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Wiley GAAP for Governments 2013: Interpretation and Application of Generally Accepted Accounting Principles for State and Local Governments by Warren Ruppel

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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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