CH 16 Accounting for STATE & LOCAL Government Differences between Gov & Private Sector accounting o Social needs – Gov has to serve the citizens o Does not have a general profit motive o Legal authorization through power of taxation o Use Budgetary accounting Two Sets of Financial Statements 1. Fund F.S Current Period Current Financial Resources Modified Accrual Accounting Citizens 2. Government Wide F.S Government as a whole All economic resources Accrual accounting Investors & Bold holders Fund Account / General Fund Fund Accounting – A system of accounting in which an organization resources are segregated into self-balancing sets of accounts established accord to legal and other restrictions on their use (Money in, Money out and balance in between) (Check book) Modified Basis of Accrual Accounting – Revenues when its available and measurable Expenditures (Expenses) when it’s not Classifications of Funds Governmental Funds 1. General Fund – Accounts for all financial resources except those accounted for in other funds 2. Special Revenue Fund – Accounts for proceeds from special revenue sources that are restricted for special purposes (Cig tax -> Stop smoking helpline) 3. Capital Project Fund – Accounts for financial resources for the acquisition or construction of major capital projects (Fixing roads) 4. Debt Service Fund – Accounts for accumulation of resources and the payments of general long-term debt 5. Permanent Fund – Accounts for resources that are restricted such that only earnings, but not principal maybe be used Proprietary Funds 6. Enterprise Fund – Accounts for operations of governmental units that charge or services provided to the general public (MTA) 7. Internal Service Fund – Accounts for the financing of goods or services provided by one department or agency to other governmental units Fiduciary Funds
8. Pension Trust Fund – Accounts for resources required to be held in trust for the members and beneficiaries of pension plans 9. Investment Trust Fund – Accounts for the external portion of investment pools reported by the sponsoring government 10. Private Purpose Trust Fund – Accounts for fund resources to be used to benefit specific individuals, private organizations, or other government 11. Agency Fund – Accounts for assets held by a government unit in an agency capacity for employees or other government units Budgets 1.
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