Accurate and transparent financial reporting is the aim of governmental reporting. It ensures that financial information is presented in a way that meets the needs of various stakeholders while adhering to specific accounting standards and principles. In this module, we will begin to look at the foundational construction of government financial statements.

In governmental accounting, the Statement of Net Position within Government-Wide Financial Statements serves as a critical snapshot of a government entity's financial health, categorized into Net Investment in Capital Assets, Restricted, and Unrestricted. Operating Revenues and Expenses in Government-Wide Statements of Activities delineate the revenues and expenses associated with core governmental activities, distinguishing between program and general revenue sources. Governmental Fund Financial Statements follow modified accrual accounting, comprising essential funds and featuring financial statements like the Balance Sheet, Statement of Revenues, Expenditures, and Changes in Fund Balances, and the Statement of Cash Flows. Transfers and Internal Balances facilitate resource allocation among funds, while Fund Balance classifies resources as Nonspendable, Restricted, Committed, Assigned, or Unassigned. Additionally, Revenues and Other Financing Sources, Expenditures, and Other Financing Uses clarify financial inflows and outflows in governmental funds, contributing to transparent financial management within government entities.

In this module, we will get an overview of what the General Fund is and how to account for transactions under the General Fund. We will examine and analyze the General Fund's operating budget and transactions, preparing and analyzing journal entries for budgetary reporting and preparing fund-level journal entries. We will also account for transactions under the modified accrual basis of accounting for state and local governments, handling encumbrances within and from prior fiscal years and analyzing and recording operating transactions for governmental activities at both government-wide and fund levels.

We will prepare required General Fund financial statements. They include the preparation of year-end General Fund financial statements, budget creation, and calculating ending fund balances. We will also learn how to account for property taxes under modified accrual basis. We will also learn about the key characteristics for the special revenue and permanent funds, with a focus on accurately accounting for their transactions and journal entries. Additionally, we will differentiate how to handle three grant types: purpose-restricted, time-restricted, and eligibility-restricted. Lastly, we’ll discuss how to account for transactions that take place internally versus externally and transactions that are reciprocal or nonreciprocal.

In this module we will learn about our next two governmental funds: capital projects fund and the debt service fund. We will focus on how governmental entities account for General Capital Assets and General Long-Term Liabilities on the fund-level and the government-wide level. Additionally, we will prepare financial statements for the capital projects fund and the debt service fund. We will get into detail about characteristics of a serial and term bond. Additionally, we will explore new disclosures in the financial statements and define new terms such as debt margin and debt limit.

We will introduce proprietary funds and their key characteristics. We will learn about how these two funds are reported on both the fund level and the Government-wide level. In this section, we will also cover the three net position classification and get practice on categorizing transactions into these three classifications of net position. Lastly, we will account for transactions for both proprietary funds and create financial statements.

In this module, we will focus on the Statement of Cash Flow for proprietary funds. We will first differentiate between FASB and GASB Statement of Cash Flow requirements. Next, in order to understand how governmental entities account for cash flow transactions, we will classify what activities and transactions are inflows and outflows on the Statement of Cash Flow and we will prepare a Statement of Cash Flow. In addition to this, we will create a required piece of GASB’s Statement of Cash Flow, which is the Reconciliation of Operating Income to Net Cash Provided by Operating Activities for a Statement of Cash Flow.