TTU ACCT 5310 - The General Fund and Special Revenue Funds

Unformatted text preview:

The General Fund and Special Revenue FundsLearning ObjectivesMFBAAssumptions for this ChapterIllustrative ExamplesRecording the BudgetRecording the budgetRecording the Budget: Some comments about the entryRecording the Budget: Posting the “Out-of-Balance” amountMaking Adjustments to the BudgetAdjusting the BudgetProperty Tax LevySlide 13Slide 14Other RevenuesSlide 16Encumbrances & Related ExpendituresEncumbrances EntryEncumbrance / Expenditure EntriesSlide 20Unencumbered EntriesUnencumbered Entries: PayrollOther Transactions and EventsCollecting taxes, other receivables, and other revenuesReclassifying taxes as delinquentPaying amounts owedAn additional order has been madeCollecting delinquent taxesDelinquent Taxes: Trick QuestionTrick Question AnswerPurchase of InvestmentsInterfund transaction: Purchase of Supplies from an Internal Service FundCorrecting an errorCorrecting an error: the Other FundOrdering a transferOrdering a transfer – the Other FundStill another transferThis transfer was paid!Other ExpendituresOther PaymentsBorrowing some moneyPaying another fund (finally!)Making another collection (we need the money!)Writing off an accountRepaying the amount borrowed from the bank, plus interestSomebody made a mistakePaid it, then fixed itCombined entriesUsing the CPYE AccountYear-End AdjustmentsInterest & Penalties on Delinquent TaxesAccrued interest on investmentsAccrued interest on short-term debtClosing Entry ProcessClosing Entry Process (continued)Reverse the BudgetClose the ActualClose the Other Operating AccountsClose the Encumbrances AccountGeneral Fund Financial StatementsBalance SheetReserves of Fund BalanceUnreserved Fund BalanceStatement of Revenues, Expenditures, & Changes in Fund BalanceOperating Statement FormatStrange ThingsThe Budgetary Schedule / StatementAdditional Financial StatementsSample Financial StatementsEntries Early in Next Fiscal YearThe General Fund and Special Revenue FundsChapter 4Learning ObjectivesDiscuss similarities & differences between GF and SRFsExplain MFBA used for these fundsUnderstand and prepare budgetary entriesAnalyze common journal entries for transactions, including interfund activityUnderstand use & accounting for encumbrancesPrepare adjusting & closing entriesDefine special items and extraordinary itemsPrepare GF and SRF financial statementsMFBAMeasurement Focus (MF) is on current financial resources – what is expendableBasis of Accounting (BA) is modified accrual – recognition occurs forRevenues when measurable & availableExpenditures when underlying liability is incurred, except for long-term debt principal and interest payments (when due)Assumptions for this ChapterGAAP used as the budgetary basisAccounts maintained on GAAP basis during the yearBoth assumptions rarely hold in practice, but they make instruction easier and more uniformIllustrative ExamplesRecording budgetProperty tax levyOther revenuesEncumbrances & related expendituresOther transactions and eventsYear-end adjustments & closing entriesFinancial statementsRecording the BudgetGenerally, the first entry of the yearNext entry will be reversing of some closing entries done at the end of the previous year (more on those later)Budget entry marks the end of a long processShown here in summary form – could be in two entriesMay be modified later as circumstances warrantRecording the budgetEstimated RevenuesAppropriationsUnreserved Fund Balance427,000423,0004,000Recording the Budget:Some comments about the entryThe entries to Estimated Revenues and Appropriations are fairly standardThere is some dispute on where to put the difference when the budget doesn’t balanceRecording the Budget:Posting the “Out-of-Balance” amountThis textbook uses Unreserved Fund BalanceAdvantage – easierDisadvantage – implies there are spendable resources when, in fact, there aren’tAnother textbook uses Fund Balance – same problems as aboveThird textbook uses Budgetary Fund Balance – avoids disadvantage from above but adds another accountJust be aware that there are options in practiceMaking Adjustments to the BudgetAssuming balanced budget is maintained, increase in one functions appropriation requires decrease in anotherUnbalanced adjustmentsIncrease (decrease) in Appropriations (Estimated Revenues) requires Unreserved Fund Balance to decreaseDecrease (increase) in Appropriations (Estimated Revenues) requires Unreserved Fund Balance to increaseAdjusting the BudgetEstimated RevenuesAppropriationsAppropriationsUnreserved Fund Balance4,0003,0006,0001,000Some are bothered by having the Appropriations account being both a debit and a credit. However, you must consider the subsidiary ledger effects demonstrated in the textbook. Some appropriations were increased; others were decreased. That is why both the debit and credit are required.Property Tax LevyOften the major source of revenue for many governmentsEntry is recorded at time of levy – revenue earned at that pointProperty Tax LevyTaxes Receivable – CurrentAllowance for UncollectibleCurrent TaxesRevenues – Property Taxes200,0003,000197,000Property Tax LevyNotice use of allowance account in entryNo bad debts expense – remember, a governmental fund does not use expensesRecords revenue at the amount government expects to collectThis form of entry assumes net amount will be available – other options discussed in Chapter 5Other RevenuesSome revenues will be accrued when services are providedOther revenues may be recognized only when cash is received – no allowance necessary since all of revenue receivedOther RevenuesAccrued revenues:Accounts ReceivableAllowance for UncollectibleAccounts ReceivableRevenues36,0001,00035,000Cash revenues:CashRevenues500500Encumbrances & Related ExpendituresEncumbrancesUsed to assist in controlling expenditures until orders are receivedStrictly a budgetary accountCorresponding credit is to another budgetary account: Reserve for EncumbrancesAmount recorded may be actual or estimated amountEncumbrances EntryEncumbrancesReserve for Encumbrances30,00030,000When the supplies that were ordered are actually received, the amount may be different.Encumbrance / Expenditure EntriesReverse the estimate:Reserve for EncumbrancesEncumbrances30,00030,000Record the actual:ExpendituresVouchers Payable29,90029,900Encumbrance / Expenditure


View Full Document

TTU ACCT 5310 - The General Fund and Special Revenue Funds

Download The General Fund and Special Revenue Funds
Our administrator received your request to download this document. We will send you the file to your email shortly.
Loading Unlocking...
Login

Join to view The General Fund and Special Revenue Funds and access 3M+ class-specific study document.

or
We will never post anything without your permission.
Don't have an account?
Sign Up

Join to view The General Fund and Special Revenue Funds 2 2 and access 3M+ class-specific study document.

or

By creating an account you agree to our Privacy Policy and Terms Of Use

Already a member?