Governmental Funds Financial Statements

Question 1

Financial statements of a governmental fund include

Answer 1

Balance sheet

Statement of Revenues, expenditures and changes in fund balance

Question 2

Balance sheet

Answer 2

Assets and deferred outflows of resources section
Liabilities deferred inflows of resources and fund balances section
Has a column from left to right of the general fund, special revenue fund, capital projects fund, debt service fund, a column that totals all non major funds and then a totals column.

Question 3

Statement of revenues expenditures and changes in fund balance

Answer 3

Revenues section
Expenditures section
Shows the changes in fund balances at the bottom
Has separate columns for each major fund and a column showing combined non-major funds like the balance sheet

Governmental fund statements don’t include a statement of cash flows

Question 4

Budget comparison

Answer 4

Budget to actual comparison is required for the general fund, and any annually budgeted major special revenue fund.

Question 5

General fund

Answer 5

Required fund. Uses modified accrual accounting and uses budgetary and encumbrance accounting. Revenues come from taxes, licenses and permits, charges for services, fines. Remember that revenue must be measurable and available. Property tax revenues are recorded after they are levied at the estimated collectible amount. Expenditures are salaries, operating expenses, capital outlays for buildings and improvements, debt service such as principal and interest payments.

Question 6

Special Revenue Funds

Answer 6

These are for revenue sources that are committed to a specific purpose other than debt service or a capital project. They use modified accrual accounting. They use budget and encumbrance accounting.

Question 7

Debt service funds

Answer 7

These are for resources used to pay interest and principal on general long-term debt. The life of the fund is tied to the underlying debt. They use the modified accrual basis of accounting.

Question 8

Capital Project Funds

Answer 8

These are used for resources that are restricted for capital outlay for buildings, land, or improvements. These uses modified accrual basis.

Question 9

Permanent funds

Answer 9

Resources held in trust by the government for the benefit of the government or its citizens. The principal is required to remain intact. Earnings are transferred to the general fund or to a special revenue fund.