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Accounting and Reporting Principles
Finance & Accounting
Pages 3 (753 words)
If I were a member of the town council or a citizen, I would want the expenses categorized as government services, sewer services and miscellaneous to be broken down and reported in detail in the financial statements, and then thoroughly audited.
In the same audit, the revenues should as well be traced so they can give opinions as to whether all cash received as taxes or government revenues are properly recorded and remitted to the town’s treasury. The journal entries below record the issuance by the town of a three-year note to purchase police vehicles. The journal entries recorded in the general journals of the General Fund differ from those recorded in the general journals for governmental activities at the government-wide level. The General Fund general journal reflects the creation of temporary accounts – namely, Other Financing Sources-Proceeds of Three-Year Note and Expenditures-Capital Outlay – upon the issuance of notes and the purchase of the vehicles. On the other hand, the government-wide level general journal reflects the recording of assets and liabilities, namely the Transportation Equipment and the Notes Payable. This is because the accounting books of the General Fund are mostly concerned only with the inflow and outflow of the current financial resources of the town. Meanwhile, the books for the government-wide entity should show all transactions affecting the net assets of the town; thus, the specific accounts such as Transportation Equipment, Notes Payable, then subsequently, the Depreciation Expense and Interest Expense are used. ...
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