Governmental Accounting Funds
questions and actual answers.
Governmental Funds ANS -Governmental funds focus on the current financial resources raised and
expended to carry out general government purposes. (1) General fund (2) Special revenue fund (3) Debt
service fund (4) Capital project fund (5) Permanent fund. They use MODIFIED ACCRUAL accounting.
Capital assets and long-term debt are not reported on the fund statements for the governmental funds.
General Fund ANS -The one fund all entities must have. This fund accounts for most taxes paid by
citizens, and most of the costs of administration, public safety, and other basic functions.
Special Revenue Fund ANS -An account established by a government to collect money that must be used
for a specific purpose.
Capital Project Fund ANS -Accounts for resourced used for building Capital assets for governmental
activities only. one fund is required for each project.
Debt Service Fund ANS -committed, or assigned for the payment of interest and principal on tax-
supported long-term debt, including that payable from special assessments in which the government
assumes some level of liability.
Permanent Fund ANS -"Governmental fund that is restricted so that only earnings, not principal, may be
expended, and for purposes to benefit the government and its citizenry." Must be spent for purposes
designated by the donor to provide additional municipal/governmental services.
Proprietary Funds ANS -Are used to account for a government's continuing business-type organizations
and activities. All assets, liabilities, equities, revenues, expenses, and transfers pertaining to these
entities should break-even in the long-term.
Enterprise funds ANS -accounts for parts of the government that sells goods or services to citizens, such
as water, sewer, landfill and electric funds. These are business-like activities.
, Internal Service Funds ANS -Similar to Enterprise funds, except goods and services are provided only to
other funds within the government. For example: computer, legal or accounting services, motor pools,
etc.
Fiduciary Funds ANS -Act as a trustee or agent. Accounting method is full accrual. The equity accounts
used are "net assets."
Agency Funds ANS -- Used to account for resources that are being held by the government but are
waiting to be transferred to another fund or to a party outside the government.
For example, taxes collected and held by a municipality for a school district.
Employee Pension Trust Fund ANS -Take money transferred from General Fund, invest it and pay out to
retirees
Investment Trust Fund ANS -This is an investment vehicle for other funds. that combines resources and
invests them to obtain a higher yield, greater manager expertise, etc.
fiduciary fund.
Private Purpose Trust Fund ANS -The counter part to permanent funds. used to report resources that
are legally restricted in that only the earnings, not the principal, can be used to support govt programs
that benefit individuals, a subset of the population, private organizations or other govt. (ex police men
who are disabled during service or scholarships, private museum maintenance, etc.)
Reciprocal or exchange transactions ANS -financial transaction occurring between two funds within the
same government institution that are generally not included in its annual financial statements.
Transactions include internal revenue, expense reimbursements, interfund loans, fund additions, and
deductions.
Nonreciprocal (non-exchange) transaction ANS -There is no equivalent flow of assets in return and no
repayment is required. These transfers are part of "other financing sources/uses) on the fund statement
of revenue, expenditure and change in fund balance.
When the terms of a loan exceed 12 months ANS -The liability should be credited to OFS-Loans
questions and actual answers.
Governmental Funds ANS -Governmental funds focus on the current financial resources raised and
expended to carry out general government purposes. (1) General fund (2) Special revenue fund (3) Debt
service fund (4) Capital project fund (5) Permanent fund. They use MODIFIED ACCRUAL accounting.
Capital assets and long-term debt are not reported on the fund statements for the governmental funds.
General Fund ANS -The one fund all entities must have. This fund accounts for most taxes paid by
citizens, and most of the costs of administration, public safety, and other basic functions.
Special Revenue Fund ANS -An account established by a government to collect money that must be used
for a specific purpose.
Capital Project Fund ANS -Accounts for resourced used for building Capital assets for governmental
activities only. one fund is required for each project.
Debt Service Fund ANS -committed, or assigned for the payment of interest and principal on tax-
supported long-term debt, including that payable from special assessments in which the government
assumes some level of liability.
Permanent Fund ANS -"Governmental fund that is restricted so that only earnings, not principal, may be
expended, and for purposes to benefit the government and its citizenry." Must be spent for purposes
designated by the donor to provide additional municipal/governmental services.
Proprietary Funds ANS -Are used to account for a government's continuing business-type organizations
and activities. All assets, liabilities, equities, revenues, expenses, and transfers pertaining to these
entities should break-even in the long-term.
Enterprise funds ANS -accounts for parts of the government that sells goods or services to citizens, such
as water, sewer, landfill and electric funds. These are business-like activities.
, Internal Service Funds ANS -Similar to Enterprise funds, except goods and services are provided only to
other funds within the government. For example: computer, legal or accounting services, motor pools,
etc.
Fiduciary Funds ANS -Act as a trustee or agent. Accounting method is full accrual. The equity accounts
used are "net assets."
Agency Funds ANS -- Used to account for resources that are being held by the government but are
waiting to be transferred to another fund or to a party outside the government.
For example, taxes collected and held by a municipality for a school district.
Employee Pension Trust Fund ANS -Take money transferred from General Fund, invest it and pay out to
retirees
Investment Trust Fund ANS -This is an investment vehicle for other funds. that combines resources and
invests them to obtain a higher yield, greater manager expertise, etc.
fiduciary fund.
Private Purpose Trust Fund ANS -The counter part to permanent funds. used to report resources that
are legally restricted in that only the earnings, not the principal, can be used to support govt programs
that benefit individuals, a subset of the population, private organizations or other govt. (ex police men
who are disabled during service or scholarships, private museum maintenance, etc.)
Reciprocal or exchange transactions ANS -financial transaction occurring between two funds within the
same government institution that are generally not included in its annual financial statements.
Transactions include internal revenue, expense reimbursements, interfund loans, fund additions, and
deductions.
Nonreciprocal (non-exchange) transaction ANS -There is no equivalent flow of assets in return and no
repayment is required. These transfers are part of "other financing sources/uses) on the fund statement
of revenue, expenditure and change in fund balance.
When the terms of a loan exceed 12 months ANS -The liability should be credited to OFS-Loans
