CMET438 CSU Wisconsin State Accounting Software Systems Proposal Please review the requirements for the Portfolio Project Options. Submit your selected op

CMET438 CSU Wisconsin State Accounting Software Systems Proposal Please review the requirements for the Portfolio Project Options.

Submit your selected option and write 1-2 paragraphs on the reasoning behind your selection, the course of action and timelines to tackle the assignment in Microsoft Word.

Include in your submission a timeline of milestones in your project and when you expect to complete each one.

This submission is worth 25 points.

Your paper must meet the following requirements:

Your written paper should be 1 page in length, not including the title page, and reference page, which must include.
Use terms, evidence, and concepts from class readings.
You need to cite at least 2 sources for this assignment, plus the textbook.
Your paper must be formatted according to APA writing style with double spaces. 1
page i
Essentials of Accounting for Governmental and Not-forProfit Organizations
Thirteenth
Edition
Paul
A.
Copley,
Ph.D.,
CPA
Professor
School of Accounting
James Madison
University
2
page ii
ESSENTIALS OF ACCOUNTING FOR GOVERNMENTAL AND NOT-FOR-PROFIT ORGANIZATIONS, THIRTEENTH EDITION
Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121. Copyright ? 2018 by McGraw-Hill Education. All rights reserved. Printed in
the United States of America. Previous editions ? 2015, 2013, and 2011. No part of this publication may be reproduced or distributed in any form or by
any means, or stored in a database or retrieval system, without the prior written consent of McGraw-Hill Education, including, but not limited to, in any
network or other electronic storage or transmission, or broadcast for distance learning.
Some ancillaries, including electronic and print components, may not be available to customers outside the United States.
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Library of Congress Cataloging-in-Publication Data
Names: Copley, Paul A., author.
Title: Essentials of accounting for governmental and not-for-profit
organizations / Paul A. Copley, Ph. D., CPA, KPMG Professor, Director,
School of Accounting, James Madison University.
Description: Thirteenth Edition. | Dubuque : McGraw-Hill Education, 2017. |
Revised edition of the author’s Essentials of accounting for governmental
and not-for-profit organizations, [2015].
Identifiers: LCCN 2016041136 | ISBN 9781259741012 (paperback : alk. paper)
Subjects: LCSH: Administrative agencies—United States—Accounting. |
Nonprofit organizations—United States—Accounting. | BISAC: BUSINESS &
ECONOMICS / Accounting / Governmental.
Classification: LCC HJ9801 .H39 2017 | DDC 657/.83500973—dc23
LC record available at https://lccn.loc.gov/2016041136
The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a website does not indicate an endorsement by the
authors or McGraw-Hill Education, and McGraw-Hill Education does not guarantee the accuracy of the information presented at these sites.
mheducation.com/highered
3
page iii
Preface
Thank you for considering the thirteenth edition of Essentials of Accounting for Governmental and Not-for-Profit Organizations. The
focus of the text is on the preparation of external financial statements. The coverage is effective in preparing candidates for the CPA
examination. I have used the text with traditional three-semester-hour classes, with half-semester GNP courses, and as a module in
advanced accounting classes. It is appropriate for accounting majors or as part of a public administration program.
The most notable change from earlier editions is in the presentation of college and university accounting. Both private sector and
public sector colleges are now presented in a single chapter, Chapter 11. Readers are taken through a representative set of transactions for
two similar-sized colleges. By examining both public and private institutions at the same time, it is easier to gain an appreciation for the
similarities and differences in these two groups.
Among other changes, the thirteenth edition is updated for recent professional pronouncements including:
GASB Statement No. 72: Fair Value Measurement and Application
GASB Statement Nos. 74 and 75: Financial Reporting for Postemployment Benefit Plans Other Than Pensions and Accounting and
Financial Reporting for Postemployment Benefits Other Than Pensions
GASB Statement No. 76: Hierarchy of Generally Accepted Accounting Principles for State and Local Governments
GASB Statement No. 81: Irrevocable Split-Interest Agreements.
Additionally, a discussion is provided in Chapter 10 of FASB Accounting Standards Update (2016-14) – Presentation of Financial
Statements of Not-for-Profit Entities. This newly issued standard becomes effective in 2018.
The text contains a discussion of the GASB Codification of Financial Reporting Standards.References are made throughout the text to
specific segments of the Codification. With the implementation of GASB 54 (Fund Balance Reporting), the last vestige of budgetary
accounting is phased out of government financial statements. The thirteenth edition continues to provide budget and encumbrance journal
entries, but presents these as distinct accounts that are not commingled with the accounts appearing in the basic financial statements. This
approach should reduce confusion sometimes experienced by students, particularly with the recording of encumbrances.
Among the more challenging aspects of state and local government reporting is the preparation of government-wide financial
statements. The approach demonstrated in the text is similar to that used in practice. Specifically, day-to-day events are recorded at the
fund level using the basis of accounting for fund financial statements. Governmental activities are recorded using the modified accrual
basis. The fund-basis statements are then used as input in the preparation of government-wide statements. The preparation of governmentwide statements is presented in an Excel worksheet. This approach has two advantages: (1) it is the approach most commonly applied in
practice, and (2) it is an approach familiar to students who have studied the process of consolidation in their advanced
page iv
accounting classes. State and local government reporting is illustrated using an ongoing example integrated throughout
Chapters 4 through 8 and 13.
Additional features of the text are available in Connect and the ebook, including:
An auto-gradable test bank and chapter-specific quizzes;
A continuous homework problem in Chapters 4 through 8 and 13, available in the instructor library in Connect;
An Instructor’s Guide;
PowerPoint slides;
Excel-based assignments; and
An additional practice set.
TestGen
TestGen is a complete, state-of-the-art test generator and editing application software that allows instructors to quickly and easily select
test items from McGraw-Hill’s TestGen testbank content and to organize, edit and customize the questions and answers to rapidly
generate paper tests. Questions can include stylized text, symbols, graphics, and equations that are inserted directly into questions using
built-in mathematical templates. With both quick-and-simple test creation and flexible and robust editing tools, TestGen is a test generator
4
system for today’s educators.
Acknowledgments
I am indebted to users of the textbook for their helpful suggestions, particularly: Susan Borkowski (La Salle University), Georgia Smedley
(University of Missouri–Kansas City) and especially to Mary Fischer (University of Texas at Tyler). I am especially appreciative of
Loretta Manktelow (James Madison University) for her thorough review and advice. Additional comments and suggestions are welcome
and may be addressed to: copleypa@JMU.edu.
Paul A. Copley
In memory of Ann Koch Copley and Joe Ernsberger.
5
page v
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page vi
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page vii
Contents
Preface iii
Chapter One
INTRODUCTION TO ACCOUNTING AND FINANCIAL REPORTING FOR GOVERNMENTAL AND NOT-FOR-PROFIT
ORGANIZATIONS 2
Generally Accepted Accounting Principles 4
Sources of Generally Accepted Accounting Principles 6
Definition of Government 8
Objectives of Accounting and Financial Reporting 9
Objectives of Accounting and Financial Reporting for State and Local Governmental Units 9
Objectives of Financial Reporting by the Federal Government 10
Objectives of Financial Reporting by Not-for-Profit Entities 11
State and Local Government Financial Reporting 11
Comprehensive Annual Financial Report 11
Measurement Focus and Basis of Accounting 13
Fund Structure for State and Local Government Accounting and Reporting 14
Number of Funds Required 17
Chapter Two
OVERVIEW OF FINANCIAL REPORTING FOR STATE AND LOCAL GOVERNMENTS 20
The Governmental Reporting Entity 21
Reporting by Major Funds 23
Overview of the Comprehensive Annual Financial Report (CAFR) 23
Introductory Section 24
Financial Section: Auditor’s Report 25
Management’s Discussion and Analysis (MD&A) 26
Statement of Net Position 28
Government-wide Statement of Activities 30
Governmental Funds: Balance Sheet 32
Governmental Funds: Statement of Revenues, Expenditures, and Changes in Fund Balance 34
Proprietary Funds: Statement of Net Position 36
Proprietary Funds: Statement of Revenues, Expenses, and Changes in Fund Net Position 38
Proprietary Funds: Statement of Cash Flows 40
Fiduciary: Statement of Fiduciary Net Position 42
Fiduciary: Statement of Changes in Fiduciary Net Position 42
Notes to the Financial Statements 44
Required Supplementary Information Other Than MD&A 46
Combining Statements 48
Statistical Information 48
Summary 49
page viii
Chapter Three
MODIFIED ACCRUAL ACCOUNTING: INCLUDING THE ROLE OF FUND BALANCES AND BUDGETARY
AUTHORITY 54
Modified Accrual Accounts 55
Balance Sheet Accounts 55
Financial Statement Activity Accounts 60
9
Budgetary Accounts 62
Expenditure Cycle 62
Revenue Recognition for Nonexchange Transactions 64
Summary 67
Appendix: Budgetary Accounting Illustrated 67
Budgets and Budgetary Accounts 67
Accounting for Revenues 69
Accounting for Encumbrances and Expenditures 70
Budget Revisions 74
Budgetary Comparison Schedule 74
Chapter Four
ACCOUNTING FOR THE GENERAL AND SPECIAL REVENUE FUNDS 83
Overview of Modified Accrual Accounting 84
Interfund Transactions 85
Interfund Loans 85
Interfund Services Provided and Used 87
Interfund Transfers 87
Interfund Reimbursements 87
Illustrative Case—General Fund 87
Use of Budgetary Accounts 88
Recording the Budget 88
Re-establishment of Encumbrances 89
Recording Prior-Year Property Taxes as Revenues 89
Tax Anticipation Notes Payable 89
Payment of Liabilities as Recorded 90
Encumbrance Entry 90
Recording Property Tax Levy 90
Collection of Delinquent Taxes 90
Collection of Current Taxes 91
Other Revenues 91
Repayment of Tax Anticipation Notes 92
Recognition of Expenditures for Encumbered Items 92
Payrolls and Payroll Taxes 92
Payment on Account and Other Items 93
Correction of Errors 93
Amendment of the Budget 94
Interfund Transactions 94
Write-off of Uncollectible Delinquent Taxes 96
Accrual of Interest and Penalties 97
Deferral of Property Tax Revenue 97
Special Item 97
Preclosing Trial Balance 97
Closing Entries 99
Year-End Financial Statements 101
Illustrative Case—Special Revenue Fund 102
Motor Fuel Tax Revenues 103
Expenditures for Road Repairs 105
Reimbursement to General Fund 105
Reimbursement Grant Accounting 105
Closing Entry 106
Year-End Financial Statements 106
Recognition of Inventories in Governmental Funds 107
Summary 108
10
Chapter Five
ACCOUNTING FOR OTHER GOVERNMENTAL FUND TYPES: CAPITAL PROJECTS, DEBT SERVICE, AND
PERMANENT 118
Capital Projects Funds 120
Illustrative Case 121
page ix
Debt Service Funds 126
The Modified Accrual Basis—As Applied to Debt Service Funds 126
Additional Uses of Debt Service Funds 127
Debt Service Accounting for Serial Bonds 127
Illustrative Case—Regular Serial Bonds 127
Other Issues Involving Payment of Long-Term Debt 130
Debt Service Accounting for Deferred Serial Bonds 130
Debt Service Accounting for Term Bonds 130
Bond Refundings 130
Permanent Funds 131
Financial Reporting for Governmental Funds 133
Financial Statements—Governmental Funds 133
Summary 137
Chapter Six
PROPRIETARY FUNDS 146
Internal Service Funds 148
Establishment and Operation of Internal Service Funds 149
Illustrative Case—Supplies Fund 149
Other Issues Involving Internal Service Funds 153
Risk Management Activities 153
Implications for Other Funds 154
Enterprise Funds 154
Illustrative Case—Water Utility Fund 156
Proprietary Fund Financial Statements 161
Statement of Net Position 162
Statement of Revenues, Expenses, and Changes in Fund Net Position 162
Statement of Cash Flows 164
Environmental Liabilities 167
Accounting for Municipal Solid Waste Landfills 167
Pollution Remediation Costs 168
Summary 168
Chapter Seven
FIDUCIARY (TRUST) FUNDS 182
Agency Funds 185
Tax Agency Funds 185
Accounting for Tax Agency Funds 186
Financial Reporting for Agency Funds 187
A Note about Escheat Property 187
Private-Purpose Trust Funds 189
Accounting for Investments 189
Illustrative Case—Private-Purpose Trust Funds 190
Investment Trust Funds 192
Public Employee Retirement Systems (Pension Trust Funds) 193
Accounting and Reporting for Defined Benefit Pension Plans 194
11
Additional Disclosures 197
Other Postemployment Benefit Trust Funds 200
A Note about IRS 457 Deferred Compensation Plans 202
A Final Comment on Fund Accounting and Reporting 202
Chapter Eight
GOVERNMENT-WIDE STATEMENTS, CAPITAL ASSETS, LONG-TERM DEBT 213
Conversion from Fund Financial Records to Government-wide Financial Statements 214
Capital Asset–Related Entries 216
Long-Term Debt–Related Entries 221
page x
Adjusting to Convert Revenue Recognition to the Accrual Basis 222
Adjusting Expenses to the Accrual Basis 226
Adding Internal Service Funds to Governmental Activities 226
Eliminating Interfund Activities and Balances within Governmental Activities 229
Worksheet to Illustrate the Adjustments 232
Government-wide Financial Statements 232
Statement of Net Position 232
Statement of Activities 235
Required Reconciliation to Government-wide Statements 238
Summary 240
Appendix: Accounting for Capital Assets and Long-Term Debt in Governmental Activities 241
Accounting for General Capital Assets, Including Infrastructure 241
The Modified Approach for Reporting Infrastructure 242
Collections 243
Asset Impairment 244
Accounting for Long-Term Debt 244
Types of General Long-Term Debt 245
Debt Disclosures and Schedules 245
Chapter Nine
ADVANCED TOPICS FOR STATE AND LOCAL GOVERNMENTS 260
Reporting by Special-Purpose Entities 261
Special-Purpose Governments Engaged in Governmental Activities 261
Special-Purpose Governments Engaged Only in Business-type Activities 263
Special-Purpose Governments Engaged Only in Fiduciary-type Activities 265
Special Assessments 265
Acquisition of Capital Assets by Lease Agreements 266
Accounting for Equipment Acquired under Capital Leases—Governmental Activities 266
Accounting for Equipment Acquired under Capital Leases—Businesslike Activities 268
Leases: Proposed Changes 269
Employer Reporting for Pensions 269
Reporting of Pension Liabilities 269
Reporting of Pension Expenditure—Governmental Funds 270
Reporting of Pension Expense—Accrual Basis (Economic Resources Focus) Statements 270
A Final Note: Pension Discount Rates 274
Employer Reporting for Other Postemployment Benefits 274
Summary 275
Chapter Ten
ACCOUNTING FOR PRIVATE NOT-FOR-PROFIT ORGANIZATIONS 281
Organizations Covered in This Chapter 283
12
Overview of Not-for-Profit Accounting 283
Three Classes of Net Assets 283
Financial Reporting 284
Note Disclosures 285
Accounting for Contributions, Including Reclassifications of Net Assets 285
Reporting of Expenses and Assets 286
Special Topics: Accounting for Contributions 287
page xi
Illustrative Transactions and Financial Statements 289
Beginning Trial Balance 289
Transactions 290
Financial Statements 297
Alternative Procedure for Recording Fixed Assets 302
Performance Evaluation 302
Mergers and Acquisitions 304
Changes in Not-for-Profit Reporting 305
Summary of Not-for-Profit Accounting and Reporting 306
Chapter Eleven
COLLEGE AND UNIVERSITY ACCOUNTING 317
Overview of College and University Accounting 318
Financial Statements 319
Revenue and Expense Classification 319
Illustrative Case—Comparison of Public and Private Colleges 322
Illustrative Case—Journal Entries 323
Illustrative Case—Closing Entries 330
Illustrative Case—Financial Statements 331
Split-Interest Agreements 335
Summary: College and University Accounting 339
Chapter Twelve
ACCOUNTING FOR HOSPITALS AND OTHER HEALTH CARE PROVIDERS 345
Accounting and Reporting Requirements of the Health Care Guide 347
Financial Statements 347
Revenues 349
Classifications 349
Illustrative Transactions and Financial Statements 349
Beginning Trial Balance 350
Illustrative Statements for Private Sector Not-for-Profit Health Care Entities 357
Financial Reporting for Governmental Health Care Entities 358
Financial Reporting for Commercial (For-Profit) Health Care Entities 361
Summary: Health Care Accounting and Reporting 362
Chapter Thirteen
AUDITING, TAX-EXEMPT ORGANIZATIONS, AND EVALUATING PERFORMANCE 369
Governmental Auditing 370
The Single Audit Act and Amendments 376
The Sarbanes-Oxley Act 378
Tax-Exempt Organizations 379
Applying for Tax-Exempt Status 380
Federal Filing Requirements 381
State Filing Requirements 383
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Unrelated Business Income Tax (UBIT) 383
IRS Oversight 384
Summary and Some Conclusions Related to Exempt Entities 385
Evaluating Performance 385
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