Section 1: 30–40%1C2

Purpose of Funds

Exam insight

Government-wide statements and fund statements coexist, and a common question asks which one reports which number. One distinction matters most. Capital assets and long-term debt appear on government-wide statements (full accrual) but not on governmental fund statements (modified accrual). A question that shows a building purchase and asks how it's reported is testing exactly that.

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

Patterns in this topic

The exam re-skins the same archetypes. Recognize these here, then drill them in the Pattern Lab.

The Fund PickerFollow the money's customer: outsiders mean enterprise, other departments mean internal service, held for others means fiduciary.

Exam tip

Study smarter: before you expand each card, cover the screen and try to recall what the concept means from its title alone. Retrieving it from memory builds the recall the exam actually tests, and it beats re-reading.