Advanced Accounting - Ch20.pptVIP

Beams, Advanced Accounting 10e, Ch. 20 ? Pearson Education, Inc. publishing as Prentice Hall Accounting for Proprietary Funds Model CA + NCA – CL – NCL = Net assets Use accrual accounting Net assets Invested in capital assets net of related debt Restricted net assets Unrestricted net assets Two types Internal service funds Enterprise funds Internal Service Funds Use for government activities that provide goods and services to other departments or agencies of that same governmental unit Central stores/ purchasing Motor pools Print shop Might be started with transfers from general fund and/or contributed capital from other sources Main source of revenues is other funds Use Due from … rather than accounts receivable ISF – Entries (1 of 3) A village begins a central motor pool with $200 from the general fund and a contribution of vehicles The Other financing source and Contributed capital increase the ISFs net assets ISF – Entries (2 of 3) It provides motor pool services to the general fund and special revenue fund and bills them $100 and $30 The general fund and special revenue fund will record the bills received as expenditures ISF – Entries (3 of 3) The internal service fund collects the $100 due from the general fund The general fund will record the payment of its liability ISF – Other Transactions Most other transactions parallel those of businesses Use expenses, not expenditures Record acquisition, disposition, and depreciation of fixed assets Income is closed to unrestricted net assets Enterprise Funds Use for governmental activities Financed and operated like a business Provide goods and services to general public Utilities, civic centers, golf clubs Might start with funds transferred and contributions Main revenues from general public, but some from other departments of the government Use Accounts Receivable for general public and others and Due from … for other funds of this governmental unit EF – Entries (1 of 4) Utility-type enterprise funds often charge