Quiz 9: Advanced Topics for State and Local Governments

Business

The solution to this problem will differ from student to student, assuming each has a different college financial report.

Governmental funds balance sheet Government activities are financed by taxes, intergovernmental revenue and other revenue. The revenue from these activities are reported in government fund and internal service fund. Special purpose government fund undertakes one single type of government activity and these funds can combine fund and government wide financial statement. This is undertaken by preparing reconciliation. In case of special purpose entity balance sheet or statement of net assets is prepared. The first three column of statement is prepared using current financial resources measurement focus and modified accrual basis of accounting. After that adjustment column is added to convert to economic resource measurement and accrual basis of accounting which is needed in government wide statement. a. In case of government engaged in governmental type of activities need not prepare separate fund and government wide statement. They can combine both the statement together. Also, special purpose government engaged in only governmental type of activities are required to provide complete financial reporting which is part of their financial statement. They need to provide notes to financial statement, details on enterprise fund statement and other supplementary information. b. In case of government engaged in only business type activities are required to prepare proprietary funds statement of net assets, statement of revenue, expenses and changes in fund net assets and cash flow statement. c. In case of governments engaged in only fiduciary type of services the statement required to be prepared include statement of fiduciary net assets, changes in fiduciary net assets, notes to financial statement.

Governmental funds balance sheet Government activities are financed by taxes, intergovernmental revenue and other revenue. The revenue from these activities are reported in government fund and internal service fund. Special purpose government fund undertake one single type of government activity and these fund are allowed to combine fund and government wide financial statement. This is undertaken by preparing reconciliation. In case of special purpose entity balance sheet or statement of net assets is prepared. The first three column of statement is prepared using current financial resources measurement focus and modified accrual basis of accounting. After that adjustment column is added so as to convert to economic resource measurement and accrual basis of accounting which is needed in government wide statement. Prepare combined governmental funds balance sheet/Statement of net assets as shown below img The inter-fund balance would eliminated in government wide statement and receivables would set off the payable. The capital investment, long term compensated absences and notes due in more than one year would be reported separately in government wide statement and thus are shown as adjustment. Following shows the working img