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Learning Objectives - Introductory Governmental Accounting, Part I
Part I: Lesson 1 - Basic Accounting Theory
Accounting professionals and paraprofessionals need a thorough understanding of the fundamental concepts of accounting theory in order to appropriately record governmental accounting transactions. This first chapter provides knowledge of those basic accounting concepts through the accounting equation and how transactions affect that accounting equation.
Learning Objectives:
1. Explain and understand the terms "economic condition" and "financial position".
2. Understand the basic accounting equation.
3. Identify asset and liability accounts.
4. Understand the relationship between the balance sheet/statement of net assets and the operating statement.
5. Explain how different transactions affect fund equity.
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Part I: Lesson 2 - The Chart of Accounts
The first step in setting up an accounting system is to decide what you need to keep track of. The chart of accounts is what fuels the accounting system and ultimately drives your financial statements. This module defines how charts of accounts are used in accounting systems and provides practice in using a chart of accounts for recording transactions.
Learning Objectives:
1. Explain the architecture of a governmental chart of accounts.
2. Identify asset, liability, equity, revenue, expenditure, and expense accounts within a chart of accounts.
3. Assign account numbers to funds and accounts in recording transactions.
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Part I: Lesson 3 - Double Entry Accounting
Accounting systems are designed to record transactions through the use of "debits" and "credits". The primary purpose of this chapter is to explain the relationship of increases or decreases to accounts and the accounting terms "debits" and "credits." This chapter provides the basics of how accountants should record transactions.
Learning Objectives:
1. Record transactions using debits and credits.
2. Understand how debits and credits affect accounts.
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Part I: Lesson 4 - Accounting Systems and Records
An integral part of governmental accounting is to understand how transactions flow through the accounting records and systems. Organized methods are necessary for a government to utilize the accounting process properly and accurately. These methods are reflected in part by the type of accounting records used. In order to heighten your understanding of the accounting process and the relevancy of certain types of accounting records and reports, we will describe within this chapter how a traditional (manual) system functions and then discuss the facets of a computerized system.
Learning Objectives:
1. Understand the difference between journals and ledgers.
2. Relate the journals and ledgers illustrated in this lesson to computer records.
3. Understand how governments take information from journals and summarize it in ledgers.
4. Be aware of the value and purposes of a trial balance.
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Part I: Lesson 5 - Fund Accounting
The use of funds is one of the unique characteristics of accounting systems in governments. Governments account for and allocate resources in separate sub-entities, identified as funds, based upon the purposes for which they are to be expended and the means by which spending activities are legally controlled. This lesson explains the categories of funds and the generic funds within each category. Understanding fund accounting is essential for governmental accountants and accounting paraprofessionals.
Learning Objectives:
1. Define the three categories of funds and the eleven generic funds within the three categories.
2. Determine when to use each generic fund.
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Part I: Lesson 6 - The Basis of Accounting
The basis of accounting governs the time at which the accounting system recognizes transactions. In order to record transactions at the proper time, knowledge of what basis of accounting is used by different funds is essential to the governmental accountant and accounting paraprofessional. This lesson defines "basis of accounting" and explains when to recognize revenues and expenditures/expenses within the three categories of funds.
Learning Objectives:
1. Define the phrase "basis of accounting".
2. Contrast the three common bases of accounting.
3. Understand when to recognize a revenue under the modified accrual basis of accounting.
4. Understand when to recognize an expenditure under the modified accrual basis of accounting
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Part I: Lesson 7 - Payroll and Benefits Accounting
For most governments, whether state or local, employee salaries and benefits are the single largest costs. This lesson provides an overview of the payroll process from recording time worked to recording the payroll.
Learning Objectives:
1. Understand how employee earnings are determined.
2. Distinguish between a gross payroll and an adjusted gross payroll.
3. Define the various types of payroll deductions.
4. Record the payroll.
5. Record the government's share of employee benefits.
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Part I: Lesson 8 - Accounting for Interfund Transactions
Transactions that occur between funds of the same government are known as interfund transactions. Governmental accountants and accounting paraprofessionals need to know the differences between the types of interfund transactions and how to record the different interfund transactions.
Learning Objectives:
1. Understand the difference between interfund loans and interfund transfers.
2. Record interfund loans and interfund transfers.
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Part I: Lesson 9 - Adjusting and Closing the General Ledger
At the close of each year, whether fiscal or calendar, certain events must occur within the accounting system. This lesson explains those events in terms of what accounts should possibly be adjusted and the reasons for making adjustments in the accounting system. The closing process for the general ledger is also discussed.
Learning Objectives:
1. Understand why adjusting journal entries are required.
2. Record adjusting and closing entries.
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Part I: Lesson 10 - Practice Exercise: The Case Study
One of the more effective methods used in order to understand accounting is to actually record the transactions. This practice exercise presents different types of daily, ordinary, governmental accounting transactions to record. You will select the accounts needed to record the transaction and will decide whether to "debit" or "credit" the account, receiving instant notification if the transaction is not recorded correctly. This study provides a determination of whether you have grasped most of the concepts discussed in the course.
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Learning Objectives - Introductory Governmental Accounting, Part II
The Online Lessons:
1. Financial Statements of Position
2. Operating Statements
3. Fund Accounting
4. The Basis of Accounting
5. Accounting for Interfund Activities
6. Accounting for Encumbrances
7. Revenue and Receipt Accounting
8. Expenditure and Disbursement Accounting
9. Practice Exercise: The Case Study
Part II: Lesson 1 - Financial Statements of Position
One goal of accounting is to prepare various financial statements. This lesson focuses on the statement of position for each of the categories of funds -- governmental, proprietary, and fiduciary. In addition, this lesson provides a review of the basic accounting equation, illustrates the different categories of accounts, and discusses what information is selected for presentation in various fund-level statements of position.
Learning Objectives:
1. Identify asset, liability and equity accounts.
2. Understand the form and content of a governmental fund balance sheet.
3. Understand the form and content of a proprietary fund statement of net assets.
4. Understand the form and content of a fiduciary fund statement of net assets.
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Part II: Lesson 2 - Operating Statements
This lesson provides the basics of accounting theory applicable to fund-level operating statements for each of the three categories of funds -- governmental, proprietary, and fiduciary. You will learn what goes on the operating statement of each category of funds. In addition, you will learn why the content of the operating statements differs between governmental and proprietary funds.
Learning Objectives:
1. Understanding operating statement terminology related to fund-level financial statements.
2. Understand the content of a governmental fund's operating statement.
3. Understand the content of a proprietary fund's operating statement.
4. Understand the content of a fiduciary fund's operating statement.
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Part II: Lesson 3 - Fund Accounting
The use of funds is one of the unique characteristics of accounting systems in governments. Governments account for and allocate resources in separate sub-entities, identified as funds, based upon the purposes for which they are to be expended and the means by which spending activities are legally controlled. This lesson explains the categories of funds and the generic funds within each category. Understanding fund accounting is essential for governmental accountants and accounting paraprofessionals.
Learning Objectives:
1. Define each of the fund categories and generic fund types. 2. Determine when to use each of the generic fund types.
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Part II: Lesson 4 - The Basis of Accounting
The basis of accounting governs the time at which the accounting system recognizes transactions. In order to record transactions at the proper time, knowledge of what basis of accounting is used by different funds is essential to the governmental accountant and accounting paraprofessional. This lesson defines "basis of accounting" and explains when to recognize revenues and expenditures/expenses within the three categories of funds. You will also learn how to calculate revenues and expenditures/expenses using the modified accrual and accrual basis of accounting.
Learning Objectives:
1. Contrast the three common bases of accounting.
2. Understand when to recognize revenue under the modified accrual basis of accounting.
3. Understand when to recognize expenditures under the modified accrual basis of accounting.
4. Calculate revenues and expenditures/expenses using the accepted bases.
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Part II: Lesson 5 - Accounting for Interfund Activities
Transactions that occur between funds of the same government are known as interfund transactions. Governmental accountants and accounting paraprofessionals need to know the differences between the types of interfund transactions and how to record the different interfund transactions. This lesson discusses the differences between interfund loans, interfund transfers and interfund services provided and used.
Learning Objectives:
1. Understand the differences between interfund loans, interfund transfers and interfund services provided and used. 2. Record interfund loans, interfund transfers and "arms length" transactions.
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Part II: Lesson 6 - Accounting for Encumbrances
Governments use encumbrances to control spending and to enhance cash management. Governmental accountants and accounting paraprofessionals should know why encumbrances are important in a governmental environment and how encumbrances relate to the budget. You will how to define an encumbrance and how governments account for encumbrances. In addition, you will also learn how encumbrances are reported in a government's external financial statements.
Learning Objectives:
1. Understand the Generally Accepted Accounting Principles (GAAP) basis of accounting for encumbrances.
2. Understand the statutory basis of accounting for encumbrances.
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Part II: Lesson 7 - Revenue and Receipt Accounting at the Fund Level
Governmental accountants and paraprofessionals must be able to record revenue and receipts properly for reporting in financial statements. This lesson provides guidance on the recording of revenues and receipts required by GAAP.
Learning Objectives:
1. Understand the basic tenets associated with revenues and receipts.
2. Explain the revenue recognition rules for a government's primary revenue stream.
3. Demonstrate how to record revenues and receipts into an accounting system.
4. Understand adjusting and closing revenue journal entries.
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Part II: Lesson 8 - Expenditure and Disbursement Accounting
This lesson provides guidance on the recording of expenditures and disbursement required by GAAP. Governmental accountants and paraprofessionals must be able to properly record expenditures and disbursements in their financial statements.
Learning Objectives:
1. Understand the basic tenets associated with expenditures and disbursements.
2. Understand the value of an expenditure and disbursement journal.
3. Describe the content of the expenditure subsidiary ledgers.
4. Understand the closing expenditure/expense journal entries.
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Part II: Lesson 9 - Practical Exercise: The Case Study
The purpose of this practice exercise is to demonstrate how certain accounting concepts and GAAP (generally accepted accounting principles) apply in an accounting and reporting system for a small government. You will be required to apply the concepts learned in each lesson of this course through the recording of accounting transactions. You will select the accounts needed to record the transaction from the chart of accounts and will decide whether to "debit" or "credit" the account, receiving instant notification if the transaction is properly recorded, allowing you to move to the next transaction.
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Learning Objectives - Intermediate Governmental Accounting
The Online Lessons:
1. The Governmental Financial Reporting Environment
2. Principles of Accounting and Financial Reporting for State and Local Governments
3. Governmental Funds
4. Proprietary Funds
5. Fiduciary Funds
6. Financial Reporting and Budgets
7. The Reporting Entity
8. External Financial Reporting
9. Reconciliation - Fund to Government-Wide
10. Practice Exercise: Reconciliation of Fund Balance to Net Assets
11. Practice Exercise: Statement of Activities - Governmental Activities
12. Current Events
Intermediate: Lesson 1 - The Governmental Financial Reporting Environment
This lesson will give you an overview of financial reporting for governmental organizations. After completing this course, you will gain detailed practical knowledge of accounting and financial reporting in governments.
Learning Objectives:
1. Define the term "governmental accounting."
2. Define what constitutes a government.
3. Summarize the similarities and differences between accounting for governmental organizations and business organizations.
4. Describe the relationship between a governmental organization and the source of financial reporting standard.
5. Explain the importance of accountability and interperiod equity in governmental financial reporting.
6. Explain who the intended users are of external governmental financial reports.
7. Identify uses of the external governmental financial reports by the intended user groups.
8. Discuss the characteristics of meaningful and effective information in external financial reports.
9. Explain how the objectives of financial reporting, as identified in Governmental Accounting Standards Board (GASB) Concepts Statement No. 1, are reflected in a government's external financial reports.
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Intermediate: Lesson 2 - Principles of Accounting and Financial Reporting for State and Local Governments
This lesson will increase your awareness of the most common accounting and financial reporting differences of the fund categories.
Learning Objectives:
1. Define "fund."
2. Identify and categorize types of funds.
3. Explain the "minimum number of funds concept."
4. Define "major funds."
5. Explain why the major funds concept is important to governmental financial reporting.
6. Calculate major funds.
7. Define "basis of accounting" and "measurement focus."
8. Identify the key differences between the bases of accounting and the measurement foci used by the fund categories.
9. Be aware of how the key differences between the bases of accounting and the measurement focus affect governmental financial statements.
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Intermediate: Lesson 3 - Governmental Funds
This lesson examines the general rules governing government accounting and financial reporting for governmental funds and how those rules apply in a number of specific situations regularly reported in the activities of governmental funds. Learning Objectives:
1. Identify exchange and nonexchange revenues reported in governmental funds.
2. Determine what is classified as an "other financing source."
3. Examine the more common asset reporting requirements for governmental funds.
4. Explain expenditure recognition requirements for governmental funds.
5. Determine what is classified as an "other financing use."
6. Examine the more common liability reporting requirements for governmental funds.
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Intermediate: Lesson 4 - Proprietary Funds
This lesson examines the general rules governing accounting and financial reporting for proprietary funds and how those rules apply in a number of specific situations regularly reported in a government's activities.
Learning Objectives:
1. Identify who the customers are in enterprise and internal service funds.
2. Examine how enterprise funds and internal service funds recover the costs of their activities.
3. Identify what accounting pronouncements enterprise funds and internal service funds are required to follow.
4. Explain financial reporting requirements in fund financial statements for enterprise funds and internal service funds.
5. Examine specific guidance as relates for tap fees and connection fees, debt refundings, and customer deposits in enterprise and internal service funds.
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Intermediate: Lesson 5 - Fiduciary Funds
This lesson examines the general rules governing accounting and financial reporting for fiduciary funds and how those rules apply in a number of specific situations regularly reported in a government's activities.
Learning Objectives:
1. Identify the funds that belong in the "Fiduciary Funds" category.
2. Explain the difference between fiduciary responsibility and fiduciary funds.
3. Examine the purpose and characteristics of each of the funds within the fiduciary category.
4. Explain special accounting issues of each of the fund types within the fiduciary category.
5. Identify the financial reporting requirements required for each of the fund types within the fiduciary category.
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Intermediate: Lesson 6 - Financial Reporting and Budgets
This lesson examines the budgetary reporting requirements in governmental financial reports.
Learning Objectives:
1. Understand the role of the budget as defined by GASB Concepts Statement No. 1.
2. Explain how service efforts and accomplishments are related to budgeting.
3. Identify different types of budgets used by governments.
4. Determine which funds adopt budgets and the types of budgets adopted.
5. Explain the differences between generally accepted accounting principles (GAAP) and budgetary basis of accounting.
6. Define budgetary control and why budgetary integration is important.
7. Examine the financial reporting requirements for presenting budget information in a government's external financial statements.
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Intermediate: Lesson 7 - The Reporting Entity
This lesson examines who/what makes up the reporting entity and why some legally separate organizations are included and some are excluded.
Learning Objectives:
1. Identify the official pronouncements containing guidance for the reporting entity.
2. Discuss the notion of how financial accountability extends to the reporting entity.
3. Define the reporting entity.
4. Identify what constitutes a primary government and component units.
5. Determine how the primary government and component units are to be presented in external financial statements.
6. Determine through the use of "mini" case studies if different organizations would be included in the reporting entity and how each would be presented in external financial statements.
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Intermediate: Lesson 8 - External Financial Reporting
This lesson examines the required financial components of GASBS No. 34. In addition, the sections of a comprehensive annual financial report (CAFR) are reviewed.
Learning Objectives:
1. Examine the sections of the comprehensive annual financial report (CAFR).
2. Identify the minimum required financial statement components under generally accepted accounting principles (GAAP).
3. Understand the difference between basic financial statements and supplementary information, whether required or optional.
4. Examine the required content of management's discussion and analysis (MD&A).
5. Review the audited financial statements of the State of Georgia as an example of a CAFR.
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Intermediate: Lesson 9 - Reconciliation - Fund to Government-Wide
In order to help you understand the relationship between the two sets of financial statements, GASBS 34 requires summary reconciliations between the fund financial statements and the government-wide financial statements. The nature of the reconciliations can be divided into the following categories:
• Reconciliations for governmental activities.
• Reconciliations for business-type activities.
Learning Objectives:
1. Define what reconciliations are required by GAAP.
2. Understand what causes the differences between the governmental fund financial statements and the government activities in the government-wide financial statements.
3. Recognize the common items required to reconcile government fund equity to government activity net assets.
4. Recognize the common items required to reconcile the changes in fund balances to the net increase (decrease) in net assets for governmental activities.
5. Understand what causes the differences between the proprietary fund financial statements and the business-type activities in the government-wide financial statements.
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Intermediate: Lesson 10 - Reconciliation of Fund Balance to Net Assets
The purpose of this practice exercise is to demonstrate the most common differences between the governmental fund balance sheet and the governmental activities in the government-wide Statement of Net Assets. This practice exercise provides a method to determine whether you have grasped most of the concepts discussed throughout this course.
Please note that Internet Explorer is the required browser for this online tutorial.
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Intermediate: Lesson 11 - Practice Exercise - Statement of Activities - Governmental Activities
The purpose of this practice exercise is to demonstrate the most common differences between the governmental fund Statement of Revenues, Expenditures and Changes in Fund Balance and the governmental activities in the government-wide Statement of Activities. This practice exercise provides a method to determine whether you have grasped most of the concepts discussed throughout this course.
Please note that Internet Explorer is the required browser for this online tutorial.
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Intermediate: Lesson 12 - Current Events
This lesson addresses changes to governmental accounting standards and financial reporting requirements that are not necessarily incorporated into the previous lessons to bring you up-to-date on pronouncements and other communications issued by the GASB.
Learning Objectives:
1. Explain important changes in GASB statements not already incorporated in previous lessons.
2. Introduce new proposed standards.
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