Chap017-baker 7

Chap017-baker 7 - Chapter 17 - Governmental Entities:...

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Chapter 17 - Governmental Entities: Introduction and General Fund Accounting 17-7 C17-2 (continued) b. Inventories are often ignored in governmental accounting because of an emphasis on budgeting revenue against outlays without looking behind the outlays to determine the extent to which they represent actual usage or consumption. Put another way, there is an emphasis on the cash or fiscal aspects rather than the operational aspects. This is easy to understand when one considers that general-fund expenditures for firemen's salaries and for the purchase of a new fire truck are accounted for in the same way. However, inventories are not wholly ignored in governmental accounting. In those funds in which accounting parallels commercial accounting practice, such as enterprise funds, inventories are taken into consideration. Similarly, in an internal service fund concerned with rendering service involving the consumption of supplies or the delivery of stores to other funds and activities, the inventories of supplies or stores are taken into consideration in computing
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This note was uploaded on 10/09/2011 for the course ACC 253 taught by Professor Strimling during the Fall '11 term at Harper.

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