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.
Want to see more full solutions like this?
Chapter 17 Solutions
ADVANCED FIN. ACCT.(LL)-W/CONNECT
- Provide Answerarrow_forwardI need help with this general accounting question using standard accounting techniques.arrow_forwardKFC Industries estimates direct labor costs and manufacturing overhead costs for the upcoming year to be $920,000 and $740,000, respectively. KFC allocates overhead costs based on machine hours. The estimated total labor hours and machine hours for the coming year are 23,000 hours and 9,250 hours, respectively. What is the predetermined overhead allocation rate? (Round your answer to the nearest cent.)arrow_forward
- Can you solve this general accounting problem using accurate calculation methods?arrow_forwardCorvex Industries had sales of$620 million last year, and its production facility operated at 80% of capacity. The actual amount of fixed assets was $250 million. What total amount of fixed assets will Corvex need if it plans to increase sales by 30%?arrow_forwardCan you explain this general accounting question using accurate calculation methods?arrow_forward
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning