Questions from Accounting for Government and Non-Profit

Q: A government accounts for inventory on the consumption basis. Why do

A government accounts for inventory on the consumption basis. Why do some accountants believe that it should offset the year‐end inventory balance with a fund balance—nonspendable when no comparable f...

Q: A government accounts for inventory on the purchases basis. Why must

A government accounts for inventory on the purchases basis. Why must it offset its year‐end inventory balance with an addition to fund balance?

Q: Many accountants note that for most governments the reported “bottom line

Many accountants note that for most governments the reported “bottom line” of their financial statements (i.e., revenues less expenditures/expenses and other charges that affect fund balance/net posit...

Q: A public school district recently converted its budget from an object to

A public school district recently converted its budget from an object to a program format. The district is organized into three instructional divisions: elementary school (kindergarten through grade 6...

Q: Governments are not required to accrue interest on long‐term debt

Governments are not required to accrue interest on long‐term debt in governmental funds even if the interest is applicable to a current period and will be due the first day of the following year. Expl...

Q: A school district accounts for its pension costs in a governmental fund

A school district accounts for its pension costs in a governmental fund. In a particular year the district’s actuary recommends that it contribute $18 million for the year. The district, however, had...

Q: A city’s electric utility transfers $40 million to its general fund

A city’s electric utility transfers $40 million to its general fund. Of this amount, $30 million is a return of the general fund’s initial contribution of “start‐up capital.” The balance is a payment...

Q: A government’s unassigned fund balance in the general fund at year‐

A government’s unassigned fund balance in the general fund at year‐end should be indicative of the amount that the government has available for appropriation in future years. Explain and provide an ex...

Q: Per GASB standards if a government gives a cash advance to a

Per GASB standards if a government gives a cash advance to a grantee and the grantee has not yet satisfied all eligibility requirements, the government would offset its credit to cash with a debit to...

Q: A state’s department of human resources is responsible for providing certain training

A state’s department of human resources is responsible for providing certain training courses for various agencies within the state. The department does not actually conduct the training itself. Inste...