TAILIEUCHUNG - Lecture Accounting for Governmental & nonprofit entities (16/e): Chapter 4 - Jacqueline, Suzanne, Earl
Chapter 4 - Accounting for governmental operating activities - Illustrative transactions and financial statements. After studying Chapter 4, you should be able to: Analyze typical operating transactions for governmental activities and prepare appropriate journal entries at both the government-wide and fund levels, prepare adjusting entries at year-end and a pre-closing trial balance, prepare closing journal entries and year-end General Fund financial statements,. | Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements Chapter 4 McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Learning Objectives After studying Chapter 4, you should be able to: Analyze typical operating transactions for governmental activities and prepare appropriate journal entries at both the government-wide and fund levels Prepare adjusting entries at year-end and a pre-closing trial balance Prepare closing journal entries and year-end General Fund financial statements 1 Learning Objectives (Cont’d) Account for interfund and intra- and inter-activity transactions Account for transactions of a permanent fund Distinguish between exchange and nonexchange transactions, and define the classifications used for nonexchange transactions 1 Measurement focus: Governmental funds focus on the flow of current financial resources Assets include cash, receivables, marketable securities, prepaid items, and supplies inventories Liabilities include current liabilities such as accounts or vouchers payable, accrued liabilities, and deferred revenues Capital assets and noncurrent liabilities are not recorded in governmental funds, but are recorded in governmental activities at the government-wide level Basis of accounting: Modified accrual Governmental Funds 3 Dual-track approach Transactions have different effects on governmental funds and governmental activities at the government-wide level because of different measurement focuses and bases of accounting Using the dual-track approach each transaction is recorded separately in the general journals for the governmental fund and governmental activities The Dual-Track Approach 3 The budget for Clark City authorizes expenditures of $11,360,000 and forecasts revenues of $10,972,000 for FY 2014. The entry to record the budget (ignoring subsidiary detail) is: General Fund: Dr. Cr. Estimated Revenues 10,972,000 Budgetary Fund
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