What is the purpose of government-wide financial statements?
The purpose of the government-wide financials statements is to consolidate financial information related to governmental organization into one report. When consolidating governmental fund financial statements into government-wide financial statements, they must report accrual-based economic resources information. Fiduciary funds (e.g. private purpose trust funds should not be included in the government-wide financial statements as their resources are not government entitled.
Furthermore, governmental and business-type activities will be organized in a combined manner in order to represent the total primary government. Additionally, discretely presented component units—legally separate entities for which the primary government is financially accountable—are shown on the face of the government-wide statements but will not be included in the combined financial report.
The government-wide financial statements assist users in:
You might also be interested in...
When can a PSC deduct payments made to owner-employees?
The general rule is that personal service corporations (PSC’s) will be able to deduct owner-employee payments made in the same year that it is includible in their gross income for individual tax purposes.
What do accountants mean when they say revenue can be recognized under the accrual basis of accounting?
Under U.S. GAAP, which requires the use of accrual basis accounting, a company cannot recognize revenue until their performance obligation is satisfied. The visual below illustrates that key steps to revenue recognition:
What is the relationship between volume and variable cost per unit?
If the variable cost per unit remains fixed, then any increase or decrease in unit volume will result in an increase or decrease in total variable costs for a business. For example, if variable cost per unit was steady at $5, then if unit volume were to increase from 100 to 200 units, then total […]