2010 CAFR Washington state

ACC 410 - Government and Not-for-Profit Accounting - Analysis Questions

Government-Wide Statements

What are the total assets amounts for governmental activities? For business-type activities?

Total assists for governmental activities are $ 714,996,873 711, and for business-type activities are $ 791,933. The total is $ 1,426,788,806 this includes both governmental and business-type activities

Which function or program has the highest net cost?

Health care programs provided by the government have the highest net cost. It is because U.S. spent more than $2 trillion dollars on health care, or $7,026 per capita, in 2006. This is about twice as much per capita as countries such as Australia, Canada, the United Kingdom, Germany and Japan. In 1960, U.S. health spending accounted for just 5.2 percent of the gross domestic product; today it accounts for 16 percent of GDP.

Which function or program generates the highest revenue?

Typically, the largest revenue generators are individual income taxes, followed by sales taxes. Property taxes are mainly a local government tax, but many state governments impose property taxes, too. Each of these is further broken down into subcategories. For example, sales and gross receipts taxes are different from general sales and gross receipts taxes. The different taxes can also include those from the sale of alcoholic beverages, insurance premiums, motor fuels, public utilities and tobacco products.

What kinds of general revenues are available to cover the net cost of government activities?

All revenues are available to cover the net cost of government activities except those required to be reported as program revenues are general revenues. Examples of general revenue include:

all taxes, even those levied for a specific purpose

all other non-tax revenues that do not meet the criteria for classification as program revenues including:

interest not restricted to a specific program

grants and contributions not restricted to a specific program

royalties not restricted to a specific program

General revenues are reported after the net expense of the government's functions. The following types of financing sources from governmental and business-type activities are reported in the same manner as general revenues but are reported separately at the bottom of the statement of activities to determine the change in net assets for the reporting period:

contributions to permanent and term endowments

contributions to permanent fund principal

special and extraordinary items

transfers

Were the business-type activities, “profitable”? Explain your answer

Yes, Governmental business-type activities are profitable because they frequently operate in an environment that differs to a certain extent from the environment in which governmental-type activities operate. For example, business-type activities are generally characterized by an exchange relationship, manifested by user charges that may be based on the costs of providing a particular service. On the other hand, some business-type activities receive significant operating subsidies, capital grants, or taxes from the general government, diminishing the role of costs in establishing user charges. All governmental business-type activities, whether performed through separate, legally constituted entities or as departments of government, are nevertheless a part of government and are publicly accountable. The Board concluded, therefore, that the financial reporting objectives established for governmental-type activities are generally applicable to business type ...