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Interpol CPA
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Joined: 20 Aug 2010
Location: United States
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Posts: 203

Posted: 10 Oct 2010 at 14:50 \| IP Logged

Does anyone have a short and simple way of remembering when to recognize revenue and expense, and when to accrue and defer for Governmental and Not For Profit Entities?

My brain simply rejects anything other than standard GAAP full-accrual or cash basis.

My exam is tomorrow and I keep getting mixed up on these, so any help is greatly appreciated. My frustration/anxiety level is very high right now...

Thanks in advance!

__________________
AUD 7/6/2010 - 91
REG 8/3/2010 - 85
BEC 8/30/2010 - 84
FAR 10/11/2010 - 75
Passed all on 1st try, Becker only

abfabnyc
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Joined: 02 Aug 2010
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Posted: 10 Oct 2010 at 18:36 \| IP Logged

Interpol CPA wrote:

Does anyone have a short and simple way of remembering when to recognize revenue and expense, and when to accrue and defer for Governmental and Not For Profit Entities?

My brain simply rejects anything other than standard GAAP full-accrual or cash basis.

My exam is tomorrow and I keep getting mixed up on these, so any help is greatly appreciated. My frustration/anxiety level is very high right now...

Thanks in advance!

I always think of it in this way, it seems to make sense in my mind to me:

1. Gov't Funds are the only funds that use modified accrual and current resources model (use the GRASPP mnemonic if using Becker). Modified accrual in relation to revenues: are recognized when measurable AND available. Expenses: When legally due( i.e. if due 1/1/yr2, and its year end for Year 1, expense and accrue nothing!). If appropriated, encumber first, then when actually received, reverse encumbrance, then expense normally. Budgeting = Revenue and expenses normal balances are reversed.

2. Proprietary funds and Fiduciary Funds = Full Accrual always!
3. Gov't Wide F/S = Full Accrual Always!

4. Nonprofits = Full Accrual and follow FASB; Only Voluntary and Welfare orgs have to produce a statement of functional expenses

Hope this helps -- let me know if you need any other assistance

__________________
AUD 5/25/2010 - Passed
REG 7/15/2010 - Passed
BEC 8/28/2010 - Passed
FAR 10/23/2010 - Passed

And I am done!!!!!!!

Interpol CPA
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Joined: 20 Aug 2010
Location: United States
Online Status: Offline
Posts: 203

Posted: 10 Oct 2010 at 19:00 \| IP Logged

abfabnyc wrote:

Interpol CPA wrote:

Does anyone have a short and simple way of remembering when to recognize revenue and expense, and when to accrue and defer for Governmental and Not For Profit Entities?

My brain simply rejects anything other than standard GAAP full-accrual or cash basis.

My exam is tomorrow and I keep getting mixed up on these, so any help is greatly appreciated. My frustration/anxiety level is very high right now...

Thanks in advance!

This is very helpful. Thanks!

Good luck on your upcoming exam, I'm sure you'll pass

__________________
AUD 7/6/2010 - 91
REG 8/3/2010 - 85
BEC 8/30/2010 - 84
FAR 10/11/2010 - 75
Passed all on 1st try, Becker only

Blindbat7
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Joined: 01 Dec 2009
Location: United States
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Posts: 142

Posted: 11 Oct 2010 at 07:52 \| IP Logged

The easiest way I can think of to remember expensing something is when you receive the Voucher Payable, you'll be reversing the encumbrance and creating the expense.

Best of luck!

__________________
Using Bisk/CPA Excel
REG: 7/2/10 = 72 Retook 10/8/11
BEC: 8/31/10 = 78
FAR: 10/15/10= 85
AUD: 11/29/10= 82

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