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Governmental Funds

Lesson
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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
Some of the state government's accounting records seem to be missing labels.
What kind of fund's definition is as follows: It is used to hold money for a short period of time before being remitted, in part or in whole, to another governmental entity.
Answer
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👉 Answer:

  • It's the custodial fund, a type of fiduciary fund.
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