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Proprietary Funds & Financial Statements

I need about 200 words for each of these questions

What are the types of proprietary funds? What are they used for? How are they similar? How are they different?

Why is it necessary to reconcile government-wide financial statements with fund statements?

What is contained in the resources section of an interim financial statement? What is this section used for?

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What are the types of proprietary funds? What are they used for? How are they similar? How are they different?

Proprietary funds show the accounting for the government organizations' activities that are business-like in nature. The funds shown are usually funded through charges made by the user or on a basis that is cost refundable.

There are two types of proprietary funds: the enterprise funds and the internal service funds. The enterprise funds account for ongoing activities of organizations and a fee is charged to the external users of the goods or services. The activities need to submit documents that are going to be reported as enterprise funds in relation to the sources of the principal revenue of the activities. However, they have to meet the following criteria as a requirement:
1. The funds that are funding the activity come from a debt that is dependent upon a pledge of the net revenues coming from the charges of the activity,
2. The activity's cost of administering and providing the services, e.g., capital costs, should be recovered with charges and fees arising from the activity and not from taxes or related revenues, or
3. The fees and charges are priced in such a way that its costs, (including capital costs such as depreciation or debt service), are included.
Internal service funds accounts for the goods or services that are provided by one department to another agency of the state in which cost is done on a cost refund basis. This type of fund should be used only in cases when the state is the sole or dominant participant in the activity.

Both types use the GAAP just like the other private businesses and recover the full cost of services ...

Solution Summary

The solution is composed of more than 600 words explaining the following: proprietary funds, reconciling government-wide financial statements with fund statements, and the content of the resources section of an interim financial statement. References are included.

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