Question

What are some similarities and differences between a General Fund and a Special Revenue Fund?

Answer 1

Ans: Differences between the General fund & Special Revenue Fund is as follows :-

1) All governments have a General Fund, which acts as a record of all assets & liabilities. Whereas the Special Revenue Fund is money set aside & earmarked for a particular purpose.

2) All the operating, administrative & day to day expenses are paid from General Fund & all the income not designated for specific purposes are kept in General Fund. Whereas all the revenue set aside for specific projects like Park, library etc are kept here & all the expenses pertaining to that project is directly booked here, so as to keep track of the expenses incurred with the funds allocated.

3)Since all the routine expenses are paid & general revenue are kept in General Fund, its typically larger than a special revenue fund which has a part of small sums set aside for specific project.

4) Money from a Special Revenue Fund is restricted by law or contract to be spent only on the purpose for which the fund was created.The General Fund doesn't have these limitations; any bill can be paid from it.