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Financial statements for governmental funds should be presented using the current financial resources measurement focus and the modified accrual basis of accounting.
The GWFS are reported using the economic resources measurement focus and the full accrual basis of accounting. GWFS report information about the government as a whole without displaying individual funds or fund types.
The GASB requires two financial statement reconciliations: (1) a reconciliation of the total governmental fund balances on the governmental funds balance sheet to the total governmental activities net position on the government-wide statement of net position and (2) a reconciliation of the net change in governmental
Governmental fund financial statements are prepared using the current financial resources measurement focus and the modified accrual basis of accounting.
State and local governments use two accounting methods to record transactions, modified accrual and accrual methods. Governmental funds use the modified accrual basis of accounting, with a current financial resources focus. Proprietary funds use the accrual basis of accounting, with an economic resources focus.
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People also ask

Which of the following would not be included as a reconciling item in reconciling the governmental funds statement of revenues, expenditures, and changes in fund balances to the government-wide statement of activities? Bond principal payment reported as an expenditure in a governmental fund.
Governmental fund financial statements are prepared using a modified accrual basis of accounting that is defined by a series of Statements and Interpretations of the National Council on Governmental Accounting (NCGA) and the Governmental Accounting Standards Board (GASB).
Both types of proprietary funds will be reported, as they are today, using the economic resources measurement focus and the accrual basis of accounting. These are the same measurement focus and basis of accounting as will be applied in the preparation of the government-wide financial statements.

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