Exam 19: An Introduction to Accounting for State and Local Governmental Units

Enterprise funds and Internal service funds are Fiduciary Fund types.

The governmental fund accounting equation is Current Assets - Current Liabilities = Fund Balance.

The modified accrual basis of accounting is used for

The following are transactions for the city of Greenville. a.Issued $50,000 10-year bonds. b.Used $30,000 of the cash to buy a truck. c.Sold the truck that was replaced which had cost $28,000,for $2,000.The old truck was fully depreciated.Residual value is zero. d.Computed depreciation on the new truck for the year of $6,000. Required: Analyze the above transactions by using the accounting equation for a governmental fund.

Capital projects funds and debt service funds are governmental fund types.

Approved or authorized expenditures that provide legislative control over the expenditure budget are referred to as

Internal Service Funds differ from Enterprise Funds because Internal Service Funds

The following are transactions for the city of Greenville. a.Issued $50,000 10-year bonds. b.Used $30,000 of the cash to buy a truck. c.Sold the truck that was replaced which had cost $28,000,for $2,000.The old truck was fully depreciated.Residual value is zero. d.Computed depreciation on the new truck for the year of $6,000. Required: Analyze the above transactions by using the accounting equation for a proprietary fund.

Enterprise funds are used to account for business-type activities that serve primarily internal customers.

The following are transactions for the city of Franklin. a.Borrowed $20,000 by issuing a two-year note. b.Purchased equipment for $6,000 cash. c.Licenses for $700 were billed on account. d.Accrued employee salary costs of $7,000. e.Depreciation expense on equipment for year,$1,000. Required: Analyze the above transactions by using the accounting equation for a governmental fund.