Accounting

Q2. Which standard-setting bodies have reasonability for establishing accounting and report standards for the following
State and local Governments
Ans Governmental  Governmental Accounting Standards Board (GASB)
Business Organizations
Ans Financial Accounting Standards Board (FASB)
Not-for-profit organizations
Ans Governmental  Governmental Accounting Standards Board (GASB)
Nongovernmental - Financial Accounting Standards Board (FASB)
The federal government, its agencies and its departments
Ans Federal Accounting Standards Advisory Board (FASAB)

Q4. Explain how the GASBS 34 reporting model meets financial report users needs for operational accountability information about governmental activities.
To meet the financial report users need for operational accountability information about governmental activities, GASBS 34 reporting model requires governmental funds to prepare a Managements Discussion and Analysis (MDA) and two government wide financial statements, namely
Statement of net assets or a balance sheet (also referred to as statement of financial position)
Statement of activities (an operating statement)
GASBS 34 require both government wide financial statements and fund financial statements.

Q6. Which expenditure of a capital projects fund should be capitalized to Construction Work in Progress Is Construction Work in Progress included in the chart of accounts of a capital projects fund If not, where would it be found
Construction expenditures under a capital project fund shall be capitalized to Capital Work in Progress (CWIP).
CWIP is not included in the chart of accounts of a CPF rather it would be found under Governmental activities in governmental funds.

Q7. Explain the essential differences between regular serial bonds and term bonds and how debt service fund accounting differs for the two types of bonds.

Differences are as below
Regular serial bondsTerm bondsMaturity of the principal is in annual installmentsMaturity of the principal is at the end of the term of the bond in one lump-sum amount.Approximates the total resources(budgeted revenues or inter-fund transfers) raised each year with the debt service requirements, thus keeping the investments to a minimumDo not approximate the total resources with debt service requirements, rather they are budgeted to meet the sinking fund requirements and interest payments for the year.They are self amortizing, hence they do not require a sinking fund to be created.They require creating of a sinking fund.Management of investment and accounting for serial bonds is simple.Management of investment and accounting for term bonds is complex.

Debt service fund accounting is different from the above 2 types of bond as
Accounting is based on accrual method.

Both matured principal and interest on the amount of debt is usually recognized in the period due.
It focuses on the current financial resources.