Fund Accounting Systems - Governmental accounting systems should be organized and operated on a fund basis. A fund is defined as a fiscal and accounting entity with a self-balancing set of accounts recording cash and other financial resources, together with all related liabilities and residual equities or balances, and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions or limitations.
The diverse nature of governmental operations and the necessity of assuring legal compliance have resulted in governmental financial transactions and balances being recorded in several accounting entities. Unlike a private business, which is accounted for as a single entity, a governmental unit is accounted for through several separate fund and account group entities, each accounting for designated assets, liabilities, and equity or other balances. Thus, from an accounting and financial management viewpoint, a governmental unit is a combination of several distinctly different fiscal and accounting entities, each having a separate set of accounts and functioning independently of other funds and account groups.
Understanding Financial Leverage
Finance
Miami, Florida, USA Apartment For Sale - Apto em M...Each fund must be accounted for as a separate self-balancing set of accounts with assets, liabilities, equity, revenues, expenditures or expenses (as appropriate), and transfers. The requirements of a complete set of accounts for each fund refer to the identification of accounts in the financial records, and do not necessarily extend to physical segregation of assets or liabilities. For example, it is not necessary to have a separate bank account for each fund unless required by law, bond indenture or other reason. Likewise, governmental units utilizing system computerization and account coding techniques may treat these separate accounting entities as independent subcomponents of a unified government accounting system.
Governmental units should establish and maintain those funds required by law and sound financial administrations. Only the...