AAAE ACE Airport Finance Mod 2 |Questions and answers with 100% correct solutions | Graded A+

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Cash Basis Accounting ✔✔records revenues when cash is received and expenses when cash is paid Accrual Basis Accounting ✔✔reporting income when it is earned and expenses when they are incurred ... , does not matter when cash is exchanged Modified Accrual Accounting ✔✔recognized 1) revenues when the resulting current financial resources are both measurable and available to be used and 2) expenditures when they are incurred GAAP Principles ✔✔Recognition, measurement, presentation, disclosure Operating Budget ✔✔budget for day-to-day expenses covering the span of a year Capital Budget ✔✔budget for major capital, or investment, expenditures covering up to 5-10 years, also subject to depreciation on accounting records Budget Cycle ✔✔Planning, preparation, approval, execution (or expenditure), analysis, audit Incremental Budget ✔✔Increases the previous year's budget by a percentageZero-Based Budget ✔✔allocates resources as if each budget was brand new not taking into account last year's budget Management by Objectives (MBO) ✔✔Setting goals and then creating a budget to meet those goals Activity-Based Budgeting (ABB) ✔✔Budgeting approach that focuses on the budgeted cost of the activities necessary to accomplish functions. 1. Identify activities and their cost drivers 2. Forecast number of units of cost driver for required activity level 3. Calculate the cost driver (cost per unit of activity) Statement of Net Position/Assets ✔✔Balance Sheet Statement of Revenues, Expenses, and Changes in Net Position/Assets ✔✔Income Statement Statement of Cash Flows ✔✔Statement of Cash Flows Audit - unqualified opinion ✔✔Financial statements are presented fairly in accordance with GAAP Audit - qualified opinion ✔✔Auditor is unable to state financial statements in compliance with GAAP either due to a few misstatements, portions are not presented in accordance with GAAP, or auditor was unable to audit one or more areas of financial statements, but rest are compliant with GAAPAudit - Disclaimer of Opinion ✔✔Given by auditor when unable to provide opinion when limited evidence available fir which to base an opinion Audit- Adverse Opinion ✔✔Given by auditor when they feel financial reports are materially misstated. Financial reports not in accordance with GAAP and not accurate or reliable Audit Process ✔✔1. Planning/Preparation 2. Entrance Conference 3. Fieldwork 4. Draft Report 5. Exit Conference 6. Draft Report 7. Final Report Single Audit — formerly known as A-133 Audit ✔✔This audit is required for all non-federal government agencies and non-profit organizations that expend more than $750,000 in federal grants in a year! PFC Audit ✔✔Audit that can be separate or part of single audit. Required fir airports that charge PFC charges. If any finding found in audit, following corrections must be made: 1. Name(s) of contact person(s) responsible fir corrective plan 2. The corrective action planned 3. The anticipated completion dateCAFR — Comprehensive Annual Financial Report ✔✔GASB recommended financial report of all funds spent by government entity PFC Report ✔✔Quarterly report stating PFC revenue earned, the PFC level for each project, and each project's schedule SF-425 Federal Financial Report - AIP Grant Report ✔✔Federal funds expended, airport sponsor's share obligation, indirect expenses such as engineers and consultants Form 126 - Financial Governmental Payment Report ✔✔Requires airports to report to the FAA the money spent on government services like police, HR, accounting, etc. so that funds aren't being diverted away illegally, that services are being paid fir at fair market value Form 127 ✔✔Standardized form to report revenues, expenses, and other information to the FAA so that airports' financial statements are similar and not too different from each other [Show More]

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