Fund Based F/S 5

Question 1

Reconciliations of the figures reported for the governmental funds (in the fund-based financial statements) and the governmental activities (in the government-wide financial statements)

Answer 1

are required to explain why such large differences often appear.

Question 2

First main Reason why a large difference exist from a Reconciliation

Answer 2

(1) a different measurement focus exists (current financial resources for the governmental funds and all economic resources for the governmental activities),

Question 3

Second main Reason why a large difference exist from a Reconciliation

Answer 3

(2) the timing of recognition is different (modified accrual accounting for the governmental funds and accrual accounting for the governmental activities)

Question 4

Third main Reason why a large difference exist from a Reconciliation

Answer 4

(3) the method by which internal service funds are included (never part of the governmental funds but often a part of the governmental activities).

Permanent funds are governmental funds and are always included within the governmental activities.