Governmental Accounting and Fund Accounting Flashcards

Which basis of accounting is used by governmental funds under GAAP?

Answer: Modified accrual basis

Governmental funds use the modified accrual basis, recognizing revenues when measurable and available and expenditures when incurred.

Under the modified accrual basis, revenues are recognized when they are:

Answer: Measurable and available

Modified accrual requires revenues to be measurable and available (collectible within the current period or soon enough to pay current liabilities) for recognition.

Which of the following is a proprietary fund type?

Answer: Enterprise Fund

Enterprise Funds are proprietary funds used to account for activities financed by user charges, similar to private business operations.

The General Fund accounts for:

Answer: All financial resources not required to be accounted for in another fund

The General Fund is the chief operating fund and accounts for all financial resources except those required to be accounted for in another fund.

Internal Service Funds are classified as which type of fund?

Answer: Proprietary fund

Internal Service Funds are proprietary funds used to account for services provided by one department to other departments on a cost-reimbursement basis.

Which fund type is used to account for resources held by a government in a trustee or agency capacity?

Answer: Fiduciary funds

Fiduciary funds account for assets held by a government in a trustee or agent capacity for others, such as pension trust funds and custodial funds.

Under GASB standards, which measurement focus do governmental funds use?

Answer: Current financial resources measurement focus

Governmental funds use the current financial resources measurement focus, emphasizing the flow of current financial resources rather than total economic resources.