Governmental Exam 2

property tax revenue

main source of revenue, billed from assessment by government, set up as a receivable (credit when received)

accruing (GF)

maybe at the end of the period. only short-term like salaries payable when the year ends before payday.

Closing J/E (GF)

1. Reverse Budget (close)
2. debit all revenue, credit all expenditures, balance with fund balance.

Financial Statements for General Fund

1. statement of Revenues, Expenditures, and change in Fund Balance.
2. Balance Sheet: includes restricted and unassigned fund balance as well as short-term assets and liabilities. (NO EQUITY)

Tax Anticipation Notes (TAN)

borrowing in anticipation of taxes

Tax Anticipation Payable

use the money and then interest, then principal

Property Taxes

recorded as revenue when billed because it meets the measurable and available requirements. (debit receivable).

Accounting for Taxes Never Collected

Allowance for Refunds and uncollectible taxes. if citizen is given a refund or some is uncollectible, debit allowance.

Allowance for Refunds and Uncollectible Taxes

like allowance for Bad Debt, contra asset to property tax receivable. adjust throughout the year(mainly year-end), increase or decrease. offset with revenue. Allowance and revenue have a negative relationship.

Allowance for Refunds and Uncollectible Taxes J/E

Property tax receivable
Allowance for Refunds and Uncollectible Taxes
Revenue-Property taxes

process if citizen does not pay taxes

1. citizen is billed
2. year end and hasn't paid, move to delinquent status (receivable).
2b. judge if it will likely be collected within 60 days. (yes=do nothing)
3. if no, defer it.
4. Tax lien

J/E, process if citizen does not pay taxes

1. property tax receivable
revenue- property tax
2. property tax receivable - delinquent
property tax receivable
3. property tax revenue
deferred property tax

deferred property tax

similar to unearned revenue. next year it will be put in revenue.

Refund

access property and owner doesn't agree with its amount, makes request (takes time), should pay taxes by due date, even if settlement is happening. if fixed after deadline, refund is issued.

Interest and Penalties after delinquent

put into an interest and penalty receivable account.

Interest and Penalties after delinquent J/E

Interest and penalties receivable
Revenue-Interest and Penalty

Tax Lien Status

lien against property tax. Government holds(owns) the land. Government will then sell the property(auctioned).

Tax Lien J/Es

tax lien receivable
property tax receivable - delinquent
Interest and Penalty receivable
Cash
tax lien receivable
expenditure- miscellaneous
V/P(goes to the owner)

Sales Tax

due on the 20th of the next month, tax on items purchased, government collects the money and then disperses it. cannot be recorded until it is collected as it isn't measurable until then.

Income Taxes

collected and recorded. cannot be recorded until collected.

grant

government uses them. typically from higher-level of government to lower-level of government. can only be used for given purpose. reverse grant when used. the advance on grant doesn't affect the fund balance as a grant should not.

Grant J/E

Cash
Advance on Grant
j/e when spent
Expenditure
Cash
Advance on Grant
Revenue-grant

Interfund Transactions-Transfers

not payed back, includes a transfer in and transfer out, temporary accounts, once transferred done. included as other in income statement. close.

transfer in

like a revenue stream

transfer out

like an expenditure

interfund transactions-loans

to be payed back. there are short -term and long term loans.

short term loans

3-9 months, balance sheet accounts
due to - like an A/P
due from - like an A/R

Long-term loans

Advance to-like an A/P
Advance from -like an A/R

Acquisition of "long-term" assets

governmental doesn't have long term assets but they do purchase "them".

Acquisition of "long-term" assets J/E

expenditure - asset
Cash

Selling of "Long-term" assets

no depreciation so no book value. if asset is disposed without selling then do nothing.

Selling of "Long-term" assets J/E

cash
other financing source - disposal (revenue stream)

closing GF

budget, actual, encumbrances

closing encumbrance J/E

BFBRFE
encumbrance
unassigned Fund Balance
restricted Fund Balance

Capital Project Fund

modified accrual, CRMF, no longterm or depreciation, different CPF for each project. funded through debt, grant, and investment income.

Capital Project Fund purpose

to acquire, purchase, or build assets.

Investments

bonds(get cash upfront) then invest it. comes into CPF but is paid through DSF.

CPF

Will carry a budget (legislative), only one appropriation, maybe a second one for architect. records bonds as other financing sources. uses encumbrance(only one).

Once contract is made (CPF)

set up encumbrance. (all bills are expenditured),
invoices paid with retainage payable
no vouchers payable
carry investments as assets.

Retainage Payable

an incentive for contractors to do a job well.

Debt Service Fund

to service debt. (principal and interest), could issue property tax, investments, only 2 expenditures (interest and principal), transfers (typically in), NO bonds payable, NO encumbrances.

Interest J/E

expenditure - interest
Matured Interest Payable
Matured Interest Payable
Cash

Principal J/E

Expenditure - Principal
Matured Serial Bonds Payable
Matured Serial Bonds Payable
Cash