Question

Here is information for a county government:

	Governmental funds	Enterprise funds
Total assets and deferred outflows	$ 45,000,000	$ 40,000,000
Total liabilities and deferred inflows	44,000,000	38,000,000
Total revenues	250,000,000	290,000,000
Total expenditures/expenses	242,000,000	260,000,000

The county has four special revenue funds, with the following characteristics:

	Beach preservation	Health education	Community protection	Emergency call service
Total assets and deferred outflows	$ 2,000,000	$ 4,000,000	$ 4,800,000	$ 1,900,000
Total liabilities and deferred inflows	1,000,000	3,500,000	1,800,000	1,100,000
Total revenues	20,000,000	30,000,000	30,000,000	26,000,000
Total expenditures	15,000,000	26,000,000	25,000,000	24,000,000

Which of these special revenue funds also meet the second criterion for reporting as a major fund in the governmental funds financial statements, and therefore will be reported as major funds?

	A.	Health education, community protection, and emergency call service funds
	B.	Beach preservation and health education funds
	C.	Health education and community protection funds
	D.	Health education fund only

Answer 1

The second criteria define major fund as when Total assets, liabilities, revenues, or expenditures/expenses of the individual governmental fund or enterprise fund are at least 5 percent of the corresponding total for all governmental and enterprise funds combined.

5% of total assets = 5% of (45+40)mn = 4,250,000

5% of total liabilities = $ 4,100,000

5% of total revenues = 27,000,000

5% of total expenditures = $ 25,100,000

Above threshold has to be checked in special revenue funds whether any fund crosses these these limits.

Community protection crosses assets threshold

Health education and community protection crosses total revenues threshold of 27,000,000.

Health education crosses expenditures threshold.

Hence, correct option is c. Health education and community protection funds