Accounting for Governmental and Nonprofit Entities

Wilson, Kattelus

13th edition


Chapter 1

  1. Identify and explain the characteristics that distinguish governmental and not-for-profit entities from for-profit entities.
  2. Identify the authoritative bodies responsible for setting financial reporting standards for (1) state and local governments, (2) the federal government, and (3) not-for-profit organizations.
  3. Contrast and compare the objectives of financial reporting for (1) state and local governments, (2) the federal government, and (3) not-for-profit organizations.
  4. Explain how management's discussion and analysis (MD&A), basic financial statements, and required supplementary information of state and local governments relate to their comprehensive annual financial reports.
  5. Explain the different objectives, measurement focus, and basis of accounting of the government-wide financial statements and fund financial statements of state and local governments.

Chapter 2

  1. Explain the nature of the three major activity categories of a state or local government: governmental activities, business-type activities, and fiduciary activities
  2. Explain the components of GASB's integrated accounting and financial reporting model, including:
    The reporting entity
    Government-wide financial statements
    Fund financial statements
    Definition of fund and principles of fund accounting
    Major fund reporting
    Types of funds in each fund category and characteristics of each fund type


Chapter 3

  1. Explain how operating revenues and expenses related to governmental activities are classified and reported in the government-wide financial statements.
  2. Distinguish, at the fund level, between Revenues and Other Financing Sources and between Expenditures and Other Financing Uses.
  3. Explain how revenues and expenditures are classified in the General Fund.
  4. Explain how budgetary accounting contributes to achieving budgetary control over revenues and expenditures, including such aspects as:
    Recording the annual budget.
    Accounting for revenues.
    Accounting for encumbrances and expenditures.
    Accounting for allotments.
    Reconciling GAAP and budgetary amounts.



Chapter 4

  1. Recognize typical operating transactions for governmental activities and prepare appropriate journal entries at both the government-wide and fund levels.
  2. Account for expense recognition at the government-wide level and expenditures at the fund level for goods encumbered in the prior year.
  3. Explain the contents of interim balance sheets and budgetary comparison schedules.
  4. Explain the difference between exchange and nonexchange transactions, and the classifications of nonexchange transactions.
  5. Explain and make entries for internal exchange transactions.
  6. Prepare adjusting entries, including reclassification of property taxes to delinquent status, accrual of interest and penalties for property taxes, and adjustment for inventories.
  7. Prepare a pre-closing trial balance for the General Fund.
  8. Prepare closing journal entries.
  9. Prepare year-end General Fund financial statements.
  10. Account for operating grants and other financial assistance using special revenue funds.
  11. Account for interfund transactions; distinguish between intra- and inter-activity transactions; and explain accounting for intra-entity transactions.


Chapter 5

  1. Describe the nature and characteristics of general capital assets.
  2. Account for the acquisition of general capital assets including infrastructure assets.
  3. Account for the maintenance and disposition of general capital assets.
  4. Account for depreciation of general capital assets including the modified approach for infrastructure assets.
  5. Explain the purpose and characteristics of a capital projects fund.
  6. Explain the typical sources of financing for capital projects.
  7. Prepare journal entries for a typical capital project, both within the capital projects fund and within the governmental activities category at the government-wide level.
  8. Explain the concepts and accounting procedures for special assessment capital projects.
  9. Prepare financial statements for capital projects funds.


Chapter 6

  1. Explain what types of liabilities are classified as general long-term liabilities. Make journal entries in the governmental activities general journal to record the issuance and repayment of general long-term liabilities.
  2. Make journal entries in the governmental activities general journal to record general long-term liabilities arising from capital lease agreements.
  3. Prepare a schedule summarizing changes in general long-term liabilities. Describe the reasons for and nature of statutory debt limits and explain the meaning of debt margin and overlapping debt.
  4. Explain the purpose and types of debt service funds.
  5. Describe the budgeting requirements for debt service funds.
  6. Make appropriate journal entries to account for debt service transactions.


Chapter 7

  1. Distinguish between the purposes of internal service funds and enterprise funds.
  2. Describe the characteristics of proprietary funds.
  3. Explain the financial reporting requirements, including the differences in reporting of enterprise funds and of internal service funds in the government-wide and fund financial statements.
  4. Explain the characteristics, accounting procedures, and termination of internal service funds.
  5. Prepare journal entries and describe financial reporting requirements for an internal service fund.
  6. Describe the characteristics and specialized accounting procedures for enterprise funds.
  7. Prepare journal entries and financial statements for an enterprise fund.


Chapter 8

  1. Explain the purposes of fiduciary funds and distinguish among agency funds and trust funds (private-purpose, investment, and pension).
  2. Describe the uses for and characteristics of agency funds.
  3. Explain the operations of and accounting and financial reporting for commonly used agency funds.
  4. Explain the creation, operation, accounting, and financial reporting for:
    A cash and investment pool (including an investment trust fund)
    A private-purpose trust fund
    A pension trust fund


Chapter 9

  1. Describe the financial reporting requirements of the GASBS 34 reporting model.
  2. Explain the key concepts and terms used in describing the governmental reporting entity.
  3. Apply the GASB criteria used to determine whether a potential component unit should be included in the reporting entity and when included, the manner of reporting component units.
  4. Identify and describe the contents of a comprehensive annual financial report (CAFR).
  5. Identify and explain contemporary financial reporting issues.


Chapter 10

  1. Explain the importance of evaluating governmental financial performance.
  2. Distinguish among and describe key financial performance concepts, such as:
    Financial position
    Financial condition
    Economic condition
  3. Explain the relationships among environmental factors, organizational factors, and financial factors in determining governmental financial condition.
  4. Identify, calculate, and interpret key economic and financial ratios that measure financial condition.
  5. Analyze financial performance using government-wide statements.


Chapter 11

  1. Explain the essential characteristics of financial audits by independent CPAs, including:
    The objective(s) of financial audits.
    The source and content of generally accepted auditing standards (GAAS).
    The types of audit reports that can be rendered.
    The contents of an unqualified and a qualified audit report.
    Required supplementary information.
  2. Explain what is meant by generally accepted government auditing standards (GAGAS), the source of GAGAS, and why GAGAS are much broader than GAAS.
  3. Explain the types of audits performed under GAGAS, including

Financial audits.

Attestation engagements.

Performance audits.

  1. Explain the characteristics of a single audit, including
    The purpose.

Which entities must have a single audit.

What auditing work is required.

How major programs are selected for audit.

What reports must be rendered, when, and to whom.

  1. Describe the role of audit committees


Chapter 13

  1. Explain the objectives of budgeting and cost determination in relation to measuring performance. Implications of GASBS 34 for public budgeting
  2. Explain the differences among various budgeting approaches.
  3. Identify the procedures involved in specific types of budgets including appropriation budgets, revenue budgets, cash budgets, and capital budgets.
  4. Describe budgeting for performance:
    Total quality management (TQM)
    Service efforts and accomplishments (SEA)
  5. Explain unique aspects of costing government services:
    Federal contracts and grants
    Activity-based costing (ABC)
    Cost accounting and expenditure accounting
  6. Describe the unique budget and cost issues in a nongovernmental, not-for-profit organization.


Chapter 14

  1. Distinguish not-for-profit organizations (NPOs) from entities in the governmental and commercial sectors of the U.S. economy.
  2. Identify the authoritative standards-setting body for establishing GAAP for nongovernmental NPOs.
  3. Explain financial reporting and accounting for NPOs.
    Required financial statements.
    Classification of net assets.
    Accounting for revenue, gains, and support.
    Accounting for expenses.
    Accounting for assets.
  4. Describe optional fund accounting.
  5. Identify the unique accounting issues of financially interrelated organizations.
  6. Prepare financial statements using SFAS No. 117.