Following are some of the county's governmental funds. The county has asked you to determine is any of the funds listed should be classified as major funds based on the GASB size criteria. Clearly indicate which fund(s) you believe should be classified as major and provide support for your choice(s). General FundSpecial Revenue FundDebt Service FundTotal of allGovernmental FundsTotal of allGovernmental & Enterprise FundsAssets12,000,0001,000,000500,00015,000,00021,000,000Liabilities3,000,000250,00030,0004,580,0005,890,000Revenues10,000,000600,0001,450,00013,770,00017,123,000Expenditures/Expenses9,859,000725,0001,300,00013,460,00016,665,000

Question

What will be an ideal response?

Answer 1

Debt Service Fund - The size criteria states that a fund must be at least 10% of the total of all governmental funds for at least one of the elements (assets, liabilities, revenues, expenditures/expenses), and it must be at least 5% of the total of all governmental funds and enterprise funds for the same element.  The debt service fund meets the size criteria for revenues since 10% of the total of all governmental funds is $1,377,000 and  5% of the total of all governmental and enterprise funds is $856,150, both of which the debt service fund exceeds. (The thresholds for the other three elements are: assets-10% is $1,500,000, 5% is $1,050,000; liabilities-10% is $458,000, 5% is $294,500; expenditures/expenses-10% is $1,346,000, 5% is $833,250.)

General Fund - the General Fund is always classified as a major fund and it meets the size criteria for all of the elements.