Chapter 18, Problem 18.9Q

To determine

Governmental funds: There are five types of governmental funds

• The general funds for governmental operations such as payment of salariesand purchase of supplies.
• Special revenue funds for special projects such as construction projects.
• Capital project funds for capital maintenance and revenue determination.
• Debt service funds for long term payment and interest payment.
• Permanent funds as restricted fund such as earnings only.

Governmental units are required to follow GASB statement 34, for financial reporting and need to provide appropriate disclosures.

To explain:The two tests for determining major governmental funds for which separate disclosure is required.