Specific transactions and events

Area 3: State and Local Government Concepts (10-20%)

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Topics

  • Interfund transactions and transfers
  • Non-exchange transactions and derived revenues

Lessons

Study Frameworks

Interfund Transaction Types

TypeCategoryAccount TitlesExampleGovernment-Wide Treatment
Interfund loan (short-term)ReciprocalDue from / Due to other fundsGeneral Fund lends $100K to Capital Projects Fund for 6 monthsEliminated (both funds in governmental activities)
Interfund loan (long-term)ReciprocalAdvance to / Advance from other funds; nonspendable fund balance in lending fundGeneral Fund lends $500K to Enterprise Fund, repayable in 5 yearsReported as internal balances if between governmental and business-type
Interfund services provided/usedReciprocalRevenue (providing fund) / Expenditure or expense (receiving fund)Internal Service Fund charges General Fund $80K for fleet maintenance at fair valueNot eliminated (legitimate operating cost at fair value)
Interfund transferNonreciprocalTransfer out (other financing uses) / Transfer in (other financing sources)General Fund transfers $1M to Debt Service Fund for annual debt paymentsEliminated between governmental funds; reported as transfers between governmental and business-type
Interfund reimbursementNonreciprocalReduces expenditure in reimbursed fund / Records expenditure in correct fundGeneral Fund paid $10K in supplies that should be charged to Special Revenue FundNot separately reported (reclassification only)
Practice These Topics(67 questions)