accounting promotes control and accountability over restricted resources.
2. The basis
of accounting determines when transactions and events are recognized.
3. If an
entity adopts a full accrual basis of accounting, its measurement focus will
automatically be on all economic resources.
government may report some of its funds on a full accrual basis.
divide a government into functional departments.
funds are established to account for resources legally restricted for specified
activities only benefit parties other than the government itself.
Financial Accounting Standards Board requires all nongovernmental
not-for-profit entities to use fund accounting.
addition to preparing fund financial statements, governments should also
prepare consolidated financial statements to provide information on the
financial position and operating results of the government as a single economic
activities should be reported in fund statements, but should be excluded from
the government-wide statements.
11. At first
glance, the government-wide statement of activities bears little resemblance to
the income statement of a business.
accounting for costs incurred on a major construction project in a capital
projects fund, the construction outlays are reported as expenditures, not