Funds: Government units and entities provide various services such as police protection, water and sewerage legal courts, constructions, etc. Government units require various resources for these services and it receives these resources from various sources and government must make expenditures in accordance with legal restrictions. To accomplish the governmental objectives, the unit establishes a variety of funds as that unit’s fiscal and accounting entities.
To explain:A fund and the manner a fund receives resources.
Answer to Problem 17.1Q
A fund is an independent fiscal and accounting entity with self-balancing set of accounts. A fund may receive resources from variety of sources, including taxes, commercial sales, grants, fines and service charges collected.
Explanation of Solution
The above answer can be explained as, every governmental entity establishes various funds to achieve its objectives. These funds are separate accounting groups with accounts to record the transactions and prepare financial statements, each fund records those transactions affecting its assets, related liabilities and residual fund balance.
Different funds are established for the specific functions that a government must provide. Most funds obtain resources form taxes on property, income from commercial sales, grants provided by governmental agencies, fines collected, charges on services, and each fund must make expenditures in accordance with its specified purposes.
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Chapter 17 Solutions
LOOSE-LEAF Advanced Financial Accounting with Connect
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Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning