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Anna Yetkie
Professor Clark
BUS 611-91 Non-profit/government Accounting
April 16, 2010
use for financial accounting. Both government and non-profits have no profit motive; therefore
fund accounting is used for accountability and transparency. Fund accounting consists of
separate fiscal and accounting entities used to record assets, liabilities, revenues and
expenditures associated within certain functions. It also includes special reporting statements
The general fund is the primary fund in most governments. This fund is used to record
all revenues, expenditures, assets and liabilities not required to be reported somewhere else.
The special revenue fund is a fund that is used to account for special revenue sources
which are designated for use for specific purposes. A common example of revenues that are
accounted in the special revenue funds are for grants received from another form of
government. “For example, a city receives a state grant to build a new recycling center (Ruppel
62).”
The capital project fund is used to account for the creation of capital projects to be used
for general government operation. For example, the construction of school buildings would
The debt service fund is used to for long-term debt committed by a government. In this
fund would be recorded the payment of principal and interest. The revenues from these
The permanent fund was defined by GASBS 34. It is used to record a permanent
endowment provided the government. The endowment itself is not to be spent. Instead, interest
Proprietary funds operate on an accrual basis. Governments use the accrual basis rather
than the modified accrual basis of accounting. The two types of proprietary funds are enterprise
Enterprise funds are used to account for agencies of the government, which produce a
self-financing service for external customers. Examples might include a fund water, sewer
funds, and electric utility. Since this is supposed to emulate a private firm, these funds are
generally self-contained, including all debt, and capital construction transactions (Ruppel 78).
The internal service fund is used to record transactions for a government agency which
department, computer support or a print shop. Other government agencies are supposed to be
Fiduciary funds are used to account for assets held in trust by the government for the
benefit of individuals or other entities. “There are four types of fiduciary funds: pension,
investment trust funds, private-purpose trust funds, and agency funds (Ruppel 83).
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There are two government-wide financial statements, which are the Statement of Net
The statement of net assets is similar to the private sector’s balance sheet. It includes a
The statement of net activities shows the taxpayers a summary of transactions from “the
beginning net asset number to the ending net asset number reported on the statement of nets
There are two fund financial statements: The Balance Sheet, Statement of Revenues,
The balance sheet shows “the assets, liabilities and fund balances of the governmental
The statement of revenues, expenditures, and changes in fund balance is separated into
three categories: revenues, expenditures and uses of funds. This report shows the changes in
Government and non-profit entities are service focused rather than driven by profit
revenues. Fund accounting is a detailed accounting of funds used for accountability and
transparency.
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Works Citied
Ruppel, Warren. "Governmental Accounting Made Easy, 2nd Edition." John Wiley & Sons, Inc.,