Governmental
The Fund Picker
Follow the money's customer: outsiders mean enterprise, other departments mean internal service, held for others means fiduciary.
How the exam words it
- -The stem describes an activity (water utility, IT department, pension assets) and asks which fund it 'should be accounted for' in.
- -Resources are legally restricted to a purpose (gas tax for highways) or a corpus must be maintained.
- -It asks which funds are excluded from the government-wide statements.
- -The government collects or holds money 'on behalf of' another government or individuals.
The playbook
- 1Sort into the three categories: governmental (general, special revenue, capital projects, debt service, permanent), proprietary (enterprise, internal service), and fiduciary (pension trust, private-purpose trust, custodial).
- 2Proprietary test: enterprise funds charge external customers; internal service funds bill other departments of the same government.
- 3Fiduciary funds hold resources for parties outside the government and are excluded from the government-wide statements.
- 4Permanent funds keep the corpus and spend income for the government's own programs; if the beneficiaries are outside the government, it is a private-purpose trust instead.
The trap
Classifying a city utility that bills residents as an internal service fund. External customers make it an enterprise fund; internal service funds serve other departments.
How the exam varies it
The same pattern, re-skinned along these axes:
Which fund category and typeWho benefits: external customers, internal departments, or outside partiesFund-level accounting versus inclusion in government-wide statements
Drill this pattern
8 questions of The Fund Picker from across the AUD topics. Clear it by getting 5 right with a streak of 3.