CHAPTER 3
FUND ACCOUNTING FUNDAMENTALS
Introduction
Definition of Fund and the Purpose of Fund Accounting
Why Do Governments Use Fund Accounting?
Fund Accounting Under the GASBS 34 Reporting Model
How Is the Number of Funds to Be Established Determined?
A Synopsis of the Various Types of Funds Used by Governments for Accounting and Financial Reporting
Governmental Funds
General fund
Special revenue funds
Capital projects funds
Debt service funds
Permanent funds
Proprietary (Business-Type) Funds
Enterprise funds
Internal service funds
Fiduciary Funds
Pension and other employee benefit trust funds
Investment trust funds
Agency funds
Private-purpose trust funds
Major Funds
A Definition of Basis of Accounting and Measurement Focus
Basis of Accounting
Cash basis of accounting
Accrual basis of accounting
Modified accrual basis of accounting
Recognition and Measurement of Certain Fund Liabilities and Expenditures
Measurement Focus
A Synopsis of Basis of Accounting and Measurement Focus Used by Each Type of Fund
Summary
INTRODUCTION
To fully understand the accounting and financial reporting principles of state and local governments, financial statement preparers and auditors must be familiar with two key concepts: fund accounting and the basis of accounting and measurement focus used by funds. This chapter discusses the following information:
- A definition of fund and the purposes of fund accounting
- A synopsis of the various types of funds used by governments for accounting and financial ...
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