Videos
Last month a local government collected property taxes, collected gas taxes reserved for highway expansion, and received a monetary contribution from an estate. The contribution is to be held intact, but earnings are reserved for the purchase of a special collection of historical books for the public library. What governmental funds should be used to account for these items?
Indicate the government funds that should be used to account for property taxes, gas taxes, earnings reserved for purchase of special books for public library.
Explanation of Solution
Governmental funds: This is the fund category which includes governmental activities in the government-wide financial statements, which evaluate the fiscal accountability of the resources raised and expended according to the budgetary provisions. Governmental funds includes five types of funds. They are General Fund, special revenue funds, debt service funds, capital project funds, and permanent funds.
General Fund: The chief operating fund of state and local government used to record the departmental operating activities and government support services is referred to as General Fund, or General Operating Fund, or General Revenue Fund. The activities recorded in General Funds are police, fire, public works, recreation, education, culture, social services, city office, finance, personnel, and data processing.
Special revenue funds: The taxes, grant revenues, or gift taxes that are restricted by external providers for specific operating purposes like maintenance of bridges, or roads, are referred to as special revenue funds.
Debt service funds: These are the funds that are segregated by the state government to finance the principal and interest payments of outstanding bond obligations, or other long term liabilities.
Capital project funds: The funds from tax or grants or proceeds from bonds that are created to facilitate the capital projects like purchase of capital assets like buildings, parks, highways, bridges, or make payments to contractors, architects, engineers, are referred to as capital project funds.
Permanent funds: These are the funds that are instructed by donors to either invest or preserve their principal contributions, and account those as permanent endowments, but could use the earnings on such contributions for any public programs, or government plans, like maintenance of cemeteries, parks, libraries, or buildings.
The government funds that should be used to account the given revenue in the following ways:
- The property taxes should be accounted for as General Fund.
- The reserved gas taxes should be accounted as special revenue fund.
- The earnings reserved for purchase of special books for public library should be accounted for as permanent funds.
Want to see more full solutions like this?
Chapter 4 Solutions
Accounting For Governmental & Nonprofit Entities
- Nu Company reported the following pretax data for its first year of operations. Net sales 2,880 Cost of goods available for sale 2,500 Operating expenses 700 Effective tax rate 20% Ending inventories: If LIFO is elected 850 If FIFO is elected 1,150 What is Nu's net income if it elects LIFO? Multiple Choice $424 $530 $830 $664arrow_forwardHey tutor get correct answer the general accounting questionarrow_forwardAlison's dress shop buys dresses from McGuire Manufacturing. Alison purchased dresses from McGuire on July 17 and received an invoice with a list price amount of $5,500 and payment terms of 410/410 , n30/n30 . Alison uses the net method to record purchases. Alison should record the purchase at: Multiple Choice $5,720. $5,500. $2,640. $5,280.arrow_forward
- A company’s inventory on December 31, 2024, was $328,000 based on a physical count priced at cost, and before any necessary adjustment for the following: Inventory costing $33,000, shipped f.o.b. shipping point from a vendor on December 30, 2024, was received on January 5, 2025. Inventory costing $25,000, shipped f.o.b. destination from a vendor on December 28, 2024, was received on January 3, 2025. Inventory costing $41,000 was shipped to a customer f.o.b. destination on December 28, arrived at the customer’s location on January 6, 2025. Inventory costing $15,000 was being held on consignment by another company. What amount should the company report as inventory in its December 31, 2024, balance sheet? Multiple Choice $328,000 $417,000 $376,000 $442,000arrow_forwardPlease provide correct answer general accountingarrow_forwardPlease solve this accounting problem not use aiarrow_forward
- Hi expart give answer the accounting question not use aiarrow_forwardGive true solution for these general accounting questionarrow_forwardMogul Company ships inventory to Ski Outfit in a consignment arrangement. The arrangement specifies that Ski Outfit will attempt to sell the inventory, and in return, Mogul will pay to Ski Outfit a 15% sales commission on any inventory sold. During the year, Mogul ships inventory with a cost of $92,500 to Ski Outfit. By the end of the year, $70,000 of the inventory has been sold to customers for a total of $98,000. What amount of inventory will Mogul report at year end? Multiple Choice $0 $13,875 $22,500 $5,500arrow_forward
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education