Comparing and Contrasting Governmental Entity

Comparing and Contrasting Governmental Entity

Crystal D Johnson

ACG 5516-1

January 26, 2013

Governmental entities must be responsive to a number of different groups and organizations, including elected officials, other units of governments, investors, creditors, and citizens that are focused on monitoring their activities. For governmental entities to ensure the proper segregation of resources and to maintain proper accountability, an entity’s accounting system should be organized and operated on a fund basis. Granof and Khumawala, stated, “Governmental type funds are maintained to account for governments’ operation and financing activities”. Governmental funds unique features are that of expenditures controlled by legally adopted annual budgets, which cash oriented and short run in nature. There are five primary types of governmental funds. They are as followed: general fund, special revenue fund, debt service fund, capital projects funds, and permanent funds.

A governmental unit has one and only one general fund. This is the primary accounting entity of government, which is more equal than the others. It is maintained by all state and local governmental entities. Unless a financial resource is required to be accounted for in a different fund type, it is accounted for in the general fund. This includes general government support, police, fire, parks and recreations, education and social services. “General funds accounts for all resources that are not required to be accounted for in other funds”( Granof and Khumawala). All of its accounts are unassigned resources. Economic resources such as land, building, and equipment are not recorded by these funds. Liabilities are incurred for normal operations that will be liquidated by use of fund assets are recorded. Total inflows and outflows for general funds are reported in a statement of revenues, expenditures and fund balances. Revenues and other financing sources are recognized if measurable and available....