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What is the statement of net assets?

Balance sheet accounts and statement of net asset accounts are used to track financial transactions for each fund. Such financial statements report assets, liabilities, and equity accounts only and are considered snapshots of how these accounts stand as of a certain point in time.

What is the cash basis of the audited financial statements?

In cash-basis bookkeeping, those transactions reflect only the payments that have actually been made and cash physically received, so there is no audit of outstanding transactions. During the review, you may identify potential errors or improper accounting procedures.

What does a negative net position mean?

Negative unrestricted net assets/position occurs primarily if liabilities exceed assets. What it means: This indicator identifies when an entity has declining or negative unrestricted net assets/position. Why it is important: This indicator identifies if net assets/position is available for unrestricted purposes.

What is the cash basis of government accounting?

Cash basis refers to a major accounting method that recognizes revenues and expenses at the time cash is received or paid out. This contrasts accrual accounting, which recognizes income at the time the revenue is earned and records expenses when liabilities are incurred regardless of when cash is received or paid.

Which basis of accounting is used for governmental funds?

Governmental fund financial statements are prepared using the current financial resources measurement focus and the modified accrual basis of accounting.

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