Acc 428

The document discusses three organizations that set accounting standards for different levels of government and non-profits. It also covers the differences between accrual and modified accrual accounting, including how they recognize revenues, expenses, fixed assets, and long-term debt. It describes the purpose and mission of GASB in establishing accounting standards for state and local governments.

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Acc 428

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Brittany Centers

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ACC 428 Brittany McKnight Chapter 1

3) Identify and briefly describe the three organizations that set standards for state and local governments, the federal government, and nongovernmental not-for-profit organizations. a. Federal Accounting Standards Board(FASAB)- set standards for federal government financial information unless objected by the U.S Government Accountability, U.S. Department of Treasury, or the U.S. Office of Management and Budget. b. Financial Accounting Standards board (FASB)- Provides accounting and financial reporting standards for not-for-profit organizations and for private -profit seeking businesses. c. Governmental Accounting Standards Board (GASB)- Set standards for the local and state governments and public not for profit organizations. 6) A) The conceptual differences- The Accrual Basis of Accounting, is government -wide and used by commercial businesses and Modified accrual helps with needs of the public. B) Differences revenue recognition- The accrual basis of accounting, recognizes revenues when they are earned and recognizes expenses when the goods or services are used up. Modified accrual focuses more on measurable and available to finance the expenditures of the current period. Expenditures are recognized in the period the fund liability is incurred. C) Differences in expense/ expenditure recognition- Accrual basis of accounting recognizes expenses when they are related to goods and services that are used up. Modified accrual recognizes expenditures, not expenses in the period in which the fund liability occurred. D) Differences in recognition of fixed assets- Modified accrual basis of accounting, are fixed assets and now reported in government funds. Accrual basis of accounting, Government activities are reported and prepared on the economic resource reports. E) Differences in the recording of long-term debt- Modified accrual accounting method is not reported governmental funds, and in Accrual basis long-term debit is reported unlike in modified accrual. 9) To establish and improve standards of state and local governmental accounting and financial reporting that will: Result in useful information for users of financial reports, and

Guide and educate the public, including issuers, auditors, and users of those financial reports. The mission is accomplished through a comprehensive and independent process that encourages broad participation, objectively considers all stakeholder views, and is subject to oversight by the Financial Accounting Foundations Board of Trustees. 10) A) A capitol projects fund. This is a government fund allocated for building a new facility. B ) Special Revenue Fund. This is a special revenue source allocated for expenditure for a specific purpose C ) A capitol projects fund. Again, this is a government fund allocated for the expansion of an existing facility D) Private Purpose trust fund. This is money allocated for scholarships and can only use the earnings and not the principal. E) General Fund. This is an allocation for basic services provided by the government. F) Enterprise funds. This is a resource sold external to the government that brought about gains.

Chapter 2
3) a. Managements discussion and analysis, basic financial statements, required supplementary info b. Statement of net assets and Statement of activities. The government wide financial statements use the accrual basis of accounting. c. Statements of Revenue, expenditures and change in fund balance. The current financial resource management focus and the modified accrual basis of accounting is used. d. Net assets, statements of revenues, expenses, and changes in fund net assets, and statements of cash flows. The proprietary funds use the economic resources measurement focus and the accrual basis of accounting for reporting. e. Fiduciary funds include statement of fiduciary net assets and statement of changes in fiduciary net assets. Fiduciary funds use the economic resources measurement focus and the accrual accounting but activities are not reported. f. Required supplemental information includes the following: information about infrastructure assets suing the modified approach, budgetary comparison schedule, schedule of funding progress of pension plans,

schedule of employer contributions of pension plans, and schedules required for external financing pools. 4) 1. Total assets, liabilities, revenues, or expenditures of that individual governmental fund constitutes 10% of the total for the governmental funds category, and 2. total assets, liabilities, revenues, or expenditures of that individual governmental fund are 5% of the total of the governmental and enterprise categories, combined. 5) The GASB statement has four sections rather than the three required by the FASB. 6) The net asset classification would cover all long term pension, employee benefit plans and trust funds. It may also include noncurrent assets and long term liabilities that are held in trust for some purpose.