Capital and Debt Service Funds
#1. Encumbrances (Professor Post)
Expenditures for governmental organizations are handled differently then those in for profit businesses. Most budgets are approved at least one year in advance and annual audits ensure that the government organizations follow the guidelines set in place by the approved budget. What is the purpose of an encumbrance? How does an encumbrance affect expenses and expenditures? What is the impact of encumbrance accounting on a governmental budget?
#2. Capital and Debt Service Funds (Professor Post)
An important aspect of governmental accounting is how large projects such as buildings, infrastructure (roads, airports, sidewalks, etc.), and large equipment is purchased and built. Either using the CAFR selected last week, or another government entity you are interested in, identify the capital projects funds and why were these funds created? Find a debt service fund and how is this fund being used? What is inter-period equity? How does inter-period equity affect capital project and debt services funds?
#3. Main Source of Revenue (Professor Post)
Government revenues are not quite the same as those of business enterprises. Instead of being an exchange for goods and services, most government revenues are non-exchange. As a result, they have different rules for recognition. Either using the CAFR selected last week, or another government entity you are interested in, identify the main sources of revenues. What types of revenue are they? How are they recognized by the entity? What time issue determines when each revenue is recognized?
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