Define the term fund as it relates to governmental accounting. Select one of the types of...

Define the term fund as it relates to governmental accounting. Select one of the types of funds described in the textbook and describe how it would be used by a governmental entity.

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Expert Solution

Solution:

A fund is a term generally used in Government accounting. A fund is a a sum of money saved or made available for a particular purpose.Fund accounting is a system of accounting widely used in non-business entities, such as nonprofits, government agencies, churches, hospitals and colleges and universities. Fund accounting differs from traditional business accounting, which focuses on identifying how successful an entity has been at creating profits. Since nonprofits and governments are not designed to generate profits, an alternative accounting method gives them a more fitting approach to tracking and reporting their finances.

Types of Funds

-General Fund Uses

- Special Revenue Funds

- Debt-Service Funds

- Capital Projects Funds

- Permanent Fund Uses

Special Revenue Funds -

The purpose of special revenue funds is to report money reserved for specific purposes. For example, governments sometime use this fund to report federal grants, road work or an emergency fund. This fund does not include trust funds, which come under the fiduciary fund.

ekkarill92 answered 1 year ago

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