53) The Federal Monuments Commission began operations on October 1, 2020. Prepare journal
form all entries that should be made in budgetary and proprietary accounts of the agency. (If no
entry is required for a transaction/event, select “No Journal Entry Required” in the first
account field.)
1. The Congress passed, and the President signed, a one-year appropriation for fiscal year 2021 for
the Monuments Commission in the amount of $30,000,000.
2. The OMB notified the agency of the following apportionments of the 2021 appropriation: first
quarter, $8,000,000; second quarter, $8,000,000; third quarter, $7,000,000; and fourth quarter,
$7,000,000.
3. The Commission Director allotted $1,500,000 for the operations of October 2020.
4. Commitments for goods and services not yet ordered or received were recorded in the amount of
$1,300,000.
5. Purchase orders and contracts for services were recorded for the month of October 2020 in the
amount of $1,250,000.
22
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54) Compute the missing amount in the following list of proprietary accounts of a federal
government agency.
Proprietary Accounts:
Accounts Payable
$
1,200,000
Operating/Program Expenses
12,400,000
Accumulated Depreciation-Plant and Equipment
9,200,000
Cumulative Results of Operations 10/1/2019
?
Appropriations Used—2020
12,400,000
Fund Balance with Treasury—2020
4,800,000
Accounts Receivable
200,000
Operating Materials and Supplies
3,200,000
Plant and Equipment
30,000,000
Unexpended Appropriations—2020
3,600,000
23
55) The Desert Conservation Agency was authorized by the United States Congress to commence
operations on October 1, 2020. Record the following transactions in general journal form, as they
should appear in the budgetary and proprietary accounts of the agency. For each entry indicate
whether it affects the budgetary accounts or the proprietary accounts. (If no entry is required for
a transaction/event, select “No Journal Entry Required” in the first account field.)
1. The agency received official notice that its one-year appropriation passed by the Congress and
signed by the President amounted to $350 million for operating expenses for the fiscal year and
$100 million for acquisition of capital assets during the year.
2. The Office of Management and Budget notified the agency that the entire appropriation had
been apportioned.
3. The head of the agency allotted $75 million for the first quarter’s operating expenses, and $25
million for equipment to be ordered during the first quarter.
4. Purchase orders and contracts for services recorded for the first quarter totaled $90 million (the
agency does not record commitments prior to placing orders or entering into contracts).
5. Total expenditures for the first quarter amounted to $70 million for operating expenses and $18
million for equipment, for which an obligation in the amount of $84 million had been previously
recorded (see item 4 above). The expenditures were all paid from fund balance with U.S. Treasury.
24
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Answer:
Difficulty: 3 Hard
Topic: Dual-track Accounting System
Learning Objective: 17-05 Understand and record budgetary and proprietary journal entries and
prepare financial statements for federal agencies.
Bloom’s: Apply
AACSB: Analytical Thinking
AICPA: FN Measurement
56) Explain the “dual-track” accounting system used by federal agencies and why it is needed.
57) Explain the components of net position.
58) Explain the GAAP hierarchy used by federal government agencies.
59) “Each federal government agency should maintain a General Fund and as many other funds
defined by the GASB as are appropriate.” Do you agree? Why or why not?
60) Describe the budgetary accounts used in federal agency accounting and the flow of budgetary
authority through those accounts.
61) Identify the office, officer, or department of the United States federal government that is
responsible for each of the following:
A. Appropriations.
B. Apportionments.
C. Allotments.
D. Obligations.
62) Explain the process of financial reporting of the U.S. Government as a whole. Does the federal
government receive an unmodified audit opinion on its financial report?
63) Describe the purpose of a management’s discussion and analysis (MD&A) in the general
purpose federal financial report of a federal agency.
64) What is the difference between entity assets and nonentity assets?
65) Describe accounting for federal social insurance programs. Comment on the adequacy of
current accounting standards in this area.
66) What is a Performance and Accountability Report (PAR)? Describe its purpose and contents.