Topics covered in this presentation:

(1)

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

Presented by:

Darla Erickson

Local Government Services Bureau

State Accounting Division, Department of Administration 1

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

Topics

covered

in

this

presentation:

•

Overview of Governmental Accounting Basics

•

Overview

of

Governmental

Accounting

Basics

• Principles

• Fundamentals of Debits and Credits • Fund Accounting/Basis of Accounting

•

Using

the

BARS

Chart

of

Accounts

• Funds

• Funds • Accounts • Objects

(2)

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

SOME

OF

THE

ACRONYMS

COMMON

TO GOVERNMENTAL ACCOUNTING

CAFR Comprehensive Annual Financial Report GASB Governmental Accounting Standards Board GAAFR Governmental Accounting, Auditing,

TO

GOVERNMENTAL

ACCOUNTING

3

GAAFR Governmental Accounting, Auditing, and Financial Reporting

GAAP Generally Accepted Accounting Principles

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

• PRINCIPLES OF GOVERNMENTAL ACCOUNTING

• Accounting and Reporting Capabilities

• Accounting systems should be maintained in accordance with generally

accepted accounting principles (GAAP) and uniform in MT by using the BARS

Chart of Accounts as prescribed by the Local Government Services Bureau

• Chart of Accounts:

http://doa.mt.gov/lgsb/Forms/AccountingSystemsProgram/1_AccountingM anuals/01_BARSChartofAccount

• Updates: http://doa.mt.gov/lgsb/bars_memos

• Fund Accounting Systems

• Accounting systems should be organized and operated on a fund basis

• Fund Types

• Fund financial statements should report governmental, proprietary and fiduciary fund types if applicable

• Number of Funds

(3)

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

•

PRINCIPLES

OF

GOVERNMENTAL

ACCOUNTING

• Specialp Revenue Funds (*recent( change)g )

• Special Revenue Funds must meet the new definition of a special revenue fund according to GASB54:

• Used to account for proceeds of specific revenue sourcesthat are

committed or restrictedto expenditures for specific purposes other than debt service or capital projects. – Balances will be » Non‐spendable » Restricted » Committed

» Assigned (but not only assigned fund balance)

» Negative Unassigned Fund Balance

*Existing funds that do not meet this fund balance type will report their balance in the

General Fund at year‐end for reporting purposes.

*Or Commit Revenues or Fund Balance to a major purpose by year‐end by taking the

highest action of local government by year‐end.

5

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

•

PRINCIPLES

OF

GOVERNMENTAL

ACCOUNTING

• Reportingp g Capitalp Assets

• A clear distinction should be made between general capital assets and those of the proprietary and fiduciary funds.

• Capital Assets are differentthan an asset inventory listing

– Threshold Policy should be determined by cost and useful life

• Valuation of Capital Assets

• Assets should be reported at historic cost

– Donated assets at the estimated fair market value at the time of acquisition

• Depreciation of Capital Assets

• Capital assets should be depreciated over their estimated useful lives

– Use your entity’s historical information to determine the useful life – the life will

(4)

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

•

PRINCIPLES

OF

GOVERNMENTAL

ACCOUNTING

• Reporting Long‐term Liabilities

• Reporting Long‐term Liabilities

• A clear distinction should be made between business‐type long‐term liabilities and general long‐term liabilities

• Measurement Focus/Basis of Accounting in the BFS

• The basic financial statements should display the government‐wide financial statements (full accrual) and the fund financial statements

(modified accrual)

7

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

•

PRINCIPLES

OF

GOVERNMENTAL

ACCOUNTING

• Budgeting, Budgetary Control/Reporting

• Budgets should be adopted, controlled through monitoring and comparison statements included in reporting.

• The budgetary statements should present original budget, final budget, actual amounts and a comparison with actual to final

– Date change: Approved budgetdue to County by the later of 30 days after receipt

of the certified taxable valuation or first Thursday in Sept

– Due to LGSB 60 days after receipt of the certified taxable valuation or Oct 1

– Local Budget Act: 7‐6‐40 MCA

• Transfer, Revenue, Expenditure/Expense Classifications

• Revenues should be maintained by fund, major source and other financing sources • Expenditures of governmental funds by fund, function/activity and other financing uses (transfers, etc) • Expenses of proprietary funds by fund/activity/object 8

(5)

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

•

PRINCIPLES

OF

GOVERNMENTAL

ACCOUNTING

• Common Terminologygy and Classificationf

• A common terminology and classification should be used consistently throughout the accounting software, budget, and financial report of each fund

• Annual Financial Reports

• Preparation of financial reports for the benefit of management should be prepared

• An Annual Financial Report should be prepared and made available

• An Annual Financial Report should be prepared and made available to the public and the Local Government Services Bureau

• Due to LGSB by Dec 31

9

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

•

Financial

Statements:

•

Balance

Sheet

(Governmental

Funds)

or

Statement

of

Net

Assets

(Enterprise

Funds)

Consists of:

•

Assets

–

debit

balance

•

Liabilities –

Liabilities

credit

balance

•

Fund

Balance

(Governmental

Funds)

or

Net

Assets(Enterprise

Funds)

Fund

Balance/Net

Assets

=

Assets

– Liabilities

(6)

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

Assets

•

Have

a

Debit

Balance

•

If

an

asset

has

a

credit

balance

– the

account

has

a

“negative”

balance

hi i

l

•

This

is

not

normal

11

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING



To

increase

an asset account you

debit

the account

12



To

decrease

an asset account

(7)

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

Liabilities

•

Have

a

Credit

Balance

•

If

a

liability

has

a

debit

balance

–

the

account

has

a

“negative”

balance

•

This

is

not

normal

13

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING



To

increase

a liability account

you

credit

the account



To

decrease

a liability account

(8)

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

Fund Balance/Net Assets has a credit balance

If it has a

debit

balance that is

“negative”

and isn’t



When you post a debit to an asset or liability account fund balance/net assets will

If it has a

debit

balance that is

negative

and isn t

normal.

Entries should rarely if ever debit or credit fund bal or net assets

15

automatically increase

When you post a credit to an asset or liability account fund balance/net assets will

automatically decrease

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

•

Financial

Statements:

Statement

of

Revenues,

,

Expenditures

p

and

Changes

g

in

Fund

Balances

(Governmental

Funds)

or

Statement

of

Revenue,

Expenses

and

Changes

in

Net

Assets

(Enterprise

Funds)

Consists of:

•

Revenues

–

credit

balance

•

Expenditures/Expenses

–

debit

balance

•

Other

Financing

Sources

(Uses)

or

Non

‐

Operating

Revenue/Expense

(9)

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

Revenues

•

Have

a

Credit

Balance

•

If

a

revenue

has

a

debit

balance

–

the

account

has

a

“negative”

balance

•

This

is

not

normal

17

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING



To

increase

a revenue account

you

credit

the account



To

decrease

a revenue account

(10)

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

Expenditures/Expenses

•

Have

a

Debit

Balance

•

If

an

expenditure/expense

account

has

a

credit

balance

– the

account

has a

“negative”

balance

has

a

“negative”

balance

•

This

is

not

normal

19

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING



To

increase

an expense/expenditure

account you

debit

the account

20



To

decrease

an expense/expenditure

(11)

FUNDAMENTALS

OF

DEBITS

&

CREDITS

FUNDAMENTALS

OF

DEBITS

&

CREDITS

BASIC ACCOUNTING FORMULA

DR

=

CR

21

Example: You receive $10 for a dog license

$10

=

$10

Cash (Asset)

=

Revenue (Pet Lic)

101000

=

323030

FUNDAMENTALS

OF

DEBITS

&

CREDITS

FUNDAMENTALS

OF

DEBITS

&

CREDITS

BASIC ACCOUNTING

FORMULA

EXPENSES/

EXPENDITURES + REVENUES +

ASSETS = LIABILITIES + EQUITY

(12)

FUNDAMENTALS

OF

DEBITS

&

CREDITS

FUNDAMENTALS

OF

DEBITS

&

CREDITS

ACCOUNTING FORMULA

EXPENSES/

ASSETS + EXPENDITURES = REVENUES + LIABILITIES + EQUITY

23

ASSETS

=

LIABILITIES + EQUITY

DR

=

CR

FUNDAMENTALS

OF

DEBITS

&

CREDITS

FUNDAMENTALS

OF

DEBITS

&

CREDITS

SELF-BALANCING SET OF ACCOUNTS

ACCOUNTING FORMULA

24

ASSETS + EXPENSE = REVENUES + LIABILITIES + EQUITY

(13)

FUNDAMENTALS

OF

DEBITS

&

CREDITS

FUNDAMENTALS

OF

DEBITS

&

CREDITS

•

RECAP



Debits

must

equal

credits

An entry made within a fund should have equal debits and credits



All

debits

and

credits

should

be

made

to

asset,

liability,

revenue,

expenditure/expense,

other

financing

sources/uses

or

restatement

accounts



Rarely,

if

ever,

should

fund

balance/net

assets

accounts

be

debited

or

credited

25

Test

our

knowledge

1. Assets have a normal __________ balance:

1 C dit

1. Credit

2. Debit

2. Liabilities have a normal ______ balance:

1. Debit

2. Credit

3. Debits should equal:

1. Revenues

(14)

TYPES

OF

FUNDS

TYPES

OF

FUNDS

GOVERNMENTAL FUNDS

•

1

000 ~ General

•

2

000 ~ Special Revenue

•

3

000 ~ Debt Service

27

•

3

000 ~ Debt Service

•

4

000 ~ Capital Projects

•

8

000 ~ Permanent

TYPES

OF

FUNDS

TYPES

OF

FUNDS

PROPRIETARY FUNDS

•

5

000 ~ Enterprise

28

•

6

000 ~ Internal Service

(15)

TYPES

OF

FUNDS

TYPES

OF

FUNDS

FIDUCIARY FUNDS

•

7

000 ~ Pension Trust

~ Investment Trust

29

Investment Trust

~ Private Purpose Trusts

~ Agency

TYPES

OF

FUNDS

TYPES

OF

FUNDS

9

000 ACCOUNT GROUPS -

For Governmental Funds!

•

General Capital Assets ~ 9000

•

General Long-Term Debt ~ 9500

•

No longer required to be reported

(16)

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

BASIS OF ACCOUNTING

Full Accrual Basis

Deals with the timing and recognition of

transactions and events

When recognized:

31

Modified Accrual Basis

Cash Basis

BACK

TO

THE

BASICS

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

Full Accrual Basis of Accounting

•

Recognizes increases and decreases in economic

resources (Net Assets) as soon as the

underlying event or transaction occurs

•Revenues are recognized as soon as they are

earned

32

•Expenses are recognized as soon as the liability

is incurred

•

Regardless of the time of related cash inflow

and outflows

(17)

BACK

TO

THE

BASICS

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

Modified Accrual Basis of Accounting

•Recognizes increases and decreases in financial

g

spendable resources only to the extent that

they reflect near-term inflows and outflows of

cash

• Amounts are recognized as revenues when earned,

only so long as they are collectible within the

33

only so long as they are collectible within the

period or soon enough thereafter to be used to

pay liabilities of the current period. (60 days)

•

In other words, when they are available to pay

expenditures of the current period.

BACK

TO

THE

BASICS

BACK

TO

THE

BASICS

The Cash Basis of Accounting

I th

i

l t t

hi

d

id

th l

t

•

Is the simplest to achieve and provides the least

disclosure

•

Only revenues received and expenses or expenditures

disbursed are recognized

•

The Balance Sheet of the Governmental Unit

displays only a balance in cash and the fund

balance accounts.

•

The Operating Statement presents results of only the

cash transactions for the reporting fund.

(18)

Test

our

knowledge

Governmental Funds are reported using

which Basis of Accounting:

1. Full Accrual Basis

2. Modified Basis

3. Cash Basis

Enterprise Funds are reported using

35

Enterprise Funds are reported using

which Basis of Accounting:

1. Full Accrual Basis

2. Modified Basis

3. Cash Basis

BASIS

&

MEASUREMENT

FOCUS

BASIS

&

MEASUREMENT

FOCUS

PRACTICAL DIFFERENCES:

•

Receipt of long-term debt proceeds

•

Receipt of long-term debt proceeds

•

Repayment of the principal of long-term

debt

•

Capital acquisition (outlay)

36

•

Depreciation of capital assets

(19)

BACK

TO

THE

BASICS

BACK

TO

THE

BASICS

ILLUSTRATIVE ENTRIES

RECEIPT OF LONG TERM DEBT PROCEEDS RECEIPT OF LONG-TERM DEBT PROCEEDS:

PROPRIETARY FUNDS: DR CR Cash $20,000 Bonds Payable $20,000 37 GOVERNMENTAL FUNDS: Cash $20,000

Other Financing Sources $20,000

(Proceeds of General Long-Term Debt)

BACK

TO

THE

BASICS

BACK

TO

THE

BASICS

ILLUSTRATIVE ENTRIES

REPAYMENT OF THE PRINCIPAL OF LONG-TERM DEBT:

PROPRIETARY FUNDS: DR CR Bonds Payable $5,000 Interest Expense 300 Cash $5,300 GOVERNMENTAL FUNDS: GOVERNMENTAL FUNDS:

Expenditure- Bond Principal $5,000 Expenditure-bond Interest 300

(20)

BACK

TO

THE

BASICS

BACK

TO

THE

BASICS

CAPITAL ACQUISITION: DR CR

PROPRIETARY FUNDS:

Equipment $20,000

Cash $20,000

*If expense/capital outlay was used – reverse as part of closing entries

GOVERNMENTAL FUNDS:

39

Expenditure-capital Outlay $20,000

Cash $20,000

BACK

TO

THE

BASICS

BACK

TO

THE

BASICS

PROPRIETARY FUNDS: DR CR Depreciation Expense $2,000 Accumulated Depreciation $2,000 GOVERNMENTAL FUNDS: 40

Depreciation may be Recorded in the General Capital Asset Account Group

(21)

41

•

Chart

of

Accounts

is

the

framework

of

an

BARS

CHART

OF

ACCOUNTS

BARS

CHART

OF

ACCOUNTS

accounting

system

•

Is

a

uniform

system

for

Local

Governments

•

Provides

the

information

needed

for

administration

&

reporting

purposes

ll

f

i

•

Allows

for

comparisons

• Funds have of 4 digits • Accounts have 6 digits • Objects have 3 digits

(22)

BARS

‐

FUND

CLASSIFICATIONS

1

000 - General Fund

2

000 - Special Revenue Funds

3

000 - Debt Service Funds

4

000 - Capital Projects Funds

5

000 - Enterprise Funds

6

000 - Internal Service Funds

43

7

000 - Fiduciary Funds (Trust & Agency)

8

000 - Permanent Funds

9

000 - General Capital Asset/Long-Term Debt

BARS

FUND

CLASSIFICATION

CONT.

Example

of

further

breakdown

of

funds:

•

5

000

–

5

999

– Enterprise

p

Funds

50

10

– Golf

51

10

– Hospital/Nursing

Home

52

10

– Water

53

10

– Sewer

54

10

– Solid

Waste

5415

‐

Landfill

55

10

– Ambulance

44

(23)

BARS

BALANCE

SHEET

ACCOUNTS

BARS

BALANCE

SHEET

ACCOUNTS

1

00000

-

Assets and Other

Debits

2

00000

-

Liabilities, Equity and

Other

Credits

Within these two groups, assets and liabilities are

f th

d fi

d i t

th

l

i l

t

i

45

further defined into other logical categories

depending upon the nature of the particular asset

or liability.

BALANCE

SHEET

ACCOUNTS

BALANCE

SHEET

ACCOUNTS

Principal

groups

of

asset

&

other

debit

numbers:

10

/

10

0000

– Cash/Investments

11

0000

– Taxes/Assessments

Receivable

12

0000

– Other

Receivables

13

0000

– Due

from

and

advance

from

14

0000

– Prepaid

Expenses

15

0000

– Inventories

16

0000

– Restricted

Assets

(24)

BALANCE

SHEET

ACCOUNTS

BALANCE

SHEET

ACCOUNTS

Example

of

further

breakdown

of

an

asset

t

account:

11

0000

–

Taxes

Receivable

111

000

– Mobile

Home

Taxes

Receivable

113

000

– Real

Taxes

Receivable

115

000

– Personal

Taxes

Receivable

116

000

– Protested

Taxes

Receivable

118

000

– Special

Assessments

Receivable

₄₇

BALANCE

SHEET

ACCOUNTS

BALANCE

SHEET

ACCOUNTS

Liabilities,

equity

&

other

credits

numbers:

20

0000 Sh t t

P

bl

20

0000

– Short

‐

term

Payables

21

0000

– Other

Short

‐

term

Payables/Due

to

22

0000

– Deferred

Credits

23

0000

– Long

‐

term

Liabilities

24

0000

– Other

credits

25

0000

–

27

0000

– Fund

Balance/Net

Assets

28

0000

– Investment

in

Capital

Assets

(Fund 9500)

(25)

BARS

–– REVENUE

REVENUE

ACCOUNTS

31

0000

-

Taxes

32

0000

Licenses and Permits

32

0000

-

Licenses and Permits

33

0000 -

Intergovernmental

Revenues

34

0000

-

Charges for Services

35

0000

-

Fines and Forfeitures

36

0000

-

Miscellaneous Revenues

49

36

0000

Miscellaneous Revenues

37

0000

-

Investment Earnings

38

0000

-

Other Financing Sources

39

0000

-

Internal Services

BARS

–– EXPENDITURE

EXPENDITURE

ACCOUNTS

41

0000

- General Government

42

0000

Public Safety

42

0000

- Public Safety

43

0000

- Public Works

44

0000

- Public Health

45

0000

- Social/Economic Services

46

0000

- Culture and Recreation

46

0000

Culture and Recreation

47

0000

- Housing and Community Dev.

48

0000

- Conversation of Natural Resources

(26)

BARS

–– EXPENDITURE

EXPENDITURE

ACCOUNTS

––

CONT.

50

0000

- Internal Services

51

0000

- Miscellaneous

52

0000

- Other Financing Uses

51

52

0000

Other Financing Uses

BARS

–– OBJECT

OBJECT

EXPENDITURE

CLASSIFICATIONS

EXPENDITURE

CLASSIFICATIONS

1

00 - Personal Services

2

00

S

i

2

00 - Supplies

3

00 - Purchased Services

4

00 - Building Materials

5

00 - Fixed Charges (Insurance, rent)

6

00

Debt Service

52

6

00 - Debt Service

7

00 - Grants, Contributions, Indemnities

8

00 - Other Objects, Transfers, Depreciation

9

(27)

BARS

–– OBJECT

OBJECT

EXPENDITURE

CLASSIFICATIONS

EXPENDITURE

CLASSIFICATIONS

Example

of

further

breakdown

of

object

codes:

2

00 –

Supplies

2

00

Supplies

21

0

– Offices

Supplies

22

0

– Operating

Supplies

23

0

– Repair

&

Maintenance

Supplies

231–Fuel – Gas Oil Diesel

231–Fuel – Gas, Oil, Diesel

232–Motor vehicle parts

233–Machinery & equipment parts

24

0

– Other

Repair

&

Maintenance

Supplies

25

0

– Supplies

for

Resale

53

BACK

TO

THE

BASICS

BACK

TO

THE

BASICS

BUDGETARY, ACCOUNTING AND REPORTING SYSTEM (BARS) FOR MONTANA, CITIES, TOWNS AND COUNTIES

BARS ACCOUNT STRUCTURE BARS ACCOUNT STRUCTURE

Asset & Liability Accounts - (Illustration 1)

1st Digit 1 = Assets & Other Debits

1st Digit 2 = Liabilities& Other Credits

Fund Account

Number Number

(28)

BACK

TO

THE

BASICS

BACK

TO

THE

BASICS

BARS ACCOUNT STRUCTURE

Asset & Liability Accounts - (Illustration 1)

1st Digit 1 = Assets & Other Debits

1st Digit 2 = Liabilities& Other Credits

55

Fund Account

Number Number

1

000

10

1000

GENERAL CASH

BACK

TO

THE

BASICS

BACK

TO

THE

BASICS

BARS ACCOUNT STRUCTURE - CONT.

Revenue Accounts - (Illustration 2)

1st Digit 3= Revenue

Organization

Fund Code Major

Program Job Code (Department) Source Sub-Source Detail

56

g ( p )

X XXX XXX

Optional Optional

1000 31 1 010

GENERAL TAXES GENERAL

PROPERTY TAXES

REAL ESTATE

(29)

BACK

TO

THE

BASICS

BACK

TO

THE

BASICS

BARS ACCOUNT STRUCTURE - CONT.

Expenditure Accounts - (Illustration 3)

1st Digit 4 & 5 - Expenditures

Organization

Fund Code Sub Major

Sub-Program Job Code (Department) Function Activity Activity Object Object Detail

X XXX 1000 XXX 42 01 40 2 2 1

57

X XXX XXX

Optional Optional Optional

1000 42 01 40 2 2 1 GENERAL PUBLIC SAFETY LAW ENFORCEMENT SERVICES CRIME CONTROL & INVESTIGA-TION SUPPLIES OPERATING SUPPLIES UNIFORMS

(30)

BACK

TO

THE

BASICS

BACK

TO

THE

BASICS

59

BACK

TO

THE

BASICS

BACK

TO

THE

BASICS

(31)

Identify the appropriate revenue code number for the following revenue items:

Fund # Account #

1. Accruing monthly fees for garbage collections services _____________________________

REVENUE

QUIZ

REVENUE

QUIZ

2. The receipt of real estate taxes in the general fund _____________________________ 3. The receipt of personal property taxes in general fund _____________________________ 4. The receipt of money from the Montana Treasure State

Endowment program for a water project _____________________________ 5. The receipt of interest on a capital projects fund _____________________________ 6. The receipt of money from the state as an allocation from

taxes on fuel __________________________________________________________ 7. The receipt of a federal Community Development Block

Grant _____________________________ 8. The receipt of money from the City Judge for fines _____________________________ 9. The receipt of proceeds from swimming pool collections______________________________ 10. The receipt of fees collected by the clerk for copies ______________________________

61 Identify the appropriate expenditure/expense code number for the following items: Fund Account Object 1. Payment of wages to the Financial Clerk _____________________

EXPENDITURE

QUIZ

EXPENDITURE

QUIZ

2. The purchase of tires for a dump truck in the road and street department _____________________ 3. The purchase of a garbage truck for use in collection ______________________ 4. The purchase of envelopes for the City Judge ______________________ 5. Payment for electricity for a building at the water plant ______________________ 6. Payments for the rental of a backhoe paid for with

gas tax monies

gas tax monies _____________________ 7. The purchase of a riding lawn mower for the park _____________________ 8. Recording the depreciation of garbage equipment _____________________ 9. Payment of the employer's contribution to Police Chief’s retirement _____________________ 10. Payment for the cost of the audit of the City _____________________

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Questions…

63

Local

Government

Services Bureau

Website:

http://doa.mt.gov/lgsb

Address: 301 S Park Ave ~ Room 340 PO B 200547 H l MT 59620 0547 PO Box 200547 ~ Helena, MT 59620-0547 Phone: 841-2909

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Lincoln Flathead

Glacier Toole _Hill

Blaine Phillips Valley Daniels Sherida n Roosevelt Lake Missoula Teton Gallati n Cascade Meagher Judit h Basin Chouteau Sweet Grass Fergus Garfield McCone Musselshell Rosebud Richland Dawson Custer Powder Carter Fallon 65

Madison Park Carbon

Big Horn Powder River Carter Kalispell Magda Nelson (406)257-5245 [email protected] Helena Jamie Cain (406)841-2902 [email protected] Billings Darla Erickson (406)371-5627 [email protected] Circle Tod Kasten (406) 974-3377 [email protected] Jamie Cain Area 1 – Helena Phone: 841-2902 [email protected] Area 1 – Helena Anaconda-Deer Lodge Darla Erickson Area 2 – Billings Phone: 371-5627 [email protected] Area 2 – Billings Big Horn Anaconda Deer Lodge

Beaverhead Blaine Broadwater Butte-Silver Bow Cascade Chouteau Gallatin Granite Hill ff Big Horn Carbon Fergus Golden Valley Musselshell Park Petroleum Rosebud Jefferson

Lewis & Clark Madison Meagher Powell Teton Stillwater Sweet Grass Treasure Wheatland Yellowstone

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Tod Kasten Area 3 – Circle Phone: 974-3377 [email protected]

Area 3 – Miles City Carter Magda Nelson Area 4 – Kalispell Phone: 257-5245 [email protected] Area 4 – Kalispell Flathead Carter Custer Daniels Dawson Fallon McCone Phillips Powder River P i i Flathead Glacier Lake Liberty Lincoln Mineral Missoula Pondera R lli 67 Prairie Richland Roosevelt Sheridan Valley Wibaux Ravalli Sanders Toole 68

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•

QUIZ

#1

– Account

Type

&

Normal

Balance

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

Q

yp

Accounts to use: Normal Balances:

* Asset * Debit * Liability * Credit * Equity * Revenue * Expenditure/Expense * Contra‐asset (use 2 times) 69

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

QUIZ #1 – Account Type & Normal Balance

TYPE OF NORMAL TYPE OF NORMAL

ACCOUNT NAME ACCOUNT BALANCE

Depreciation __ _

Accounts Payable __________ _________

Deferred Revenue ____________________ __________________ Interest Receivable __________

________

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THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

QUIZ #1 - CONT.

Cash __________ _________

Amount To Be Provided ______ _ Interest Earnings ___

71

g __________ _________

Allowance For Depreciation __________

________

City Court Fines (Collected) __________ _________

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

QUIZ #1 - CONT.

Real Estate Taxes (Collected) __ _

Capital Outlay __________ _________ Warrants Payable __________ _________ 72 y __________ _________ Inventories __________

________

Net Assets __________ _________

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THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

QUIZ #1 - CONT.

Due To Other Governments ______ _ Accounts Receivable __ _ Debt Service Interest ___

73

__________ _________ Judgments & Losses __________

________

Prepaid Expense __________ _________

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

QUIZ #1 - CONT.

Bonds Payable __ _

Taxes Receivable __________ _________

Gas Tax Apportionmentpp ____________________ __________________

Deposits Payable __________

________

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THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

QUIZ #1 - CONT.

Supplies purchased _____ _ Sale of Capital Assets __ _ Allowance For Uncollectible Accounts ___

75

__________ _________

County Option Tax __________

________

Federal Disaster Aid __________ _________

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

QUIZ #1 - CONT.

Street & Road Maintenance _____ _ Due From Other Funds __ _ Machinery & Equipment ___

76

y q p __________ _________

Fund Balance __________

________

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THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

QUIZ #1 - CONT.

Jury Services _ _

Penalty & Interest on Delinq. Taxes __________ _________ Restricted for Revenue Bond __________ _________

77

__________ _________ Advance to other Funds __________

________

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79

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• Quiz #2 – Common entries – Accounts to use for this quiz:

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

 Cash

 Supplies

 Gas Tax Apportionment

 Taxes Receivable  Accounts Receivable  Accounts Payable  Interest Receivable  Interest Revenue  Prepaid Expense

 Expense (Enterprise Funds)/Expenditure (Governmental Funds)

 Depreciation

 Allowance for Depreciation

 Deferred Revenue

 Tax Revenue

81

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

QUIZ #2 – ENTRIES

DEBIT CREDIT Record Receipt of Gas Tax Apportionment from State

______________________________ $______

___________________________ $_______ Record Purchase of Supplies

______________________________ $______

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THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

QUIZ #2 – ENTRIES CONT.

DEBIT CREDIT Record the Receipt of Taxes

______________________________ $______

___________________________ $_______ R d th A l f E dit

83

Record the Accrual of Expenditures

______________________________ $______

___________________________ $_______

THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

DEBIT CREDIT DEBIT CREDIT Record the Payment of the Expenditure Accrual

______________________________ $______

___________________________ $_______ Record the Accrual of Interest Revenue

84

Record the Accrual of Interest Revenue

______________________________ $______

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THE

BASICS

OF

FUND

ACCOUNTING

THE

BASICS

OF

FUND

ACCOUNTING

DEBIT CREDIT

DEBIT CREDIT Record the Receipt of the Interest Revenue

______________________________ $______

___________________________ $_______ Record Annual Depreciation Expense

85

Record Annual Depreciation Expense

______________________________ $______

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