Why are governments required to produce both fund and government-wide financial statements? What is the major...

Why are governments required to produce both fund and government-wide financial statements? What is the major difference between the two sets of statements?

Expert Solution

Key differences between governments to produce Fund & Government wide financial statements are as follows:

Governments are with too many responsibilities and Duties such as:

Economic development
Protection of human rights
Maintenance of external relations
To provide employment opportunities
Maintenance of law and order
Protection of lives and properties
Promote democracy and social justice
Provision of social welfare services etc...

To comply with above mentioned responsibilities, governments required to produce fund. whereas Government wide financial statements are produced to report all financial transactions for the government for the year.

Sole purpose of this investment (produce fund) by government is not to make profit. rether its for comply with it's responsibilities and duties. whereas Government wide financial statements are produced for showing the revenue collected and the amounts that the government spent.
Types of government funding may be Capital Project funding, Funding for research programe, Startup Funding, Funding for Defence, Healthcare, Education, Agricultural etc. whereas Government wide financial statements shows the complete picture of inflow and outflow of fund.
Funding by government is an continious process whereas Government wide financial statements are put before assembaly at perticular interval of time.

ekkarill92 answered 2 years ago

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