ACCT 430: Chapter 2 - Principles of accounting and financial reporting for state and local governments

accrual basis

the basis of accounting under which revenues are recorded when earned and expenditures (or expenses) are recorded as soon as they result in liabilities for benefits received, notwithstanding that the receipt of cash or the payment of cash may take place,

agency funds

funds consisting of resources received and held by the government as an agent for others; for example, taxes collected and held by a municipality for a school district. [sometimes resources held by a government for other organizations are handled through

available

collectible within the current period or soon enough thereafter to be used to pay liability of the current period

business-type activities

commercial-type activities of a government, such as public utilities (e.g., electric, water, gas, and sewer utilities), transportation systems, toll roads, toll bridges, hospitals, parking garages and lots, liquor stores, gold courses, and swimming pools

captial projects funds (CPF)

a fund created to account for all resources to be used for the construction or acquisition of designated capital assets by a government except those financed by proprietary or fiduciary funds.

current financial resources

cash or items expected to be converted into cash during the current period or soon enough thereafter to pay current period liabilities

debt service funds (DSF)

a fund established to finance and account for the payment of interest and principal on all tax-supported debt, serial and term, including that payable from special assessments.

economic resources measurement focus

attention on measuring the total economic resources that flow in and out of the government rather than on measuring current financial resources only

enterprise funds (EF)

a fund established to finance and account for the acquisition, operation, and maintenance of governmental facilities and services that are entirely or predominantly self-supporting by user charges; or for when the governing body of the government has deci

escheat properties

private properties that revert to government ownership upon the death of the owner if there are no legal claimants or heirs

expenditure

an expenditure is recorded when liabilities are incurred pursuant to authority given in an appropriation (q.v.). if the accounts are kept on the accrual basis (q.v.) or the modified accrual basis (q.v.), this term designates the cost of goods delivered or

expense

a charge incurred, whether paid or unpaid, for operation, maintenance, interest, and other charges presumed to benefit the current fiscal period

fiduciary activities

activities in which the government acts in fiduciary capacity either as an agent or trustee for parties outside the government, for example in the collection of taxes or amounts bequeathed from private citizens, as well as assets held for employee pension

fund

a fiscal and accounting entity with a self-balancing set of accounts recording cash and other financial resources together with all related liabilities and residual equities or balances, and changes therein, which are segregated for the purpose of carryin

fund balances

the portion of fund equity (q.v.) available for appropriation

fund equity

the excess of fund assets and resources over fund liabilities. a portion of the equity of a governmental fund may be reserved (q.v.) or designated (q.v.); the remainder is referred to as fund balance.

general fund

a fund used to account for all transactions of a government that are not accounted for in another fund. [the general fund is used to account for the ordinary operations of a government that are financed from taxes and other general revenues]

governmental activities

core governmental services, such as protection of life and property (e.g., police and fire protection), public works (e.g., streets and highways, bridges, and public buildings), parks and recreation facilities and programs, and cultural and social service

governmental funds

a generic classification used by the GASB to refer to all funds other than proprietary and fiduciary funds. the general fund, special revenue funds, capital projects funds, debt service funds, and permanent funds are the types of funds referred to as gove

internal service funds (ISF)

funds established to finance and account for services and commodities furnished by a designated department or agency to other departments and agencies within a single government or to other governments. amounts expended by the fund are restored thereto ei

investment trust funds

funds used to account for the assets, liabilities, net assets, and changes in net assets corresponding to the equity of the external participants.

major funds

see chapter 1 notecard

modified accrual basis

under the modified accrual basis of accounting, required for use by governmental funds (q.v.), revenues are recognized in the period in which they become available and measurable, and expenditures are recognized at the time a liability is incurred pursuan

pension trust funds (PTF)

see public employee retirement systems -- the organizations that collect retirement and other employee benefit contributions from government employers and employees, manage assets, and make payments to qualified retirants, beneficiaries, and disabled empl

permanent funds

governmental-type funds used to account for public-purpose trusts for which the earnings are expendable for a specified purpose, but the principal amount is not expendable (i.e., and endowment)

private-purpose trust funds

funds that account for contributions received under a trust agreement in which the investment income of an endowment is intended to benefit an external individual, organization, or government

proprietary funds

sometimes referred to as income-determination, business-like, or commercial-type funds of a state or local government. examples are enterprise funds and internal service funds.

special revenue funds (SRF)

Funds used to account for revenues from specific taxes or other earmarked revenue sources that by law are designated to finance particular functions or activities of government. after the fund is established, it usually continues year after year until dis