

Governmental activities - GA Business-type activities - BTA Governmental funds GF Proprietary funds - PF Fiduciary funds - FF

Basis of Accounting

Accrual A Modified accrual MA

Measurement Focus

Economic resources ER Current financial resources CFR

Financial Statements	Activities or Funds Reported	Basis of Accounting	Measurement Focus
Statement of net assetsgovernment-wide
Statement of activitiesgovernment-wide
Balance sheetgovernmental funds
Statement of revenues, expenditures, and changes in fund balancesgovernmental funds
Statement of net assetsproprietary funds
Statement of revenues, expenses, and changes in fund net assetsproprietary funds
Statement of cash flowsproprietary funds
Statement of fiduciary net assets
Statement of changes in fiduciary net assets

Exercise 2-3 True or False

Write T if the corresponding statement is true. If the statement is false, write F and state what changes should be made to make it a true statement.

1. Activities of a general purpose government that provide the basis for GASBs financial accounting and reporting framework consist of governmental, business-type, and fiduciary.

2. The permanent fund is one of the several types of governmental funds.

3. Government-wide financial statements report financial transactions related to the governmental, business-type, and fiduciary activities of the government.

Fiduciary activities are reported only on the fiduciary fund financial statements.

4. A statement of revenues, expenditures, and changes in fund balances is used to report the inflows and outflows of current financial resources of governmental funds.

5. The accounting system for proprietary funds should provide for integration of budgetary accounts.

Integration of budgetary accounts is required for certain governmental fund types, but is not recommended for proprietary funds.

6. Financial information for component units must be reported by discrete presentation.

A component unit with activities closely related to the primary government are reported using blending, which reports the component unit financial information in the same column as the primary government.

7. All assets, both current and noncurrent, and all liabilities, both current and noncurrent, are reported in the government-wide financial statements.

8. All proprietary fund financial information is reported in the Business-type Activities column of the government-wide financial statements.

All enterprise fund financial information is reported in the Business-type Activities column of the government-wide financial statements. However, most internal service funds predominantly provide goods or services to governmental funds and therefore the financial information of these funds is generally reported in the Governmental Activities column.

9. Depreciation should be reported in the financial statements of the General Fund for general capital assets accounted for in the General Fund.

Depreciation of general capital assets should be reported in the Governmental Activities column of the government-wide financial statements but not in the governmental fund financial statements.

10. In addition to the General Fund, in governmental and proprietary fund financial statements, the only individual funds for which financial information is reported in separate columns are major funds.

Exercise 2-5 Matching Funds with Transactions.

Choose the letter of the sample transaction in the right-hand column that would most likely be reported in the fund listed in the left-hand column.

Fund

Example

Agency - Capital projects - Debt service - Enterprise - General - Internal service - Investment trust - Pension trust - Permanent - Private-purpose trust - Special revenue -

a. Construction of highways, bridges, or parks. b. Administrative expenses of the city managers office. c. Gifts in which the principal must be invested and preserved but the investment earnings must be used to provide scholarships to children of police officers who died in the line of duty. d. Costs of a central purchasing and warehouse function. e. Assets held for external government participants in the governments investment pool for the purpose of earning investment income. f. Gifts in which the principal must be invested and preserved but the investment earnings can be used for public purposes. g. Costs of operating a municipal swimming pool. h. Grant revenues restricted for particular operating purposes. i. Assets held in trust to provide retirement benefits for municipal workers. j. Principal and interest payments on general long-term debt. k. Taxes collected on behalf of another governmental unit.