Question 1 (20 points) Listen Case Study: The City of Greenwood The City of Greenwood is a governmental organization responsible for providing essential public services to its citizens. It operates as a local municipality and serves a diverse population, including residents, businesses, and visitors. The city's financial reporting follows the standards set by the Governmental Accounting Standards Board (GASB) to ensure transparency and accountability in its financial statements. The City of Greenwood exists to improve the well-being of its citizens by providing a wide range of public services, such as education, infrastructure development, public safety, and recreational facilities. Unlike commercial businesses, the city's primary goal is not to generate profits for its owners but to ensure the welfare of the community. For financial accounting and reporting, the City of Greenwood adheres to the guidelines and standards set by the GASB. The GASB is responsible for establishing and improving accounting standards for state and local governmental organizations, including not-for-profit entities that meet specific criteria. The City of Greenwood is classified as a governmental organization based on the following characteristics agreed upon by GASB and FASB: The city's officers are either popularly elected or appointed by officials of state or local governments. The city has the authority to enact and enforce tax levies to fund its operations. The city has the potential for unilateral dissolution by a government, with net assets reverting to the government. The City of Greenwood follows authoritative GAAP for state and local governments, which includes GASB Statements and Interpretations. If a specific accounting treatment is not specified in GASB Statements, the city will consider GASB Implementation Guides and certain AICPA literature cleared by the GASB. If necessary, the city may refer to other non-authoritative sources for guidance. The City of Greenwood applies the economic resources measurement focus, which includes the measurement of all economic resources, such as capital assets and long- term debt. Additionally, the city follows the accrual basis of accounting, recognizing revenues when earned and expenses when incurred. The mission of the GASB is to establish and improve standards of state and local governmental accounting and financial reporting, ensuring that the financial reports provide useful information to users and educate the public, including issuers, auditors, and financial report users. The City of Greenwood will use specific funds to record various transactions: a) Capital Projects Fund: Used to finance construction of capital assets like a new city hall or a public library. b) Special Revenue Fund: Reserved for restricted tax revenues, such as a specific sales tax for park maintenance. c) Enterprise Fund: Used for activities like the water department, where the government charges fees for services. d) Private-Purpose Trust Fund: Manages trust resources that benefit individuals rather than the government or the community broadly. e) Special Revenue Fund: Appropriate for resources restricted by donors, like a donation for a community library project. f) General Fund: Used for transactions that are neither fiduciary nor proprietary and not restricted to a particular purpose, like proceeds from the sale of city equipment. The City of Greenwood takes pride in its commitment to financial accountability and reporting, ensuring that its resources are effectively utilized to serve the needs of its citizens and foster the overall well-being of the community. What is the primary purpose of the City of Greenwood, a governmental organization? To serve businesses and corporations To ensure the welfare of the community by providing public services To maximize shareholder wealth To generate profits for its owners Question 2 (20 points) Listen Case Study: The City of Greenwood The City of Greenwood is a governmental organization responsible for providing essential public services to its citizens. It operates as a local municipality and serves a diverse population, including residents, businesses, and visitors. The city's financial reporting follows the standards set by the Governmental Accounting Standards Board (GASB) to ensure transparency and accountability in its financial statements. The City of Greenwood exists to improve the well-being of its citizens by providing a wide range of public services, such as education, infrastructure development, public safety, and recreational facilities. Unlike commercial businesses, the city's primary goal is not to generate profits for its owners but to ensure the welfare of the community. For financial accounting and reporting, the City of Greenwood adheres to the guidelines and standards set by the GASB. The GASB is responsible for establishing and improving accounting standards for state and local governmental organizations, including not-for-profit entities that meet specific criteria. The City of Greenwood is classified as a governmental organization based on the following characteristics agreed upon by GASB and FASB: The city's officers are either popularly elected or appointed by officials of state or local governments. The city has the authority to enact and enforce tax levies to fund its operations. The city has the potential for unilateral dissolution by a government, with net assets reverting to the government. The City of Greenwood follows authoritative GAAP for state and local governments, which includes GASB Statements and Interpretations. If a specific accounting treatment is not specified in GASB Statements, the city will consider GASB Implementation Guides and certain AICPA literature cleared by the GASB. If necessary, the city may refer to other non-authoritative sources for guidance. The City of Greenwood applies the economic resources measurement focus, which includes the measurement of all economic resources, such as capital assets and long- term debt. Additionally, the city follows the accrual basis of accounting, recognizing revenues when earned and expenses when incurred. The mission of the GASB is to establish and improve standards of state and local governmental accounting and financial reporting, ensuring that the financial reports provide useful information to users and educate the public, including issuers, auditors, and financial report users. The City of Greenwood will use specific funds to record various transactions: a) Capital Projects Fund: Used to finance construction of capital assets like a new city hall or a public library. b) Special Revenue Fund: Reserved for restricted tax revenues, such as a specific sales tax for park maintenance. c) Enterprise Fund: Used for activities like the water department, where the government charges fees for services. d) Private-Purpose Trust Fund: Manages trust resources that benefit individuals rather than the government or the community broadly. e) Special Revenue Fund: Appropriate for resources restricted by donors, like a donation for a community library project. f) General Fund: Used for transactions that are neither fiduciary nor proprietary and not restricted to a particular purpose, like proceeds from the sale of city equipment. The City of Greenwood takes pride in its commitment to financial accountability and reporting, ensuring that its resources are effectively utilized to serve the needs of its citizens and foster the overall well-being of the community. How is the City of Greenwood classified as a governmental organization according to GASB and FASB? The city's officers are appointed by officials of state or local governments. The city generates its funding through sales or revenue. The city follows the accrual basis of accounting. The city has the potential for unilateral dissolution by a government, with net assets reverting to the government.