Chapter 15, Problem 4UTI

To determine

Concept introduction

The key part of a business is the government. The governmental funds are termed as the general funds. Accounting and financial reporting becomes more important with increasing economy. There are two types of financial organizations in this category, governmental and not-for-profit entities. Budgeting helps to obtain optimal resource allocations to those entities and manage them efficiently.

The advantages which are gained by the categorization of the fund balances initially into non-spendable and then allocating the remaining fund balance into the restricted, committed, assigned and unassigned.