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Fund accounting is an accounting system for recording resources whose use has been limited by the donor, grant authority, governing agency, or other individuals or organisations or by law. It emphasizes accountability rather than profitability, and is used by Nonprofit organizations and by governments.
These funds account for most of the citys activities that are financed through taxes. Governmental fund reporting often has a budgetary orientation. Governmental funds are classified into five fund types: general, special revenue, capital projects, debt service, and permanent funds.
Fund balance (Equity) is essentially the difference between assets and liabilities. In general, it is the balance remaining after the assets have been used to satisfy the outstanding liabilities.
Fund Financial Statements nonspendable fund balance; restricted fund balance; committed fund balance; assigned fund balance; and. unassigned fund balance.
3.40 The governmental fund statement of revenues, expenditures, and changes in fund balances reports information about the inflows, outflows, and balances of current financial resources of each major governmental fund and for the nonmajor governmental funds in the aggregate.
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GASB defines major funds as those meeting the following criteria: The total assets plus deferred outflows, liabilities plus deferred inflows, revenues, or expenditures/expenses of the individual governmental or enterprise fund are at least 10 percent of the corresponding total (assets, liabilities, etc.)
Governmental funds generally used to account for tax-supported (governmental) activities. Proprietary funds used to account for business-type activities (such as activities supported, at least in part, by fees or charges).
GASB 34, as amended by GASB 63, requires the following format presentation for the governmental funds balance sheet: (Assets + deferred outflows of resources) = (liabilities + deferred inflows of resources) + (fund balance).

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