Section 3: 10–20%B11
Governmental Funds and Fund Accounting
Exam Insight
State and local government accounting starts with the fund. If you cannot place a transaction in the right fund and apply the right measurement focus, every downstream question — fund balance, budgetary entries, the eventual government-wide conversion — falls apart.
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What AICPA Wants You to Know
- 1Classify the 11 fund types into the three fund categories
- 2Apply current financial resources / modified accrual to governmental funds and economic resources / full accrual to proprietary and fiduciary funds
- 3Recognize revenues when measurable and available and expenditures when incurred
- 4Record budgetary entries and encumbrances, including the reversal at year-end
- 5Classify ending fund balance into the five GASB 54 categories