Difference between General Fund and Special Revenue Fund
General Fund: General funds are referred to the fund that reports the use of the funds for the day to day operating activities which is not reported in any other type of funds. General funds are not restricted to expended only in stated purposes.
Special Revenue Fund: Special Revenue funds are the funds that are established to account the revenue generated for specific resources. Special Revenue funds are strictly restricted to expended only in stated purposes.
: Preparation of

Answer to Problem 16.16P
Journal entries of all the funds and group of accounts involved.
Explanation of Solution
Following are the Journal Entries for all the funds and groups of accounts involved:
Journal Entries
S. No. | Fund or Account Group | Account Title and Explanation | Debit Amount ($) | Credit Amount($) |
2 | Special Revenue Fund | Estimated Revenue Account Debit | 264,500 | |
To Appropriations Account | 250,000 | |||
To Budgetary Fund Balance (Balancing Figure) | 14,500 | |||
(Being to record the budget of gasoline tax) | ||||
3 | General Fund | Tax Receivable-Current account Debit | 3,000,000 | |
To Allowance for uncollectible current taxes | 60,000 | |||
To Revenue Account | 2,940,000 | |||
(Being to record tax levy) | ||||
4. | Capital Project Fund | Cash Account Debit (Balancing Figure) | 985,000 | |
Expenditure Account Debit | 5,000 | |||
Other Financing uses Account Debit (working note : 1) | 10,000 | |||
To Other financing Sources Account | 1,000,000 | |||
(Being to record sale of bonds) | ||||
General Long-Term debt | Amount to be provided for payment of term bonds debit | 1,000,000 | ||
To Term Bonds Payable Account | 1,000,000 | |||
(Being to record the liability for the term bonds) | ||||
5. | Capital Projects Fund | Encumbrances Account Debit | 1,000,000 | |
To Fund Balance − Assigned | 1,000,000 | |||
(Being to record the signing of the construction contract) | ||||
6. | Capital Projects Fund | Expenditure Account Debit | 1,250,000 | |
To Cash Account | 1,250,000 | |||
(Being to record the cost of constructed school) | ||||
General Fixed Assets Account Group | Building Account Debit | 1,250,000 | ||
To Investment in General Fixed Assets capital projects fund account | 1,250,000 | |||
(Being to record the cost of school buildings) | ||||
7. | General fund | Other Financing Uses Account Debit | 100,000 | |
To Cash Account | 100,000 | |||
(Being to record a transfer of the debt service fund) | ||||
Capital Projects Fund | Cash Account Debit | 100,000 | ||
To Other financing Sources Account | 100,000 | |||
(Being to record the transfer of general funds) | ||||
8. | General Fixed Assets Account Group | Land Account Debit | 500,000 | |
To Investment in General Fixed Assets- Donations | 500,000 | |||
(Being to record the donation of land) | ||||
9. | Special Revenue Fund | Cash Account Debit | 205,000 | |
Due from State Government Account Debit | 60,000 | |||
To Revenue Account | 205,000 | |||
To Deferred Revenue Account | 60,000 | |||
(Being to record state gasoline taxes) | ||||
10. | Special Revenue Fund | Expenditures Account Debit | 410,000 | |
To Vouchers Payable Account | 410,000 | |||
(Being to record the vouchers approved for payment) |
Working Notes:
- Since the bonds are sold at 99, so, 1% may be the discount which is considered as other financing uses. Other financing uses is equal to $10,000 (1% of $1,000,000).
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Chapter 16 Solutions
ADVANCED ACCOUNTING
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