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McGraw-Hill Companies, The
Essentials of Accounting for Governmental and Not-for-Profit Organizations / Edition 9

Essentials of Accounting for Governmental and Not-for-Profit Organizations / Edition 9

by Paul A. Copley


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Product Details

ISBN-13: 9780073379425
Publisher: McGraw-Hill Companies, The
Publication date: 11/08/2007
Edition description: Older Edition
Pages: 456
Product dimensions: 6.30(w) x 9.10(h) x 0.70(d)

Table of Contents

Preface     iv
Introduction to Accounting and Financial Reporting for Governmental and Not-for-Profit Organizations     1
Generally Accepted Accounting Principles     3
Objectives of Accounting and Financial Reporting     6
Objectives of Accounting and Financial Reporting for the Federal Government     8
Objectives of Financial Reporting by Not-for-Profit Entities     8
Objectives of Accounting and Financial Reporting for State and Local Governmental Units     9
State and Local Government Financial Reporting     10
Comprehensive Annual Financial Report     10
Measurement Focus and Basis of Accounting     12
Fund Structure for State and Local Government Accounting and Reporting     13
Number of Funds Required     15
Budgetary Accounting     15
Accounting for Capital Assets, Including Infrastructure     16
Accounting for Long-Term Debt and Other Long-Term Liabilities     16
Additional Resources     17
Overview of Financial Reporting for State and Local Governments     22
The Governmental Reporting Entity     23
Overview of the Comprehensive Annual Financial Report (CAFR)     25
Example Comprehensive Annual Financial Report     26
Introductory Section     26
Financial Section: Auditor's Report     27
Required Supplementary Information-Management's Discussion and Analysis (MD&A)     28
Basic Financial Statements-Statement of Net Assets     30
Government-wide Statement of Activities     32
Reporting by Major Funds     34
Governmental Funds: Balance Sheet     34
Governmental Funds: Statement of Revenues, Expenditures, and Changes in Fund Balance     36
Proprietary Funds: Statement of Net Assets     38
Proprietary Funds: Statement of Revenues, Expenses, and Changes in Fund Net Assets     40
Proprietary Funds: Statement of Cash Flows     42
Fiduciary: Statement of Fiduciary Net Assets     44
Fiduciary: Statement of Changes in Fiduciary Net Assets     44
Notes to the Financial Statements     46
Required Supplementary Information Other than MD&A     48
Combining Statements     50
Statistical Information     50
Special-Purpose Governments     51
Public Colleges and Universities     51
Other Governmental Not-for-Profit Organizations     52
Budgetary Accounting for the General and Special Revenue Funds     58
Budgets as Legal Documents      59
Balance Sheet and Operating Statement Accounts     60
Budgets and Budgetary Accounts     62
Recording the Budget     63
Accounting for Revenues     65
Accounting for Encumbrances and Expenditures     66
Budget Revisions     70
Budgetary Comparison Schedule     70
Classification of Estimated Revenues and Revenues     72
Classification of Appropriations and Expenditures     72
AD Valorem Taxes     73
Accounting for the General and Special Revenue Funds     82
Modified Accrual Accounting     83
Revenue Recognition     83
Expenditure Recognition     86
Interfund Transactions     86
Interfund Loans     87
Interfund Services Provided and Used     87
Interfund Transfers     87
Interfund Reimbursements     87
General Fund Account Structure     87
Illustrative Case-General Fund     87
Recording the Budget     88
Reestablishment of Encumbrances     88
Recording Prior-Year Property Taxes as Revenues     89
Tax Anticipation Notes Payable     89
Payment of Liabilities as Recorded      89
Encumbrance Entry     90
Recording Property Tax Levy     90
Collection of Delinquent Taxes     90
Collection of Current Taxes     91
Other Revenues     91
Repayment of Tax Anticipation Notes     92
Recognition of Expenditures for Encumbered Items     92
Payrolls and Payroll Taxes     93
Payment of Vouchers and Other Items     93
Correction of Errors     94
Amendment of the Budget     94
Interfund Transactions     95
Write-off of Uncollectible Delinquent Taxes     97
Reclassification of Current Taxes     97
Accrual of Interest and Penalties     98
Deferral of Property Tax Revenue     98
Special Item     98
Preclosing Trial Balance     98
Closing Entries     100
Year-End Financial Statements     101
Illustrative Case-Special Revenue Fund     104
Motor Fuel Tax Revenues     104
Expenditures for Road Repairs     104
Reimbursement to General Fund     105
Reimbursement Grant Accounting     105
Closing Entry     105
Year-End Financial Statements      107
Recognition of Inventories in Governmental Funds     107
Accounting for Other Governmental Fund Types: Capital Projects, Debt Service, and Permanent     118
Capital Projects Funds     120
Illustrative Case     121
Other Issues Involving Acquisition of Capital Assets     126
Acquisition of General Fixed Assets by Lease Agreements     126
Construction of General Fixed Assets Financed by Special Assessment Debt     127
Debt Service Funds     128
The Modified Accrual Basis-As Applied to Debt Service Funds     128
Additional Uses of Debt Service Funds     129
Debt Service Accounting for Serial Bonds     129
Illustrative Case-Regular Serial Bonds     130
Other Issues Involving Payment of Long-Term Debt     132
Debt Service Accounting for Deferred Serial Bonds     132
Debt Service Accounting for Term Bonds     132
Debt Service Accounting for Capital Lease Payments     132
Bond Refundings     133
Permanent Funds     134
Financial Reporting for Governmental Funds     136
Balance Sheet-Governmental Funds     136
Statement of Revenues, Expenditures, and Changes in Fund Balances-Governmental Funds     140
Proprietary Funds     149
Internal Service Funds     151
Establishment and Operation of Internal Service Funds     151
Illustrative Case-Supplies Fund     152
Other Issues Involving Internal Service Funds     156
Risk Management Activities     156
Implications for Other Funds     156
Enterprise Funds     157
Illustrative Case-Water Utility Fund     158
Preclosing Trial Balance     163
Proprietary Fund Financial Statements     164
Statement of Net Assets     166
Statement of Revenues, Expenses, and Changes in Fund Net Assets     166
Statement of Cash Flows     167
Accounting for Municipal Solid Waste Landfills     170
Pollution Remediation Costs     171
Fiduciary (Trust) Funds, Interfund Transactions     186
Agency Funds     187
Tax Agency Funds     189
Accounting for Tax Agency Funds     189
Financial Reporting for Agency Funds     191
Private-Purpose Trust Funds     191
Accounting for Investments     193
Illustrative Case-Private-Purpose Trust Funds     193
A Note about Escheat Property     195
Investment Trust Funds      196
Public Employee Retirement Systems (Pension Trust Funds)     196
Accounting and Reporting for Defined Benefit Pension Plans     197
A Note about Other Postemployment Benefits     201
Summary of Employer Reporting     204
A Note about IRS 457 Deferred Compensation Plans     205
Interfund Transactions     205
Reciprocal Interfund Activity-Interfund Loans and Advances     206
Reciprocal Interfund Activity-Interfund Services Provided and Used     207
Nonreciprocal Interfund Activity-Interfund Transfers     207
Nonreciprocal Interfund Activity-Interfund Reimbursements     207
A Final Comment on Fund Accounting and Reporting     208
Government-Wide Statements, Fixed Assets, Long-Term Debt     220
Conversion from Fund Financial Records to Government-Wide Financial Statements     221
Recording Capital Assets, Removing Expenditures for Capital Outlays, Recording Depreciation, and Converting Sales of Capital Assets to the Accrual Basis     223
Changing "Proceeds of Bonds" to Debt Liabilities, Changing Expenditures for Debt Service Principal to Reduction of Liabilities, Amortizing Bond Premiums, and Adjusting for Interest Accruals     225
Adjusting to Convert Revenue Recognition to the Accrual Basis     227
Adjusting to Record Expenses on Accrual Basis     230
Adding Internal Service Funds to Governmental Activities     230
Eliminating Interfund Activities and Balances within Governmental Activities     232
Worksheets to Illustrate the Adjustments     233
Government-Wide Financial Statements     236
Statement of Net Assets     236
Statement of Activities     236
Required Reconciliation to Government-wide Statements     240
Accounting for Fixed Assets, Including Infrastructure     242
Accounting for General Fixed Assets     242
Accounting for Infrastructure     243
The Modified Approach for Reporting Infrastructure     244
Collections     245
Asset Impairment     245
Accounting for Long-Term Debt     246
Types of General Long-Term Debt     246
Debt Disclosures and Schedules     247
Accounting for Special-Purpose Entities, Including Public Colleges and Universities     265
GASB Statement 34 Reporting Rules for Special-Purpose Entities     265
Reporting by Special-purpose Local Governments Engaged in Governmental Activities     266
Reporting by Special-purpose Local Governments Engaged Only in Business-type Activities     268
Reporting by Special-purpose Local Governments Engaged Only in Fiduciary-Type Activities     271
Accounting and Financial Reporting for Public Colleges and Universities     272
The Environment of Public Higher Education     272
Accounting and Financial Reporting for Public Institutions of Higher Education     273
Illustrative Case-Northern State University-Beginning Trial Balance     275
Illustrative Case-Journal Entries     275
Illustrative Case-Closing Entries     282
Illustrative Case-Financial Statements     285
Summary     289
Accounting for Private Not-for-Profit Organizations     297
Organizations Covered in this Chapter     299
Overview of Not-For-Profit Accounting     300
Three Classes of Net Assets     300
Financial Reporting     300
Note Disclosures     301
Accounting for Contributions, Including Reclassifications of Net Assets     301
Reporting of Expenses and Assets     303
Special Topics: Accounting for Contributions     304
Illustrative Transactions and Financial Statements     305
Beginning Trial Balance     305
Transactions     306
Financial Statements     313
Alternative Procedure for Recording Fixed Assets     316
Performance Evaluation     318
Mergers and Acquisitions     319
Summary of Not-For-Profit Accounting and Reporting     320
College and University Accounting-Private Institutions     329
Overview of Private College and University Accounting     331
Financial Statements     331
Net Asset Classification     332
Revenue Reduction versus Expenses     333
Academic Terms Encompassing More Than One Fiscal Year     333
Expenses     333
Other Accounting Guidance     334
Illustrative Transactions and Financial Statements     335
Illustrative Transactions     335
Illustrative Financial Statements for Private Colleges and Universities     342
Split-Interest Agreements     342
Summary of Accounting and Reporting     347
Accounting for Hospitals and Other Health Care Providers     355
Accounting and Reporting Requirements of the Health Care Guide     357
Financial Statements     357
Revenues     359
Classifications     359
Illustrative Transactions and Financial Statements     360
Beginning Trial Balance     360
Illustrative Statements for Private-Sector Not-for-Profit Health Care Entities     366
Financial Reporting for Governmental Health Care Entities     369
Financial Reporting for Commercial (For-Profit) Health Care Entities     371
Summary and Conclusions Regarding Health Care Accounting and Reporting     371
Auditing, Tax-Exempt Organizations, and Evaluating Performance     378
Governmental Auditing     379
The Single Audit Act and Amendments     385
The Sarbanes-Oxley Act     388
Tax-Exempt Organizations     389
Applying for Tax-Exempt Status     390
Federal Filing Requirements     391
Public Disclosures     395
State Filing Requirements     395
Unrelated Business Income Tax (UBIT)     395
IRS Oversight     396
Summary and Some Conclusions Related to Exempt Entities     396
Evaluating Performance     397
Analysis of Not-for-Profit Organization Financial Statements     397
Analysis of State and Local Government Financial Statements     398
Service Efforts and Accomplishments Reporting     403
Glossary: Governmental and Not-For-Profit Accounting Terminology     414
Index     437

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