All details are on file attached

Due in 5 hours 

This is an rush assignment 

Money will be asked to refund if finished after 

ACC407/5407 – Governmental Accounting – William A. Morehead

Exam 1 – Discussion – Due, February 18, 2020 – NAME ___________________________

Discussion Questions – EVERYONE must answer discussion questions 1 and 2; AND, any 2 of

the questions 3-6; please type your responses in a Word document and upload in Connect by

11:59 p.m. on February 18, 2020 (worth 8 points each):

REQUIRED:

1. The Board of Aldermen of Clinton have estimated revenues of $17.6 million and estimated
appropriations of $16.9 million. The Board has adopted the following budget for its General

Fund for the year ending September 30, 2020.

Taxes $13,600,000

Licenses and Permits 2,100,000

Intergovernmental Revenues 800,000

Charges for Services 500,000

Fines and Forfeits 300,000

Miscellaneous Revenues 300,000

Total Estimated Revenues $17,600,000

General Government $5,700,000

Public Safety 4,900,000

Public Works 2,300,000

Health and Welfare 1,600,000

Culture and Recreation 1,300,000

Contributions to State Retirement

Fund (PERS)

1,100,000

Total General Fund Appropriations $16,900,000

a. Explain the legal significance of an appropriation and why auditors engaged for a

financial and compliance audit need to know the meaning of the term.

b. Describe whether it is illegal for a government to spend money for any purpose

unless a valid appropriation and allocation for that purpose exists (be specific in your

reasoning).

c. Does a legally approved budget assure good financial management for each

government? Why or why not?

d. Provide the entries in general journal form to initially record the budget in the

general ledger and subsidiary ledger accounts.

REQUIRED:

2. Discuss the following:
a. Describe the difference between the economic resources measurement focus and the

current financial resources measurement focus,

b. Describe the difference between measurement focus and basis of accounting.
c. Outline revenue and expenditure recognition criteria in modified accrual; cite key

differences between modified accrual and accrual accounting.

d. For the following, describe the activities of a state and local government
1. governmental activities
2. business-type activities
3. fiduciary-type activities

For each of these three activities above:

1. List each type of fund within each activities statement
2. Indicate the measurement focus basis of accounting for each fund and

each of these activities

CHOOSE ANY TWO of the following in questions 3 – 6:

3. Describe how the cash flow statement of an enterprise fund differs in format from the cash
flow statements of a private sector organizations such as a commercial business. What is

the purpose of each section of the Statement of Cash Flows in an enterprise fund?

4. Define the term “Expenditure.” Distinguish an “expenditure” from each of the following
terms in “a.” through “e.”

a. Appropriation
b. Expense
c. Disbursement
d. Encumbrance
e. Other financing use

5. Answer the following:
a. Describe the difference between exchange and non-exchange

transactions

b. Discuss the four eligibility requirements for revenue recognition in non-exchange

transactions

c. List the four categories of non-exchange transactions, give an example of each,
and discuss the asset and revenue recognition criteria for each.

6. Using GASB rules for the financial reporting entity, answer each of the following:
a. Define the financial reporting entity
b. Define and give an example of a primary government
c. Define and give an example of a component unit
d. Define and describe the two methods of reporting the primary government and

component units in the financial reporting entity