Explain how to convert fund specific financials on a modified accrual accounting basis to a full...

Explain how to convert fund specific financials on a modified accrual accounting basis to a full accrual basis.

Solutions

Expert Solution

Process of conversation of fund specific financials on a modified accrual to a full accrual basis:-

Government fund entries are recorded as per modified accrual basis and government wise statement prepared on full accrual basis .

Example of fund specific financial : Transfer $ 2,000,000 from general fund to a specific fund ( debt service fund)

In modified accrual accounting journal entries are as follows

SL NO	Detais	amounts ( Dr)	Amounts ( Cr)
1	Transfer out to debt service fund	$ 2,000,000
	Cash		$ 2,000,000
2	Cash	$ 2,000,000
	Transfer in from general fund		$ 2,000,000

In full accrual basis there will be only one adjustment journal entry :-

SL NO	Details	Amounts (Dr)	Amounts (Cr)
1	Transfer out to debt service fund	$ 2,000,000
	Transfer in from general fund		$ 2,000,000

Ultimately in government wise financial statement there will be no effect for it in year end .Because Cash account is nullified by crediting and debiting simultaneously and both the above mention account are settled against each others.

ekkarill92 answered 9 months ago

Next > < Previous

Related Solutions

P. 8–1 Government‐wide statements are on a full accrual basis; fund statements are on a modified...

P. 8–1 Government‐wide statements are on a full accrual basis; fund statements are on a modified accrual basis. The East Eanes School District engaged in or was affected by the following events and transactions during its fiscal year ending June 30, 2021. Teachers and other personnel earned $350,000 in vacations and other compensated absences that they did not take but for which they expect to be paid in the future. The district settled a suit brought by a student, agreeing...

From the perspective of a bureaucrat, which government accounting method (Cash Basis, Modified Accrual or Full...

From the perspective of a bureaucrat, which government accounting method (Cash Basis, Modified Accrual or Full Accrual) is more feasible for each revenue source? Explain your response. State Income Taxes D. Motor Fuel Taxes G. Gaming Fees (casinos) Public Utility Fees E. Licenses and Fees H. Block Grants Donations F. Sales Taxes I. Property Taxes

Why do goverments use modified accrual for general fund statements and full accrual for government wide...

Why do goverments use modified accrual for general fund statements and full accrual for government wide statements?

Give an example of cash accounting, accrual accounting, and modified accrual accounting?

Cash Basis vs. Accrual Basis Accounting Differentiate between cash-basis accounting and accrual-basis accounting. Why is accrual-basis...

Cash Basis vs. Accrual Basis Accounting Differentiate between cash-basis accounting and accrual-basis accounting. Why is accrual-basis accounting the preferred method for most businesses? The Internal Revenue Service requires all companies with sales over $5,000,000 to use the accrual-basis of accounting for income tax reporting purposes. Why?

Explain the difference between the cash-basis of accounting and the accrual-basis of accounting. Are adjusting entries...

Explain the difference between the cash-basis of accounting and the accrual-basis of accounting. Are adjusting entries necessary in both methods? Explain.

Health care organizations and colleges use modified accrual basis of accounting. (true or false). A balance...

Health care organizations and colleges use modified accrual basis of accounting. (true or false). A balance in the Reserved for Encumbrances in excess of a balance of Encumbrances indicates: a) An excess of vouchers payable over encumbrances b) An excess of purchase orders over invoices received c) An excess of appropriations over encumbrances d) A recording error Which of the following financial statements should be prepared for proprietary funds? a). Statement of revenues, expenditures, and changes in fund balance b)....

Name three common transactions that are reported differently in modified accrual accounting and accrual accounting.

Distinguish between cash-basis accounting and accrual-basis accounting. Why is accrual-basis accounting accept-able for most businesses and...

Distinguish between cash-basis accounting and accrual-basis accounting. Why is accrual-basis accounting accept-able for most businesses and the cash-basis unacceptable in the preparation of an income statement and a balance sheet?

Why is accrual basis accounting superior to cash basis accounting?

Subjects