Lesson: Governmental Funds Financial Statements Overview and Objectives

Instructor: Nick Palazzolo

In this lesson, get ready to dive into the world of governmental funds and understand their role in the grand scheme of governmental accounting. Nick Palazzolo, CPA, draws clear distinctions between governmental funds financial statements and government-wide financials, emphasizing how easily the concepts might be confused. With the helpful use of a diagram, Nick illustrates where governmental funds fit within the broader context of government accounting, and why fiduciary funds are not included in the government-wide financial statements. Enthusiastically tackling the role and purpose of governmental funds, Nick sets the stage to explore which fund a state or local government should use to record its varied activities.

Updated: Oct. 20, 2021 Create an account

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Transcript

Instructor: Nick Palazzolo

Nick Palazzolo is head instructor of ExamPrep.ai CPA Review. Nick's teaching style is engaging & upbeat, combining practical Big 4 tax & assurance expertise with years of 1-on-1 coaching. His lessons are concise and emphasize what you need to know to pass. Whether you're a recent grad or working full-time, we’re confident you can conquer your CPA exams with Nick’s review.

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Hope you're as excited as I am. Today we've got governmental funds, financial statements. This is in comparison to our government-wide financials and I'm going to make that point over and over because it will get confusing. The governmental funds - so we've got G for governmental, P for proprietary, and F for Fiduciary. These three are on the same branch level, I'll call them. And then overarching we've got government-wide.

So right now we are here. And when I draw this diagram, it's also not entirely accurate because, as you'll see in government-wide, it really only consists of these two financial statements. But it really does help to understand where we are. This is the comprehensive package of everything of all of our financials.

Governmental fund is just one of those and then as we saw in government-wide, you will see Fiduciary are not included because they essentially really don't show the accurate representation of the government - you're holding money for other people in pensions, in custodial accounts. It's not really the government's money, that's why it's not included in government-wide. But we are here, not to get ahead of ourselves, we are here in governmental fund and it will be a good time. So let's jump into our learning objectives and really this section is just going to include the CPA learning objective of determining the appropriate fund that a state or local government should use to record its activities.

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Governmental Accounting: Part 1

Module: 3 Concepts, 29 Lessons

Governmental Assets, Liabilities, Revenues & Expenses Overview and Objectives

1:32

Governmental Fund Structure

1:12

Governmental Revenues - General Fund

1:31

Governmental Expenditures - General Fund