Lesson: Government-wide financial statements - Practice Questions

In this lesson, Nick Palazzolo, CPA, dives deep into government-wide financial statements, starting with an illustrative chart to provide a clear overview. He meticulously distinguishes between various types of funds, such as governmental, business type, internal service, and fiduciary funds, offering practical insights to help untangle these complex categorizations. As Nick delves into practice questions, he emphasizes the significance of separating enterprise fund activities from internal service funds and the exclusion of fiduciary fund activities from business type activities. He further clarifies the appropriate basis of accounting for government-wide financial statements, debunking common misconceptions and reinforcing the correct use of accrual accounting. By the end of the lesson, the correct methods for reporting changes in net position and the applicable basis of accounting are demystified and added to the expanding toolbox of knowledge.