GNP Exam 2 Review

Chapters: 5, 6, 7, & 8
70 questions (10 math)
Chapter 5
- Governmental Revenue Categories: property tax, fines, penalties,
permits, interest, grants (intergovernmental)
- Transfers: other financing sources and uses NOT Revenue
- Revenue v. Other Financing source (transfers, sale of fixed
assets, proceeds from issuance of LT debt)
- GASB: definition of what revenue is (slide 3)
- 3 rules of when we can recognize revenue
o Available
o Legally usable
o Measurable
- GASB 33: 4 non exchange transactions
o Derived tax revenues: sales tax
o Imposed tax revenues
o Government mandated
o Voluntary transaction
- Property Tax Process
- Grants Revenue Recognition: Expenditure Driven v. Unrestricted
- How much is the property tax revenue we have to record in a
current year
- Not doing much with FMV: High Level of what we carry at cost:
things without ready available market value
Chapter 6
-

Exception for 30 day window for expenditures: debt service

maturing in 30 days within year end, can be backdated to
current year.
Expenditures Timing: when they are due, when they are used,
when they are acquired.
How we account for compensated absence: if employee is
entitled to be paid out following termination then we have a
liability.
Consumption Method (Purchases Method)- inventory things we
considered prepaid
FAS 5: claims and judgment- at what point in time do you have to
recognize a contingent liability
How to record a capital lease

Chapter 7/8

When we are required to use these funds- legally bound (bond

issuance)
CPF: track the life cycle of the construction of a large capital
project (usually take multiple years)
Type of financial statements that must be provided
(governmental funds)
o Cash flow statement not required but have to have
supplementary statements to track budgeted and actuals
CPF: life cycle birth to death
CPF result out of a debt issuanceBond Anticipation Notes- ST
liabilities (fund liability)
o Exception: To be treated as LT Liability: BAN must be a part
of big bond issuance that has already been approved and
the proceeds of the big bond will be used to pay off the
BAN
o Positives: shift proceeds to other financing source. Better
financial presentation
How we record transactions: premiums v. discount
Arbitrage: what it is, why, what we watch for, penalties
Terminology of DSF: when required legally mandated by
funding document, accumulating financial resources to service
debt down the line
What a general obligation debt, revenue debt, double barrel
Refunding issues refinancing debt, better interest rates,
payment terms, debt covenants.
Defeasance: retirement of the debt.
o Legal: steps outlined in debt instrument
o In-substance: not specific steps, but we did in a similar,
acceptable manor.
o Non-defeasance: didnt follow steps that were outlined
penalty: keep old and new debt on books.
Focus: Revenues and Expenditures