Question

26.Explain the different purposes of the fund-based and government-wide financial statements of a state or local government and the primary differences between the fund-based and government-wide operating statements.

27. Describe the format prescribed by the Governmental Accounting Standards Board (GASB) for the government-wide statement of activities and how that format benefits financial statement users.

28.Distinguish among appropriations, allotments, expenditures, encumbrances, and expenses.

29.Explain why some transactions for governmental activities at the government-wide level are reported differently than transactions for the general fund. Provide some examples of transactions that would be recorded in the general journals of a) only the general fund, b) only government activities at the government-wide level, and c) both the general fund and the government activities at the government-wide level.

30.When preparing the statement or schedule of revenues, expenditures, and changes in fund balance on the budgetary basis, how are encumbrances outstanding at year-end treated if they will be honored in the upcoming year?

Answer 1

Answer to the question 26 :-

The fund-based and government-wide financial statements of a state or local government are all based on Non for profit enterprises. These are those enterprises which not evaluate their profits but work to serve people. These organisations work for providing means and way to public or needy people.

The primary differences between the fund-based and government-wide operating statements are as follows :-

Fund Based :- Fund based accounting records the financial resource of business in a manner that how income is recorded by various sources. Moreover, it tells the user how income related to the particular fund is used for that particular purpose. Mainly, this fund based statements depicts the current year fiscal performance of a firm.

Government Wide operating Statements :- it deals with the performance of whole business organisation. It deals with preparations of all statements like revenue and payment, income and expenditure and change in the fund based accounting which records how the fund are received and used by the business operations. Overall, it focus on making statements on fair accrual based accounting system that records how financial sources of the business are channelised.