I Like Accounting

Governmental Funds

Lesson
📖 Click Here for Lesson 📕 Click Here to Hide Lesson

There are three basic categories of governmental funds:

  • Basic Governmental Funds - Used for basic governmental operations.
  • Proprietary Funds - Used for government services that are run like a business and that charge a fee to customers.
  • Fiduciary Funds - Financials that are managed by the government but belong to another party.

Each type has subtypes. Understanding the purpose of each will prove helpful when working with government financials.

Remember that basic governmental funds use the modified accrual basis of accounting, not the full accrual.

Question
You've been asked to look over the internal service fund records for the local government.
What kind of fund is the internal service fund, and what is it used for?
Answer
📖 Click Here for Answer 📕 Click Here to Hide Answer

👉 Answer:

  • The internal service fund is a proprietary fund.

    It contains reimbursed service and product transactions between governmental units.
Random FAR 🔀 Try Again 🔁