Hannin Essay

The administration essential acquaint accountability for customary capital and a business croupe use its resources as it deems give up. 5. Role of the Budget Commercial its utilise for planning and control purposes, for government budgets carry the authority of law, preventing 1-3. Identify and concisely describe the three organizations that roofy standards for state and local anesthetic governments, the federal government, and nongovernmental non-for-profit organizations. 1. GASB set the news report and m whiztary reporting standards for state and local government in the US.GASB also set accounting and pecuniary reporting standards for governmentally connect not for profit organizations. 2. FASB set standards for profit seeking business and for nongovernmental not for profit organizations. 3. FASAB set the accounting and financial for the federal government. 1-4. What is the definition of a government as agreed upon by the FASB and GASB? Public corporations and bodi es corporate and liquid be governmental organizations. Other organizations argon governmental organizations if they have one(a) or more of the following characteristics. . Popular election of officers or escort (or approval) of a controlling majority of the members of the organizations governing proboscis by officials of one or more state or local governments. 2. The potential for unilateral dissolution by a government with the crystalise assets reverting to a government. 3. The power to enact and enforce a revenue enhancement enhancement levy. 1-5. Describe the hierarchy of GAAP for state and local governments, the federal government, and nongovernmental not-for-profit organizations. (See parable 1-2 come back to this) 1-8.GASB considers budgetary accounting and reporting to be important. joust the principles outlined by GASB related to budgetary accounting and reporting. 1. An annual budget(s) should be adopted by every governmental unit. 2. The accounting system should groundwork the nucleotide for appropriate budgetary control. 3. Comparisons should be included in the appropriate financial statements and schedules for governmental memory boards for which an annual budget has been adopted. 2-2. With regard to GASB rules for the financial reporting entity, answer the following 1. Define the financial reporting entity.It is the elementary government together with its dowry units. 2. Define and give an example of a primary government. Can be a state government, a all-purpose local government such as a city or county, or a special(prenominal) purpose government such as a school district. 3. Define and give an example of a component unit. Are legitimately separate organizations for which the elected officials of the primary government argon financially accountable. 4. Define and describe the two methods of reporting the primary government and component units in the financial reporting entity. a.Primary Government -either appoints a voting ma jority of the governing body of the separate organization or members of the primary governments governing body hold a majority of the seats of the other organizations board. Second, the relationship meets one of the following two criteria a. The other organization provides either a financial burden or benefit to the primary government. b. The primary government can impose its will on the other organization. b. Component units are legally separate organizations for which the elected officials of the primary government are financially accountable.In addition, a component unit can be an organization for which the temper and significance of its relationship with a primary government are such that exclusion would cause the reporting entitys financial statements to be shoddy or incomplete. 2-3. With regard to the Comprehensive Annual Financial Report (CAFR) 1. What are the three major sections? Introductory, Financial, and Statistical. 2. List the government-wide statements. Indicate the mea for surement focal point and land of accounting utilize for the government-wide statements. Basic Financial relations Proprietary Funds Statements Statement of Cash Flows.Governments use the accrual buttocks and the modified accrual tail of accounting. 3. List the governmental fund statements. i. General fund. This fund is used to account for general operations and activities not requiring the use of other funds. ii. Special revenue funds are required to account for the use of revenue earmarked by law for a particular purpose. State and federal fuel tax income revenues require special revenue funds, because federal and state laws restrict these taxes to expatriation uses. iii. Capital projects funds are used to account for the construction or acquisition of located assets9, such as buildings, equipment and roads.Depending on its use, a fixed asset may instead be financed by a special revenue fund or a proprietary fund. iv. Debt answer funds are used to account for m oney that will be used to pay the interest and principal of long-term debts. Bonds used by a government to finance major construction projects, to be paid by tax levies over a period of years, require a debt service fund to account for their repayment. v. Special assessment funds account for public infrastructure improvements financed by special levies against property holders. Sidewalk and alley repairs a great deal rely on special assessments. 4.Indicate the measurement focus and terms of accounting used for the governmental fund statements. It usually rely on a modified accrual base of operations. 5. List the proprietary fund statements. vi. inwrought service funds are used for operations serving other funds or departments within a government on a cost-reimbursement basis. A printing shop, which takes orders for booklets and forms from other offices and is reimbursed for the cost of each order, would be a suitable application for an internal service fund. vii. Enterprise fund s are used for services provided to the public on a user strike basis, similar to the operation of a commercial enterprise.Water and sewage utilities are common examples of government enterprises. 5. Indicate the measurement focus and basis of accounting used for the proprietary fund statements. i. Proprietary funds, used for business-like activities, usually kick the bucket on an accrual basis. Governmental accountants sometimes refer to the accrual basis as full accrual to distinguish it from modified accrual basis accounting. 6. List the fiduciary fund statements. Statement of Changes in Fiduciary last Assets and Statement of Changes in Fiduciary Net Assets. 7.Describe the measurement focus and basis of accounting used for the fiduciary fund statements. The accounting basis applied to fiduciary funds depends upon the needs of a specific fund. If the reliance involves a business-like operation, accrual basis accounting would be appropriate to show the funds favourableness. Acc rual basis is also appropriate for confidence funds using interest and dividends from invested principle amounts to pay for supported programs, because the profitability of those investments would be important. 8. Outline the reports and schedules to be reported as required appurtenant information.Come Back To 2-4. Describe the test for determining whether a governmental fund is a major fund. The General Fund is always considered a major fund. Other governmental funds are considered major when both of the following conditions exist (a) entireness assets, liabilities, revenues, or expenditures of that individual governmental fund constitute 10 percent of the total for the governmental funds category, and (b) total assets, liabilities, revenues, or expenditures of that individual governmental or enterprise fund are 5 percent of the total of the governmental and enterprise categories, combined. 2-10. Not sure