Government Accounting Exam (Final)
Government Accounting Exam (Final) V246
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This 4 page Study Guide was uploaded by David Schell on Monday April 4, 2016. The Study Guide belongs to V246 at Indiana University taught by Antonette McCaster in Spring 2016. Since its upload, it has received 78 views. For similar materials see Elementary Government and Non-Profit Financial Accounting in Linguistics and Speech Pathology at Indiana University.
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Date Created: 04/04/16
Final Exam Study Guide for Government Accounting How to Calculate Tax Rate (Also referred to as millage rate) Amount to be Collected 750,000 Estimate of Uncollectible Funds 4% Required Tax Levy (Yellow/(1-Green) 781,250 Total Assessed Value of Property 40,000,000 Subtract: Property Not Taxable 5,000,000 Taxable Property 35,000,000 Subtract: Exemptions* 2,000,000 Net Assessed Value of Property 33,000,000 Tax Rate (Millage Rate) is Blue/Purple $2.37/ every $100 worth of property** Question that will be on the test: What is the tax burden of a person who owns property worth $275,000? Answer: $6,517.50 Reason: $275,000 x .0237 Which is the property value multiplied by the tax rate *Exemptions: on the test they might have these broken up into different categories such as first homes, veterans, elderly etc. ** The Blue/Purple calculation would give you .0237 but we multiply by $100 to get the tax rate. Note: .0237 is where the number came from for the answer to the question Sample Multiple Choice Question with Reasoning: 1. What type of fund would fines or forfeitures be classified in? Answer: Governmental General Fund Reason: Fines and forfeitures are in place for general governmental operations and are not designated to a specified fund. 2. What type of fund would escheat property be classified in? Answer: Fiduciary Fund Reason: Escheat property is property held by the government and given to the legal heir of the property when they claim it. 3. True/False Property taxes collected within 60 days of the deadline would be considered current. Answer: True Anything collected after that is not shown on the current accounting records. 4. What type of fund would building a road with designated funds be classified in? Answer: Governmental Capital Projects Reason: Building a road would be from the general fund BUT the problem says that funds are being used that are designated specifically for it. 5. What type of fund would a special tax for hotels be classified in? Answer: Governmental Special Revenue Reason: Special revenue is used easy to distinguish because it’s a special tax for a purpose. 6. What type of fund would be used to pay long-term debt? Answer: Governmental Debt Service Fund Reason: Long term debt is always paid out of the debt service fund and there and no exceptions. How to Close Entries *Note: The only accounts that need to be closed are revenues and expenditures for both budgetary and actual entries. Pre-Closing Entries Expenditures- salaries 2050 Expenditures-services 6000 Expenditures- supplies 1000 Revenues-sales tax 5000 Revenues-property tax 2000 Revenues- fines and forfeitures 50 Revenues- federal grant 1000 Revenues- state grants 1000 Total 9050 9050 Closing Entries Revenues-sales tax 5000 Revenues-property tax 2000 Revenues- fines and forfeitures 50 Revenues- federal grant 1000 Revenues- state grants 1000 Expenditures- salaries 2050 Expenditures-services 6000 Expenditures- supplies 1000 Total 9050 9050 Some Things to Keep in Mind: -Do not panic. -All you are doing is taking the given preclosing entries and reversing them. -Revenues will always be credits in preclosing entries which means debit in closing entries. -Expenditures will always be debits in precloing entries which means credit in the closing entry. - Why do we do this? Revenue and expenditures will be different every year. Hence, close accounts to make them have a zero beginning balance in preparation for the next year. Balance Sheet Tips 1. We will be given a trial balance. 2. What does a trial balance mean? a. It means you will be given ASSETS first and LIABILITIES follow and then a Fund Balance. 3. Assets are any type of cash or receivable and NOT revenues or transfers. a. Note: only capital assets are recorded. (capital means money, i.e. not inventory) 4. Any transfers are placed in other financing resources and NOT revenues. 5. Assets = Liabilities + Fund balance for the balance sheet. 6. Make sure you find the changes in fund balance (similar to “net income”) and put it on your balance sheet with fund balance changes
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