Acg 3501 Final Study Guide

Topics: Balance sheet, Tax, Generally Accepted Accounting Principles Pages: 12 (2972 words) Published: June 20, 2012
3501 Final Exam Study Guide
Component Units
Is the entity a Primary Government?
* All must be true:
1. Separately elected governing body
2. Legally Separate
* Can sue and be sued
* Can sell a lease property in its own name. IF all are true, it is a primary government and 3. Fiscally Independent creates its own financial statements in * Can do all: accordance to GAAP.

* Establish a budget
* Levy taxes or set rates and charges
* Issue long-term debt or bonds.
Is it a component unit of the Primary Government?
* If the primary government appoints a majority of the board * The primary government can use or access the organization’s resources * Primary government is obligated or has assumed an obligation for finance or pay any deficits * If the primary government can impose its will or bear financial benefit or burden. * Can impose its will if any of these are true If only one is true: it is a Related Organization * Remove appointed members of governing board at will not a component unit. * Modify or approve the budget

* Modify or approve rate of fee changes
* Overrule or modify decision of the governing board * Appoint, hire, fire, or reassign management.
* Bear’s financial benefit or burden if any of these are true: * The primary government can use or access the organization’s resources. * The primary government is obligated or has assumed an obligation for finance or pay any deficits. * Obligated in some manner to repay debt.

It is a Component Unit of the Primary Government- Now what?
* Blended if the two boards are substantively the same OR the Component Unit provides service entirely or almost entirely to the primary government. * Otherwise it is reported discretely.

Discrete: All component units that are to be discretely presented are in one single column on the financial statement. Blended: The units are blended into the other funds.
3 Reasons for the change:
* The traditional terminology was not self explanatory and may cause the end users to misunderstand the information provided. * Governments are inconsistent in applying the categories. * Some have questioned whether the historic focus on availability for appropriations best serves the needs of financial statement users. Categories:

* Committed: use its constrained
* Assigned: governments intend use
* Unassigned: Fund balance
* Restricted: externally restricted by their providers (grantors, bondholders, higher governments) * Nonspendable: inherently Nonspendable (example: supplies)

Types of Governments
General Purpose Government: Provide wide variety of services. (Federal, state, cities, towns) Special Purpose Governments: Usually provide only a single or just a few services. (Schools, university, hospitals, ect…) Measurement and Accounting Focus

Economic Resources Measurement Focus: Report on the determination of net income, financial position and cash flows Current Financial Resources: Report on inflows and outflows.

Government Wide Statements| Economic Resources Measurement Focus| Accrual| Governmental Fund Statements| Current Financial Resources| Modified Accrual| Proprietary| Economic Resources Measurement Focus| Accrual| Fiduciary Funds| Economic Resources Measurement Focus| Accrual| Types of Funds

Governmental Funds| Proprietary Funds| Fiduciary|
General Fund| Internal Service| Agency Funds|
Special Revenue Fund| Enterprise | Investment|
Capital Projects Fund| | Private Purpose|
Debt Service Fund| | Trust Funds|
Permanent Fund| | Pension|
Types of Governmental Revenue
Derived tax Revenues: taxes levied on an underlying exchange transaction. The tax is charged to the person or entity that acquires a product, service,...
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