Acct 6343.01 Accounting For Governmental & Not-for-profit Entities

The special revenue fund is a type of fund that is used to account for financial resources that are legally restricted to a specific purpose, other than capital projects or debt service. This means that the revenue sources for this fund are designated for a particular use and cannot be used for other purposes. Therefore, the statement that the special revenue fund accounts for financial resources provided by revenue sources that are legally restricted to a specific purpose is true.

In the governmental/nonprofit environment, the primary objective is not to generate net income but to provide services or meet specific goals for the public or community. Unlike commercial businesses, which focus on profitability and maximizing net income, governmental/nonprofit entities prioritize the delivery of public services and achieving their missions. The financial statements and accounting practices in this sector reflect this difference in objectives, with emphasis on accountability, transparency, and stewardship of public resources rather than profit generation.

There can be only 1 general fund for each governmental entity, regardless of its size.

A "major" governmental fund is determined based on the percentage of total assets, liabilities, revenues, or expenditures in the governmental funds category, as well as the percentage in the governmental and enterprise funds combined. According to the given statement, a "major" governmental fund is one that has 10% of total assets, liabilities, revenues, or expenditures in the governmental funds category and 5% in the governmental and enterprise funds combined. Therefore, the statement is true.

FASAB, the Federal Accounting Standards Advisory Board, is the primary standard setting authority for the federal government.