What does governmental funds mean on the CPA exam?
Governmental funds. The funds that account for tax-supported activity, reported on the modified accrual basis with a current financial resources focus.
Defined against GASB 34.
Which CPA exam sections use governmental funds?
Governmental funds appears in the FAR section of the CPA exam.
Other terms defined against GASB 34
- capital assets: In GOVERNMENTAL reporting, long-lived assets such as land, buildings and infrastructure.
- enterprise fund: A proprietary fund used where a government charges outside users for goods or services, run on the full accrual basis like a business.
- full accrual: Recognizing revenue when earned and expense when incurred, and reporting every asset and liability including long-term ones.
- governmental activities: The part of a government's operations financed mainly by taxes rather than by fees, reported on the government-wide statements on the full accrual basis.
- internal service fund: A proprietary fund that supplies goods or services to other parts of the same government on a cost-reimbursement basis, such as a motor pool.
- management's discussion and analysis: A narrative overview management provides ahead of the financial statements.
- modified accrual: The basis for governmental fund statements: revenue when measurable and available, expenditure when the liability is incurred.
- required supplementary information: Schedules a government must present outside the basic statements, such as budgetary comparisons and pension trend data.
Related terms
- basis of accounting: The rule for WHEN something is recorded: cash when money moves, accrual when it is earned or incurred, modified accrual somewhere between.
- component unit: A legally separate organization for which the primary government is financially accountable.
- statement of cash flows: The statement that explains the change in cash by sorting it into operating, investing and financing activity.
- operating segment: A component of a public entity that may recognize revenues and incur expenses, whose operating results the chief operating decision maker reviews to allocate resources and assess performance, and for which discrete financial information is available.
- accumulated earnings and profits: The C corporation earnings and profits an S corporation carries into S status.