List and define the five classifications of governmental funds.
What will be an ideal response?
1. General Fund
This fund accounts for most of the basic services provided by the government. It accounts for and reports all financial resources not accounted for and reported in another fund.
2. Capital Projects Fund
This fund accounts for and reports financial resources that are committed or assigned to expenditure for capital outlays. It accounts for the purchase or construction of major capital improvements except those purchased or constructed by a proprietary or fiduciary fund.
3. Debt Service Fund
This fund accounts for and reports financial resources that are restricted, committed or assigned to expenditure for principal and interest, other than interest or principal on proprietary or fiduciary activities.
4. Special Revenue Fund
This fund accounts for and reports the proceeds of specific revenue sources that are restricted or committed to expenditure for a specified purpose other than debt service or capital projects.
5. Permanent Fund
This fund accounts for and reports resources that are restricted to the extent that only earnings, and not principal, may be used for purposes that support the reporting government's programs.
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Wanda and Jim are working on a research project to anticipate customer attitudes toward a proposed new product line for their company. They have worked with the marketing manager to determine the answers that are needed and have created a detailed design of the project. Their next logical step will be to
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