Chap018-baker 1

Chap018-baker 1 - Enterprise Fund Fund Measurement focus...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 18 - Governmental Entities: Special Funds and Government-Wide Financial Statements 18-1 CHAPTER 18 GOVERNMENTAL ENTITIES: SPECIAL FUNDS AND GOVERNMENT-WIDE FINANCIAL STATEMENTS ANSWERS TO QUESTIONS Q18-1 A governmental entity would use a special revenue fund rather than a general fund when the resources earmarked for the fund, such as federal or state government grants or special tax levies, are restricted for specific purposes. Q18-2 Operating budgets are prepared for the general fund, special revenue funds, and debt service fund. Capital budgets are prepared for the capital projects fund. Q18-3 Interest on long-term debt is accounted for in the debt service fund for only the interest that is due and legally payable as an expenditure. Interest is not accrued on the outstanding balance of the long-term debt. Q18-4 The major differences between a special revenue fund and an enterprise fund are Special Revenue
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Enterprise Fund Fund Measurement focus Current financial resources Economic resources Accounting basis Modified accrual Accrual Budgetary basis Operating budget None required Long-term assets No Yes Long-term debt No Yes Encumbrances Yes No Financial statements Governmental type Commercial type Q18-5 The basis of accounting used in the proprietary funds is the accrual basis because the focus of the governmental entity is on capital maintenance and income determination rather than budgetary spending authority. Q18-6 The financial statements that must be prepared for the governmental funds are the balance sheet and the statement of revenues, expenditures, and changes in fund balances. The financial statements that must be prepared for the enterprise funds are the statement of net assets, the statement of revenues, expenses, and changes in fund net assets, and the statement of cash flows....
View Full Document

Ask a homework question - tutors are online