4 min read•Last Updated on July 30, 2024
Government-wide and fund financial statements are crucial tools in governmental accounting. They offer different perspectives on a government's financial health, with government-wide statements providing a broad overview and fund statements diving into specific activities.
Understanding these statements is key to grasping governmental finances. Government-wide statements use accrual accounting and include all assets and liabilities, while fund statements focus on current resources and use modified accrual accounting for governmental funds.
The Basic Financial Statements – Financial Strategy for Public Managers View original
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The Basic Financial Statements – Financial Strategy for Public Managers View original
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The Basic Financial Statements – Financial Strategy for Public Managers View original
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The Basic Financial Statements – Financial Strategy for Public Managers View original
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The Basic Financial Statements – Financial Strategy for Public Managers View original
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The Basic Financial Statements – Financial Strategy for Public Managers View original
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The Basic Financial Statements – Financial Strategy for Public Managers View original
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The Basic Financial Statements – Financial Strategy for Public Managers View original
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The Basic Financial Statements – Financial Strategy for Public Managers View original
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The Basic Financial Statements – Financial Strategy for Public Managers View original
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Accountability refers to the obligation of individuals or organizations to report, explain, and be answerable for the consequences of their actions. It involves a relationship where an entity is required to justify its decisions and is held responsible for the outcomes, especially in managing public resources and finances.
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Accountability refers to the obligation of individuals or organizations to report, explain, and be answerable for the consequences of their actions. It involves a relationship where an entity is required to justify its decisions and is held responsible for the outcomes, especially in managing public resources and finances.
Term 1 of 16
Fund financial statements are specialized financial reports that focus on the financial position and results of operations of individual funds used by governmental entities. These statements provide detailed information about how resources are allocated and utilized within specific funds, allowing stakeholders to assess the fiscal accountability and operational efficiency of government activities.
Governmental Funds: Funds used by governmental entities to account for tax-supported activities, focusing on the flow of current financial resources.
Proprietary Funds: Funds that account for a government's ongoing activities that are similar to private business operations, such as utilities or transportation services.
Fiduciary Funds: Funds used to account for resources held by a government in a trustee or agency capacity for others, emphasizing stewardship and accountability.
The statement of net position is a financial statement that presents the assets, liabilities, and net position of a government entity at a specific point in time. This statement is crucial for assessing the financial health of governmental organizations, providing stakeholders with insight into what the government owns and owes. It is a foundational component of government-wide financial statements, integrating information from various funds to offer a comprehensive view of the entity's overall financial condition.
Assets: Resources owned by the government that provide future economic benefits, such as cash, investments, and infrastructure.
Liabilities: Obligations or debts that the government owes to outside parties, including loans, bonds payable, and accounts payable.
Net Position: The difference between total assets and total liabilities, representing the government's residual interest in its assets after deducting liabilities.
The economic resources measurement focus refers to the approach used in accounting to assess and report the financial position of an entity based on its economic resources, including assets, liabilities, and net position. This focus emphasizes the importance of measuring the value of resources available for use and the obligations that exist, which is particularly significant in the context of how government entities manage and report their financial activities.
Accrual Basis Accounting: A method of accounting that recognizes revenue when earned and expenses when incurred, regardless of when cash transactions occur.
Financial Position: The overall status of an entity's assets, liabilities, and net assets at a specific point in time, reflecting its financial health.
Fund Balance: The difference between a government's assets and liabilities in its funds, indicating the net resources available for future spending.
A statement of activities is a financial report used primarily by not-for-profit organizations to summarize their revenues, expenses, and changes in net assets over a specific period. This statement provides insight into the organization's financial performance and is crucial for assessing how resources are allocated and whether the organization is fulfilling its mission. It helps stakeholders understand the operational results and financial position in terms of funding sources and program expenses.
net assets: The difference between total assets and total liabilities, representing the residual interest in the assets of a not-for-profit organization after deducting liabilities.
revenue recognition: The accounting principle that outlines when and how revenue is recognized in the financial statements, which is particularly important for not-for-profits that rely on donations and grants.
functional expenses: Expenses categorized based on their purpose or function, such as program services, management and general, or fundraising activities, which helps organizations evaluate how efficiently they are using resources.
Current financial resources measurement focus is an accounting approach used primarily in governmental and not-for-profit entities that emphasizes the flow of current financial resources available for spending in the near term. This focus assesses the inflows and outflows of financial resources, such as cash and receivables, rather than the overall economic resources of an entity, leading to a unique presentation of financial statements that aids in understanding short-term fiscal health.
Modified Accrual Basis: An accounting method that combines cash basis and accrual basis accounting, recognizing revenues when they are measurable and available and expenditures when incurred.
Fund Accounting: A system of accounting used by governments and non-profits that segregates resources into funds to ensure compliance with restrictions on the use of those resources.
Budgetary Control: The process of comparing actual financial performance against budgeted performance to ensure that the organization remains within its financial limits.
The modified accrual basis is an accounting method that combines aspects of both cash and accrual accounting, primarily used in government financial statements. Under this method, revenues are recognized when they become measurable and available, while expenditures are recognized when the related liability is incurred. This approach helps to provide a more accurate representation of a government's financial status by focusing on short-term financial performance and ensuring that resources are accounted for when they are expected to be available for use.
Accrual Accounting: An accounting method where revenues and expenses are recorded when they are earned or incurred, regardless of when cash is exchanged.
Fund Accounting: A system of accounting that segregates resources into various funds to track their usage, especially in government and non-profit organizations.
Financial Statements: Formal records that summarize the financial activities and position of an organization, including the balance sheet, income statement, and cash flow statement.
The general fund is the primary operating fund used by government entities to account for all financial resources that are not required to be accounted for in another fund. It serves as the main source of funding for government services and activities, covering a wide range of expenditures including public safety, education, and infrastructure. This fund plays a crucial role in maintaining transparency and accountability in government financial reporting.
fund accounting: A system of accounting used by non-profit organizations and government entities that focuses on the sources and uses of funds, rather than just profits.
restricted fund: A fund that has limitations on its use, often imposed by external sources, such as donors or grant agreements.
government-wide financial statements: Comprehensive financial reports that provide an overview of a government's financial position and activities, combining all funds and activities into one presentation.