The basic Revenue Receipts J/Es (in general fund) is similar to for-profit world.
For these exams, I tried to find some connective tissue and logic. To keep things straight, I summarized the following in my FAR notes:
(1). Also not an entry but you have to know what type of income it is. I have a memory trick. It's lame and stupid but so is this topic at times. Think of PREIST when you think of Property taxes, REal estate, Income taxes, Sales, Taxes from other governments. Some taxes, like some priests are crooked like the spelling I used and require more steps. Some priests are not crooked and can be treated more easily
(2a) For PREIST income. Not an entry, but you must know the basics that the revenue recognized is both available (considered available to pay current expenditures) and measurable (collectible within 60 days of end of fiscal year). This isn't too dissimilar to the constructive receipt doctrine. Except, that governmental accounting is a current resources focus. In other words, available and measurable. Then, you have to reconcile this to the government wide financials, but this is beyond your question.
(2b) Impose a levy (eg 108G) in real estate taxes and estimate an uncollectible amount (eg 8G). Revenue can be considered available and measurable, if coll wi 60 days. Thus DR Taxes Receivable for the imposed levy bc it is the tax (or sales of a profit company) due. Unlike the traditional for-profit entry for initial income recognition you have 2 not one CRs–One for a Estimated Uncollectible of 8G and another for the balance to a Revenue Account.
(2c) Once you have collections, you make 2 entries. First, Increase cash (DR) and reduce the receivable (CR) for the receipts (eg 106G). This is similar to cash proceeds received in for profit world. The added step is to Reduce the collectible account and increase the revenue account, by a plug figure. This requires a use of a T Account. Est Coll has a credit balance of 8. The balance of the Receivable account after part (2) and the first collection entry is 2G (108 tax levy – 106 actual collections); this balance becomes the Ending Balance of Est Collections; solve for X un Estimated Collections acct for the balance of the second entry here. This second step has a similar machination to adjusting AR for recoveries under Balance Sheet approach for profit companies.
(3) For non-PREIST income, it becomes simpler, IMO. Eg A govt coll collects revenue from on-street parking meters. Debit Cash and Cr Revenue for proceeds received.
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Hopefully that helps clear things up a little. I tried my best to approach each test logically and understand the logic for the various accounting treatments rather than just try to memorize. In practice, I wound up memorizing it.
Also, if I got something wrong, please let me know on here.
Best of luck, all.
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