Question

Explain the following as they relate to Governmental Accounting:

A: Standard setter for state and local governments

B: Definition of a Government

C: Three categories of funds

D: What funds follow the flow of current financial resources and modified accrual accounting

E: What funds follow the flow of economic resources and accrual accounting

F: Major fund reporting and the two tests

G: Major sections of a CAFR

H: Basic financial statements

I: Required Supplementary Information

J: How to record budgets and encumbrances

K: How to classify fund balance

L: Revenue and expenditure recognition

M: Interfund transactions

N: Accounting for inventories

O: Debt refunding

Answer 1

A. Government Accounting Standard Board (GASB) which is similar in function to the FASB, which was established in 1984 to set accounting and financial reporting standards for state and local government across the U.S.

B. A government is the system or a group of people governing an organised community, often a state.

C. The three categories of funds are-

(i) Government fund- It refers to the funds that are used by the govt. in yhe activities like police, fire, and other emergency services.

(ii) Proprietory fund- More than anything, poprietory funds operate like a business. They pertain to provide goods and services to the general public.

(iii) Fiduciary fund- It's normal for the govt. to hold assets in a trust to benefit individual. The funds held in an agency or by a trustee for others are fiduciary funds.

And D.) Modified accrual accounting A combines aspect of accrual basis accounting with wash basis accounting. The two main features of this type of Accounting are: - • Revenues are recognized when they become available and measurable • Ырлати аkе «сойда when liabilities are incurred.