In this video, I will work an example of governmental funds.
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The major functions typical of government, such as police, fire and sanitation, come under the category of governmental funds. The different funds in this category enable governments to record and balance cash, liabilities and other data separately for different activities. The modified accrual basis of accounting is used for governmental funds. This means that the government records revenue whenever it is available and can be measured. However, it records expenditures when it incurs liability for them. The focus of governmental funds accounting is on the short term and the fiscal accounting period.

General Fund
The general fund is the general operating fund and the catch-all category for governmental funds. It includes all government functions that do not belong in some other fund. A specific reason is necessary to use one of the other funds. These general governmental activities normally receive their support from tax revenues.

Special Revenue Funds
The purpose of special revenue funds is to report money reserved for specific purposes. For example, governments sometime use this fund to report federal grants, road work or an emergency fund. This fund does not include trust funds, which come under the fiduciary fund.

Debt-Service Funds
Debt-service funds go to repay the government's debt. In addition, money saved toward debt repayment also sometimes appears in this fund. However, governments may keep money toward debt repayment in other governmental funds, according to the GASB. In addition, fiduciary and proprietary debt activities remain in those separate funds.

Capital Projects Funds
Capital projects funds are used in accounting for purchasing, building or renovating equipment, structures and other capital assets. However, governments sometimes account for these resources in other funds. The capital projects fund does not include capital assets or improvements paid for by proprietary or fiduciary funds.

Permanent Funds
Permanent funds include investments and other resources that the government is not allowed to cash or spend. However, the government normally has the right to spend any revenue these investments produce on appropriate functions of government. In Washington state, for example, the earnings of permanent funds must be spent to benefit the state or its people.



government funds, modified accrual, special revenue funds, capital project funds, debt service funds, permanent funds, statement of revenues expenditures and changes of net assets

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