Case study. Examine financial records and answer the questions

Questions after examining the financial statements:

1. Government-wide Statements.

·         What are the titles of the two government-wide statements?

·         Are total assets larger for governmental activities or business type activities?

·         Which function or program has the highest net cost?

·         What kind of general revenues are available to cover the net cost of governmental activities?

·         Were business-type activities profitable?

·         That is, is the excess of revenues over expenses positive?

·         Are there any component units that are directly presented as a column on the government-wide financial statements?

2. General Fund.

·         What title is given to the fund that functions as the General fund of the reporting entity?

·         Does the report state the basis of accounting used for the General Fund?

·         What types of assets are included on the Governmental funds balance sheet?

·         Do current and noncurrent assets appear on the balance sheet?

·         Is this reporting consistent with the basis of accounting being followed?

3. Other Governmental Fund Types.

·         List the names of governmental funds other than general fund that are included as major funds in the fund financial statements.

·         Identify which of the major funds, if applicable, are special revenue funds, debt service funds, capital project funds, and permanent funds.

4. Proprietary Funds.

·         List the names of the proprietary fund types included in the financial statements.

·         Do the financial statements provide evidence that all proprietary funds use accrual accounting?

5. Fiduciary Funds.

·         List the names of Fiduciary Funds included in the fund financial statements.

·         Identify whether each of these is an agency fund, investment trust fund, pension (and other employee) benefit trust fund, or private purpose trust fund?

·         Do the financial statements provide evidence as to what basis of accounting these funds use?

6. Notes to the Financial Statements.

·         Read the notes to the financial statements so that you can refer to them as needed in subsequent chapters.

·         What significant accounting policies are discussed in the first note?

·         Does the note describe the entities that are included as the component units?

·         Does it list entities that are not considered component units?

·         Are there any notes that enclose (1) any material violations of legal provisions? (2) deficit fund balances or net positions? (3) significant commitments or contingencies?