Governmental and Not-for-Profit Accounting

1) Chapter 3
a) What are the operating statements accounts? When to use what accounts to record
transactions? How to make closing entry about these operating statements accounts?
b) What are the budgetary accounts? How to make journal entries about the adoption of
budget? The closing entry for the budget (this is in chapter 4 but is related here)?
c) When to make entries about encumbrances and how? How to make entries when goods
ordered previously are received? At what amount?
d) How to calculate the amount of available appropriation?
e) What should be included in budgetary comparison schedule? Actual amount is stated at
what basis? How does one determine the variance?
2) Chapter 4
a) Property taxes
i) What amount should be recognized as property taxes revenues in governmental funds?
In government-wide F/S? Do you remember what it means by modified accrual basis
when it comes to property taxes revenue?
b) Operating grant: when should we recognize as revenue under different types of restrictions
(eligibility or time)
c) Accounting for inventory: purchase method versus consumption method. Do you know
their differences?
d) How to account for acquisition of long-lived assets in governmental funds? At governmentwide level?
e) How to account for disposition of long-lived assets in governmental funds? At governmentwide level?
f) How to account for different interfund activity at fund level? At government-wide level?
g) What are the categories of fund balance and when to use what?
3) Chapter 5
a) What are general capital assets? Do we take depreciation on general capital assets? How
about infrastructure assets using modified approach?
b) Capital projects fund
i) What are the typical entries made in a capital projects fund?
ii) How to make entries about the amount spent on a construction project in a capital
projects fund versus at the government-wide level?
iii) How about the journal entries for the proceeds of bond issuances in a capital projects
fund versus at the government-wide level? (Try to study this one along with debt service
fund in chapter 6)2
iv) Special assessments: when can we account for special assessments in capital projects
fund plus debt service fund? In an agency fund?
4) Chapter 6
a) What are general long-term liabilities? How to account for them in a governmental fund? In
the governmental activities at the government-wide level?
b) What is overlapping debt? Debt margin? How to calculate the amount of legal debt margin?
How to calculate the amount of overlapping debt?
c) Debt service fund
i) What are the typical entries made in a debt service fund?
ii) How to account for interest expenditure on long-term debt in a debt service fund versus
interest expense at the government-wide level? Remember the difference!
iii) How to record the payment of principal in a debt service fund versus at the governmentwide level?
5) Chapter 7
a) What are the required financial statements for proprietary funds?
b) How to prepare statement of cash flows? What activities are reported? Cash flows from
operating activities are reported under method? What are classified as capital and related
financing activities? Noncapital and related financing activities? Operating activities?
Investing activities?
c) What are the categories of net position? How to calculate each of them individually?
d) When to recognize accrued utility revenue in a water utility fund?
6) Chapter 8
a) What funds are considered as fiduciary funds?
b) How to report fiduciary activities on fund financial statements? On government-wide
financial statements?
c) Required financial statements for agency fund and trust funds
d) Journal entries about tax agency fund: How to account for collection fee?
e) Journal entries about investment trust funds: how to account for earnings? Changes in fair
value? Allocation of earnings and changes in fair value? Withdrawal of participants? How
to prepare a statement of fiduciary net position?
f) Employer’s pension accounting: which fund reports pension expenditure? Pension expense?
How to determine the amount?
7) Chapter 9
a) How to define fiscal independence? Financial accountability?
b) When will a potential component unit be included in a reporting entity? How to determine
which format (discrete presented versus blended) to report? In which set of financial
statement does one present it as blended? As discrete presented?
c) What are the three sections of a comprehensive annual financial report (CAFR)?3
d) How do the minimum requirements for general purpose external financial reporting relate in
scope to the CAFR?
e) What items would be included in reconciling the governmental funds balance sheet to the
statement of net position and how?
f) How to determine the amount of net positon — net investment in capital assets?
8) Chapter 13
a) What are the required financial statements for all not-for-profit organizations? For a
VWHO? What are included in each financial statement and what are the format of financial
b) What are the three classes of net assets? When to record into each individual net asset?
c) How to make journal entries about contributions? Unconditional promises? Conditional
promises? Contributed services? Depreciation expenses? Make sure you know which net
assets classification to put in.
d) What are the conditions that contributed services can be recorded as revenue and expense?
e) How to report expense?
f) What are the criteria to check whether a joint cost should be allocated between a program
expense and a funding-raising expense?
g) At what amount does a NFPO report investment? What if there is a donor restriction on
how to spend the increase in fair value?
h) When a recipient NFPO serves as an intermediary between donor and a beneficiary, under
what conditions would it recognize the contribution as a liability? As revenues?
9) Chapter 16
a) How to derive net patient service revenues? If there is a contractual adjustment, how does it
affect patient service revenues? How about if there is a charity service? An estimated bad
b) How to account for capitation fee revenue?