Question

A-Explain the differences between an enterprise fund and a permanent fund.

B-Give two examples of special assessments. Why are they considered special assessments?

C-Give an example of a state CAFR that reports enterprise funds and internal service funds. What categories do the states report as enterprise funds and as internal service funds?

D-The proprietary fund account statement of cash flows is different than the statement of cash flows required for business organizations. What are the main differences?

E-Explain how real estate held as an investment by a government endowment should be reported (what basis and what items would go into the value).

F-The billings for transportation services provided to other governmental units are recorded by an internal service fund as what types of transactions? Defend your answer – explain and cite your source.

Answer 1

A-Explain the differences between an enterprise fund and a permanent fund.

Solution:

An enterprise fund is more specific. Enterprise fund money can only be spent on a specific purpose, such as parks and recreation. Most of the funding comes from fees related to the fund's mission.

Whereas a permanent fund is one of the five governmental fund types established by GAAP. It is classified as a restricted true endowment fund for governments and non-profit organizations.

B-Give two examples of special assessments. Why are they considered special assessments?

Solution:

Special assessments are one of the ways a local government may collect moneyto pay for local improvements. A special assessment is a charge imposed on real property to help pay for a local improvement that benefits the property.

examples:

• Waterworks or water supplies.
• Sewer and water system improvements.
• Roads and streets.
• Cleaning, mowing and dilapidated building demolition.
• Sidewalks.
• Public utilities installation.
• Fire protection districts.
• Irrigation districts.