Governmental Accounting: Appropriations and Estimated Other Financing Use

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What type of transfer involves shifting resources from an existing fund to establish a new fund?

Cash transfer

Debt service transfer

Residual equity transfer (correct)

Operating transfer out

In the context described, what happens to the recognition of financial transactions in the new fund created by the transfer?

Recognized as other financing sources (correct)

Recognized as revenue

Recognized as liability

Recognized as expenditure

If a general fund makes an operating transfer out to a debt service fund, which account is credited in the general fund's journal entry?

Residual equity

Operating transfer in from debt service fund

Cash (correct)

Debt service fund

What is the purpose of making an operating transfer in the context of fund transfers?

To receive resources from another fund Signup and view all the answers

When a general fund makes a permanent transfer to establish an internal service fund, which category of transactions is recognized in the internal service fund?

Other financing use Signup and view all the answers

What does the recognition of 'other financing sources' indicate for a newly established fund?

Transfer of financial resources Signup and view all the answers

What is the rationale for considering appropriations account and estimated other financing use as pseudo liability accounts?

They reflect the legislative body's commitment to expend. Signup and view all the answers

In the context provided, what is the total amount of estimated other financing uses (EOFU)?

$274,500 Signup and view all the answers

What does the term 'Operating transfer out to other funds' refer to in the budget entries?

Movement of funds from one type of fund to another within the same governmental unit Signup and view all the answers

What is the purpose of recording entries in the subsidiary ledger (revenue ledger) according to the solution provided?

To record detailed information about different revenue sources Signup and view all the answers

What would be the impact on the fund balance after recording the budget entries as shown in the solution provided?

No change Signup and view all the answers

Why are appropriations accounts considered important for governmental units?

To reflect the commitment to expend by the legislative body Signup and view all the answers

What action should be taken before signing a purchase order or contract according to the text?

Review for a valid and sufficient appropriation Signup and view all the answers

Why is the term 'encumbered' used instead of 'expended' in relation to recording appropriations?

To show that liabilities are only estimates at this stage Signup and view all the answers

What risks do administrators face if they incur liabilities beyond what is appropriated?

Legal penalties Signup and view all the answers

Why is it suggested to review each purchase order and contract before signing?

To avoid overspending on unauthorized items Signup and view all the answers

What does prudence dictate in relation to reviewing purchase orders and contracts?

Reviewing for valid appropriations Signup and view all the answers

Why is it important to record that an appropriation has been encumbered?

To account for future liabilities accurately Signup and view all the answers

What is the purpose of quasi external transactions in accounting for inter fund transactions and transfers?

To recognize both revenues and expenditures in the fund financing the department receiving the goods or services Signup and view all the answers

In the example provided of a car repair done by the internal service fund for which the general fund was responsible, what was the journal entry for the general fund?

Expenditure $2,000; Due to ISF $2,000 Signup and view all the answers

What should the lending fund do if an inter fund loan is made with the intent of repayment during the current year or soon thereafter?

Record a current receivable Signup and view all the answers

Which government entity would be remitted the amount of $44,478 based on the information provided?

State government Signup and view all the answers

What is chargeable to the appropriations in the General Fund as per the text?

$252,000 Signup and view all the answers

If an expenditure was recognized in the fund financing the provider department, what type of transaction does this represent?

Quasi external transaction Signup and view all the answers

What does GASBS 34 require in terms of a budget to actual comparison schedule?

To provide the comparison schedule for the General Fund and each major special revenue fund with a legally adopted budget. Signup and view all the answers

Where is GASBS 34 recommended to place the budget to actual comparison schedule?

Immediately following the notes to the financial statements. Signup and view all the answers

How does GASBS 34 suggest presenting the budgetary comparison information?

Either as required supplementary information or as part of the basic financial statements. Signup and view all the answers

What is a key feature of budgets according to the text?

Budgets are legally binding upon administrators. Signup and view all the answers

In what form can a budgetary comparison be presented according to GASBS 34?

Either as part of RSI or as part of the basic financial statements. Signup and view all the answers

Why are budgetary accounts integrated into general ledgers according to the text?

Due to state laws mandating such integration for all governmental funds. Signup and view all the answers