Question

I. Tara Taylor has just been elected Mayor of Stars hollow. Although, Mayor Taylor is a brilliant attorney she has limited knowledge of financial accounting and no knowledge of government accounting. She has contacted your accounting firm because she is perplexed about fund accounting, modified accrual accounting and the financial resources measurement focus. She has asked you to draft her a letter explaining the basics of fund accounting. Required:

Draft a one to two page letter, explaining the basics of fund accounting. Your letter should be professional and cordial.

II. Write a one page synopsis on the attached article on the Flint Water crisis.

Answer 1

TARA TAYLOR

MAYOR OF STARS FELLOW

DEAR SIR,

I AM HERE TO TELLL YOU ABOUT BASICS OF FUMD ACCOUNTING.SIMPLY ,FUND ACCOUNTING REFERS TO THE MANAGEMENT AND ALLOCATION OF REVENUE THAT AN ORGANIZATION ACQUIRES THROUGH DONATIONS,TAX PAYMENTS,GRANTS AND OTHER PUBLIC AND PRIVATE RESOURCES.THE BASIC IDEA BEHIND FUND ACCOUNTING IS TO MONITOR AND DOCUMENT THE USE OF ASSETS THAT ARE DONATED BY OUTSIDE PARTIES

IN MANY CASES,DONATIONS MADE TO NON-PROFIT ORGANIZATIONS MUST BE USED TO PAY DOR A SPECIFIC PROJECT OR PURPOSE.AS A ACCOUNTANT YOU SHOULD HAVE TO KEEP TRACK OF THE RESTRICTIONS THAT ARE PLACED ON EACH DONATION THAT I9S ACQUIRED BY THE ORGANIZTION TO ENSURE THAT MONEY IS USED PROPERLY.

FUND ACCOUNTUNG ARE USED BY MANY ORGANIZATIONS SUCH S PRIVATE AND PUBLIC UNIVERSITIES,CHARITIES,CHURCHES AND RELIGIOUS INSTITUTIONS,ETC

SO,FUND ACCOUNTING ITSELF SAYS IT IS A ACCOUNTING OF FUNDS

THANKS

KAVITA SINGAL

CA FINALIST