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Week 2 - Individual Problems

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Week 2 Individual Problems
Chapter 1, E1-2 Prob. # | Answer | | 1. | A | | 3. | C | | 4. | C | | 7 | B | | 9 | D | | 10 | C | |

Chapter 2, Question 12
What is a CAFR? What are its main components?
The CAFR is short for Comprehensive Annual Financial Report. The CAFR reports the governments’ activities from the fund accounts and the government-wide financial statements. The Main components are the introduction section, financial section, and statistical section.
Differentiating between a budget and a Comprehensive Annual Financial Report (CAFR).
The CAFR is a combination of financial reports for the transactions of the government. What makes it different from a budget is the transactions are complete and show revenues that pay expenditures.A budget represents what cash the government wants to use for the year or financial period on specific projects. This means a plan of services and actions by the government to meet public needs and requirements. Budget changes happen when revenues do not equal project amounts.This information comes from the annual CAFR to meet each period’s budget. With the CAFR the public views the amount spent and the amount in reserve.
So the budget is the plan, and the CAFR is the report of completion. The breakdown of the two is different also. The CAFR is an introductory describing the government, a financial section shows spending and revenues, and the statistical section with demographic and department statistics.The budget is a breakdown of different fund accounts, the money allotted and sometimes notes for restriction to the fund accounts to allow management the knowledge of possible extra fund spending.
Reference
Granof, M. H. & Khumawala, S. B. (2011).Government and not-for-profit accounting: Concepts & practices. (5thed.). Hoboken, NJ: John Wiley & Sons. Retrieved May 2, 2014 from ecampus.

Chapter 3, E3-2 Prob.
# | Question | Answer | 1. | Upon ordering supplies a government should | A | 2. | Upon receiving supplies that had previously been encumbered a government should | A | 3. | Upon closing the books at year-end a government should | C | 6. | A government places an order for a particular item of equipment and encumbers $5,500. The item arrives accompanied by an invoice for $5,200. The item arrives accompanied by an invoice for $5,200. The entries that the government should make should include (but not necessarily be limited to): | C | 8. | Per GASB Statement No. 34, governments must | C | 9. | The amount that a government has available to spend for a particular purpose in a particular year would be indicated by | D |

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