AMORTIZATION – The gradual reduction or liquidation of an amount over a period of time according to a specified schedule either by a direct credit, or debit; or through the use of a valuation account. AGENCY CODE – The four character numeric code assigned by the Office of Financial Management to designate the distinct operational units of state government. Agency codes are used for the identification of state agencies. Agencies are to use only the code assigned to their agency unless specified elsewhere in this manual. ACCRUED REVENUES – Revenues that meet the appropriate recognition criteria of the fund type involved, but are not realized during the accounting period. Refer to ACCRUAL BASIS, ACCRUE, and MODIFIED ACCRUAL BASIS. In a budget deficit, the entity expects to spend more than they will bring in, so there is a debit to budgetary control for $150,000.

PROJECT TYPE CODE – The one character alpha/numeric code assigned by OFM to identify specified information technology expenditures/expenses and to classify them as new acquisition or maintenance and operations. PROGRAM – Any of the major activities of an agency expressed as a primary function or organizational unit. Agencies may not alter their program structure without the explicit approval of the legislature and the Office of Financial Management. PROFESSIONAL SERVICE CONTRACT – An agreement, or any amendment thereto, with a consultant or technical expert for the rendering of professional services to the state which is consistent with state law. Professional service contracts may render services to state agencies, businesses, providers, other contractors, etc.

Property taxes and fines represent which of the following classes of non exchange transactions for governmental units?

A liability is recognized for a nonexchange financial guarantee when qualitative factors and historical data indicate that it is more likely than not that the government will be required to make a payment related to the guarantee. NET POSITION – An element of the statement https://online-accounting.net/ of financial position measured by the difference between assets and deferred outflows of resources and liabilities and deferred inflows of resources. LOCKBOX SERVICES – A post office box opened in the name of a depositor but accessed and serviced by a remittance processor.

Current assets of this character serve as the basis for classification of fund balance as non spendable. Contents of statement provided by local government to auditor; expenditure of excess reserves in certain funds; restrictions on use of budgeted ending fund balance in certain circumstances. Each enterprise fund established must account for all charges properly related to the purpose of the enterprise fund, including, without limitation, debt service, capital outlay and operating expenses. Upon dissolution of the enterprise fund, no transfer of equity that may be made available to other funds or functions may be declared until after all proper obligations have been charged against the enterprise fund. The Committee on Local Government Finance shall adopt regulations governing the permissible expenditures from an enterprise fund pursuant to this paragraph.

Encumbrances would appear in?

As a result, compensated absences relating to employees whose salaries are accounted for in governmental funds are not recorded as expenditures and liabilities of the fund until the due date for payment of the compensated absences. GASB Interpretation No. 6 clarifies the guidance for recognizing certain liabilities and expenditures in governmental funds, including general long-term indebtedness such as compensated absences. The matured portion of long-term indebtedness, to the extent it is expected to be liquidated with expendable available financial resources, should be recorded as a fund liability and expenditure.

The purchase order increases an encumbrance. The General Journal entry created for encumbered purchase orders when the purchase order is approved will credit the Reserve for Encumbrances account and Debit the Fund Balance for the amount of the sum of the line items on the purchase order.

A purchase order is approved.Dr. ExpendituresCr. Vouchers PayableDr. Budgetary ControlCr. Encumbrance

COMMERCIAL LODGING FACILITY – A business, non-profit, or governmental entity that provides lodging accommodations for a fee. A commercial lodging facility other than a hotel must be supported by a tax ID number and must be available to the general public to qualify as commercial lodging. Reimbursement for lodging at a private residence not meeting the criteria above is not allowed. CASH RECEIPTS – Cash receipts are any moneys (e.g., checks, cash, warrants, credit or debit card amounts, IAP’s ) received by a state agency during a period regardless of when the moneys are earned.

• DEBT – An obligation resulting from the borrowing of money or from the purchase of goods and services.
• The General Fund may also be used if a Debt Service Fund is not required.
• Encumbrances under modified accrual accounting are recognized when fund liabilities are incurred.
• In proprietary fund type accounts, short-term liabilities are payable within one year.
• SCIENTIFIC AMORTIZATION METHOD – Under the scientific amortization method, the total discount or premium is prorated to interim periods on the basis of a constant rate to produce a level rate of yield.
• SERVICE ORGANIZATION CONTROLS REPORTS – Are designed to help service organizations build trust and confidence in their service delivery processes and controls through a report by an independent Certified Public Accountant.

Such revenues include state grants and state education foundation funding. TRADE DISCOUNT – An allowance, usually varying in percentage with the volume of transactions, made without respect to the time when the account is paid. These discounts are commonly considered a reduction of the sales or purchase price and not earnings. The term is not to be confused with cash discount. POINT OF SALE – An electronic payment system in a merchant location where consumers pay for retail goods and services, through the use of credit cards and/or debit cards that directly access and deduct funds from the customer’s bank account. PETTY CASH – A sum of money set aside on an imprest basis. Cash held for making change or paying small obligations when the issuance of a formal voucher and warrant/check would be too expensive and time consuming.

c. A purchase order is approved.

Appropriations are more than expenditures and encumbrances. Appropriations are more than estimated revenue. This account is debited in the general fund when fixed assets are acquired. Assume that a purchase order to acquire the fixed assets was not recorded. This account is debited in the general fund when it records a billing from another fund for services that were provided to the general fund. If a purchase order is edited and saved before you’ve received lines on the purchase order, the original encumbrances journal entry is deleted. The detail for encumbrance amounts are the purchase order line items.

• UNANTICIPATED RECEIPTS – Money received which has not been appropriated by the Legislature.
• Underlying securities owned should be reported as «investments.» RELATED ASSETS AND LIABILITIES SHOULD NOT BE NETTED.
• Not record depreciation expense in any of its funds.
• Such liabilities result from current services received from employees; however, the payment of the liabilities usually does not occur until a future date.
• Any unencumbered balance on an accrual or modified accrual basis or any unexpended balance on a cash basis remaining to the credit of any appropriation shall lapse at the end of the fiscal year and shall revert to the available balance of the fund from which appropriated.

PERIODIC INVENTORY – An inventory system whereby the agency performs a physical count of its inventory periodically, at least annually at fiscal year end. PERFORMANCE-BASED CONTRACT – A written document detailing an agreement between parties and identifying expected deliverables, performance measures or outcomes with payment contingent on their successful delivery. Performance-based contracts also use appropriate techniques, which may include, but are not limited to, consequences and/or incentives to ensure that agreed upon value to the state is received. PARCEL LOCATION IDENTIFIER – The county assessor’s parcel number of the land, or other code used by the agency to specifically identify the location of the land.

Actual financial performance presented in a manner consistent with the budget.Final Amended budget.Originally adopted budget.

CERTIFICATE OF PARTICIPATION – A debt financing program administered by the Office of the State Treasurer. A COP is an instrument evidencing a pro rata share in a specific pledged revenue stream, usually lease payments by the issuer that are subject to annual appropriation. The certificate generally entitles the holder to receive a share, or participation, in the lease payments from a particular project. the encumbrance account of a governmental unit is debited when The lease payments are passed through the lessor to the certificate holders. The lessor typically assigns the lease and lease payments to a trustee, which then distributes the lease payments to the certificate holders. BOND – A debt instrument issued through a formal legal procedure and secured either by the pledge of specific properties or revenues or by the general credit of the state.