How would you compare the accounting for enterprise funds with that of (a) businesses and (b) governmental funds? Summarize the reasons both for and against accounting for enterprises funds differently than governmental funds and include an example of an enterprise with regards to this.© BrainMass Inc. brainmass.com October 25, 2018, 8:48 am ad1c9bdddf
How would you compare the accounting for enterprise funds with that of (a) businesses and (b) governmental funds?
Enterprise funds are one of the two potential "proprietary funds" in nonprofit or governmental organizations.
Similar to business:
An enterprise fund accounts for the direct fees from customers for services or goods and resembles business activity more than it resembles governmental or nonprofit activities. As a result, it is accounted for similar to a business, except for equity since it is does ...
Your discussion is 249 words and mentions how enterprise funds are similar and different from businesses and argues for and against treating them like businesses in their accounting methods.
Internal Service Funds, Depreciation, Supplementary Information, Budgetary Comparison, MD&A, Categories of Funds
1. Internal service funds are reported as
a. Business-type activities in government-wide statements and governmental funds in funds statements
b. B proprietary funds in funds statements and governmental activities in government-wide statements
c. C. business-type activities in government-wide statements and proprietary funds in funds statements
d. Governmental funds in funds statements and governmental activities in government-wide statements
2. In which of the following statements would depreciation not be reported?
a. Internal service fund statement of revenues, expenses, and changes in fund net assets
b. government-wide statement of activities
c. capital projects fund statement of revenues, expenditures, and changes in fund balance
d. enterprise fund statement of revenues, expenses, and changes in fund net assets
3. Which of the following is "required supplementary information"?
a. Explanation of accounting principles used in preparing the financial statements
b. Schedule of changes in capital assets
c. Budgetary comparison
d. Ten-year tend of assessed property values
4. Which of the following is not required to be incorporated into the budgetary comparison?
a. Expenditures per originally adopted budget
b. Expenditures per the amended budget
c. Actual expenditures
d. Variance between the actual expenditures and those per the amended budget
5. Management's discussion and analysis (MD&A) is most likely to include information on
a. Service efforts and accomplishments
b. Market values of government-owned capital assets
c. The condition of infrastructure assets
d. Financial performance during the period covered by the financial statements
6. Which of the following is not one of the three main categories of funds?
a. Governmental funds
b. Permanent funds
c. Proprietary funds
d. Fiduciary funds
7. "Major" funds include
a. All governmental funds plus proprietary funds that have fund balances greater than 10% of those of all proprietary funds combined
b. The general fund, special revenue funds, capital projects funds, and debt service funds
c. The general fund plus all funds having assets greater than 50% of those of the general fund
d. The general fund plus other funds in which total assets, revenues, or expenditures/expenses of the fund are at least 10% of the corresponding total for the relevant fund category (governmental or enterprise) and also at least 5% of the corresponding total for all governmental and enterprise funds combined
8. The assets and liabilities of nonmajor governmental funds would be
a. Aggregated and reported in the governmental funds balance sheet in a single column
b. Excluded from the government-wide statement of net assets
c. Shown only in notes to the financial statements
Reported as required supplementary information
9. Which of the following would not be reported on a government-wide statement of activities?
a. A transfer of cash from the general fund to the debt service fund
b. Cost incurred by the recreation department for electricity purchased from the city-owned electric utility
c. Depreciation on traffic lights
d. Interes on bonds issued by the electric utility department
10. Which of the following is not required to be included in a government's basic financial statements or required supplementary information?
a. A reconciliation between proprietary fund financial statements and the business-type activities column of the government-wide financial statements
b. A reconciliation between governmental fund financial statements and the governmental activities column of the government-wide financial statements
c. A reconciliation between revenues reported on the basis of GAAP and those reported on a budgetary basis
d. A comparison between actual expenditures and expenditures per amended budget