Details Title: Accounting 500; Exam 2 Description: Chpt 7 Total Flash Cards: 72 Created: 03/22/2009 13:18:29		New Users: To study from this flashcard set, or to create your own your own study flash cards, REGISTER HERE. Existing Users: CLICK HERE. Additional Accounting Flashcards
Cards in this set: Term Accounting for the Business type activities of state and local govern't Definition Propreitory funds-Internal Service Fund and Enterprise Fund Term Accounting for ISF and Enterprise Fund are similar to Definition accounting for for-profit enterprises Term Account for their own Definition fixed assets, acc depreciation, depreciation exp, and debt (long term and short term) Term Accounted for on the __ basis Definition Accrual Term Do not usually have ____ Definition legal budgets (should have internal budgets for planning and control purposes) Term ISF is set up to provide Definition services to other funds, departments/programs, etc. (Not to general public) Term ISF pricing? Definition Full cost (direct and indirect costs) plus margin to allow for necessary replacements, modernization, expansion, debt service Term ISF billing to other departments/programs should be Definition less than if used outside vendors Term (ISF) Initial and subsequent contribution of cash, other assets, to establish/enlarge fund: Definition Assets Received (FMV) Interfund transfers in Term ISF-If must eventually repay transfers: Definition Assets Received Interfund loan from(fund name) Term ISF-To record billings for services, supplies: Definition Due from ( fund name ) Billings to Department Term ISF-Grants, entitlements, shared revenues: If restricted for capital aquisition, construction, etc: Definition Treat as equity: Contributions from (name source) Term ISF-Operating grants: grants, entitlements, shared rev: If can be used for either operations or capital outlays: Definition Treat as nonoperating rev (name source) Not as contributed capital Term All grants from ISF to governmental funds: Definition Treated as revenue by the receiving fund Term (ISF)Depreciation exp. for contributed assets or assets acquired under a capital grant can be closed to either: Definition Contributed Assets or Retained Earnings Term ISF Assets acquired under lease agreements: Operating leases Definition Expense Term Assets acquired under lease agreements: Capital lease: Capitalize at lesser of Definition PV of minimum lease payments or FMV of the leased property Term ISF-Assets acquired under lease agreements: Capital Lease: Amortized over lease term unless Definition Transfer of title or Bargain purchase option (If either of the above, use estimated economic life) Term ISF-capital leases: allocate lease payments btwn Definition principal and interest components (effective interest method) Term ISF If have mfg activities: Definition Process costing: Std costing and Job order costing Term ISF if used as financing device: Risk financing and related insurance activities Definition Recognize rev and claims in same manner as public entity risk pools Term ISF: Risk financing: Recognize claim when either Definition 1. All of the following: Asserted, Probable that an asset impaired or a liab. incurred, and Loss is reasonably estimatable or Both: an estimatable loss has occurred and It is probable that a claim will be asserted Term ISF-If reasonably possible(not probable) or loss not reasonably estimable, disclose ( but do not accrue) Definition Nature, range of loss, or that amt not reasonably estimable Term Dissolution of ISF options Definition Transfer fund assets to another fund that will continue operation of activity, Distribute assets to another govn't unit, Convert all assets to cash, then ditribute to another governmental unit Term ISF: Other activity Definition Same as normal business enterprise Term ISF-Stmt of net assets(balance sheet) Definition Classified(current, restricted, capital assets; current, lt liab), Net assets: Invested in capital assets, net of related debt, restricted, unrestricted Term ISF: Stmt of rev, exp, and changes in net assets: Format Definition 1. Operating revenues (Billing to Departments, cost of supplies issued, Gross margin)2. Operating exp. 3. Operating income 4.Interfund transfers 5.Change in net assets 6. Net assets: Beginning 7.Net assets: Ending Term ISF: Stmt of CF use Definition Direct method Term ISF: Stmt of cash flows: 1.Activities Definition Operating activities Noncapital financing activities(not: acquisition, construction, improvement related) Capital and related financing activities Investing activities (loans, investments, investment income, investment pools) Term ISF: Stmt of cf: 2. Reconciliaion Definition Of operating income to net cash provided by operating activities Term If more than one ISF must prepare Definition combining stmts showing each isf position activities (for all 3 stmts) Term Enterprise funds provide services Definition to general public on a user charge basis Term Enterprise funds __ basis Definition Accrual Term Enterprise fund records its own Definition fixed assets, accum. deprc., depr exp, and debt (short and long term) Term Enterprise funds use accounting similar to Definition private sector entities providing the same product, service Term EF: Classified balance sheet Definition Current, long term: Assets, liabl. Term EF: Budgetary accounts not Definition used unless required by law Term EF may have restricted Definition Assets ( such as customer deposits, investments to be used to retire debt. Term EF: If restricted assests Definition segregate on balance sheet (assets, liabl.) Term EF plant acct usually has Definition specific categories of assets (based on srv provided: especially utilities) Term EF: Construction period int Definition Capitalized Term EF: Rev. Bonds: Secured by Definition a portion of the enterprise's rev. Term EF: Gerneral obligation bonds that are intended to be serviced from utility rev: reported Definition as a liabl. of the the ef Term EF: Special assessment debt: If assets constructed with special assessment debt proceeds are used in the ef operations: Definition the debt may be reported by the ef Term EF: Long term bonds Either Definition report net of unamortized discount or premium Or report as offset against bond payable(at par) Term EF: Net assets Definition Invested in capital assets, net of related debt, restricted, unrestricted Term EF: Contributions by customers often required to Definition offset assets constructed with the contributions (EX. FERC) Term EF: Accr'd utilities rev: Definition An estimated receivable for unread meters at period end, reverse opening balance in new year (DR Sales) Term EF: Account classification guidance Definition National Association of Regulatory utility commissioners (NARUC) Federal Energy Regulatory commission(FERC) Term EF: Customer advances (read agreements) often collected to Definition help finance construction costs. May/may not be used to offset receivable for future utility srvc bills Term EF: Contribution in lieu of taxes Definition An exp Term EF: contribution in lieu of taxes Definition Enterprise are not assessed propery taxes however they often pay a negotiated amt in lieu of taxes to offset costs bourne by the general fund on their behalf Term EF: Stmt of net assets Definition Classified(current,long term Segregate restricted assets, liab. payable with restricted assests Net Assets: Invested in capital assets, net of related debt, restricted, unrestricted Term EF: Stmt of rev, exp, and changes in net assets Definition 1. operating rev; operating exp; operating income 2. Nonoperating income and deductions 3. Income before contributions 4. captial contributions from customers 5. change in net assets 6. net assets; beginning 7. net assets; ending Term EF: Stmt of cf: Definition use direct method Term EF: stmt of cf: 1. activities Definition Operating activities noncapital financing activities(not: acquisition, construciton, imporvenemt related) capital and related financing activities investing activities(loans, investments, investment income, investment pools Term EF: STMT of cf: 2. reconciliations Definition cash and cash equivalents to the bs ( ending cash=restricted+unrestricted cash and cash equivalents Operating income to net cash provided by operating activities Term EF: stmt of cf: 3. Definition cash and cash equivalents Term ef; if more than one ef Definition must prepare combining stmt showing each ef's position, activities, etc for all 3 stmt Term EF: regulatory accounting principles: bs presents _ first Definition plant assets Term Utility plant in srvc stated at Definition original costs Term If acquired from another utility any excess paid over original cost is treated as Definition utility plant acquisition adjustment(similar to goodwill) amortized over prescribed period Term Other property and investments Definition broader in scope, special funds(similar to restricted assets) deferred debits includes: unamortized debt discount Term Nonutility enterprises: follow industry gaap Definition stds. establised by gasb, fasb, are very similar to those for isf Term Municipal solid waste landfills subject to Definition epa regulation Term MSWLFS must estimate Definition closure costs (assuming performed by a 3rd party) Postclosure maintenance and monitoring for a period of 30 years cost estimates adjusted for inflation (annually) Term MSWLFs owners/operators must provide financial assurances that resources will be available to perform required work Definition 3rd party trusts, surety bonds, letters of credit, insurance, state-sponsored plans Term MSWLF recognize required closure related exp and liab. based on Definition a units of production method (i.e.based on land fill usage vs over time) Term mswlf costs incurred to acquire required equipment, facilities, srvcs recorded Definition as a reduction of the acc'd liab. (not as capital assets) Term If the mswlf is reported in the gf, other not-for-profit record Definition expenditure and fund liab. in current pd to the extent that an acc'd liab would be settled with available fund resources Term if mswlf is reported in gf, other not-for profit Definition excess liab. report in gltdag Term mswlf footnote disclosures Definition nature and source of closure, postclosure, care requirements liab based on landfill capacity to date % of landfill capacity used to date; estimated remaining years how post closure care financial requirements being met (restricted assets) estimates potential changes due to inflation, technology, law regs, etc.