Governmental Funds

Question 1

What is purpose of general fund?

Answer 1

• The most powerful fund there is
• Created at beginning of governmental unit, and exists throughout life of unit.
• General Fund can do everything

Question 2

What are revenue sources of general fund?

Answer 2

1) Taxes - property taxes - revenue when recorded/billed (and owed)
2) Public Safety and Regulation (police fines, government permit license)
3) Intergovernmental (shared or grant revenues from other govt)
4) Charges for services
5) Other Revenues ( investment earnings)

Question 3

What is purpose of special revenue fund?

Answer 3

• Account for revenues and expenditures that are legally restricted or committed for purpose other than debt service or capital projects.

Question 4

Examples of special revenue funds?

Answer 4

1) Parking Fees
2) Sales Tax
3) Gasoline Tax

Question 5

What account do expendable trust activities and donations (illegal activities) go to?

Answer 5

Special Revenue Fund

Question 6

What is the difference between monitoring and non-monitoring grants?

Answer 6

Monitoring Funds - go to special revenue fund

Non monitoring funds - go to agency trust fund

Question 7

Are there encumbrances in Debt Service Fund?

Answer 7

Debt Service Fund and Permanent Fund don’t use Encumbrances.

Question 8

What is the purpose of debt service fund?

Answer 8

• To account for accumulation of resources (cash and investment) and payment of currently due interest and principal of LTD:

a) Debt Service Fund pays debt of GRaSPP
b) Debt Service Fund does not pay debt of SE-PAPI

Question 9

What is journal entry to record income from investment of resources (Revenue) for debt service fund?

Answer 9

Dr: Cash
Cr: Revenue - investment income

Question 10

What is journal entry to record expenditures from principal and interest for debt service fund?

Answer 10

Dr: Expenditures
Cr: Cash (matured interest payable)

Dr: Expenditures
Cr: Cash (matured principal payable)