Section 1: 30–40%1C2
Purpose of Funds
Exam Insight
Government-wide statements and fund statements coexist - and AICPA loves to ask which one reports which number. The trap: capital assets and long-term debt appear on government-wide statements (full accrual) but NOT in governmental fund statements (modified accrual). A question showing a building purchase and asking 'how is this reported' is testing exactly that difference.
CPA Exam Lab is an independent study resource and is not affiliated with, endorsed by, or sponsored by the AICPA® or NASBA. Practice questions are original content created for study purposes. “CPA” is a registered trademark of the AICPA.
What AICPA Wants You to Know
- 1Name and describe the three categories of governmental funds and their subtypes
- 2Identify the basis of accounting used by each fund category
- 3Match government activities to the correct fund type
- 4Distinguish enterprise funds from internal service funds
- 5Identify the four types of fiduciary funds