701.2 Basic Fund Accounting PDF

THE BASICS OF FUND ACCOUNTING
Presented by:
Darla Erickson
Local Government Services Bureau
State Accounting Division, Department of Administration 1
Topics covered in this presentation:
• Overview of Governmental Accounting Basics
Overview of Governmental Accounting Basics
• Principles
• Fundamentals of Debits and Credits
• Fund Accounting/Basis of Accounting
• Using the BARS Chart of Accounts
• Funds
• Accounts
• Objects
1
SOME OF THE ACRONYMS COMMON
TO GOVERNMENTAL ACCOUNTING
TO GOVERNMENTAL ACCOUNTING
CAFR Comprehensive Annual Financial Report
GASB Governmental Accounting Standards Board
GAAFR Governmental Accounting, Auditing,

and Financial Reporting
GAAP Generally Accepted Accounting Principles
• PRINCIPLES OF GOVERNMENTAL ACCOUNTING
• Accounting and Reporting Capabilities
• Accounting systems should be maintained in accordance with generally
accepted accounting principles (GAAP) and uniform in MT by using the BARS
Chart of Accounts as prescribed by the Local Government Services Bureau
• Chart of Accounts:
http://doa.mt.gov/lgsb/Forms/AccountingSystemsProgram/1_AccountingM
anuals/01_BARSChartofAccount
• Updates: http://doa.mt.gov/lgsb/bars_memos
• Fund Accounting Systems
• Accounting systems should be organized and operated on a fund basis
• Fund Types
• Fund financial statements should report governmental, proprietary
and fiduciary fund types if applicable
• Number of Funds
• Only maintain those funds required by law and sound financial management
4
2
• Special Revenue Funds (*recent change)
p ( g )
• Special Revenue Funds must meet the new definition of a special
revenue fund according to GASB54:
• Used to account for proceeds of specific revenue sources that are
committed or restricted to expenditures for specific purposes other
than debt service or capital projects.
– Balances will be
» Non‐spendable
» Restricted
» Committed
» Assigned (but not only assigned fund balance)
» Negative Unassigned Fund Balance
*Existing funds that do not meet this fund balance type will report their balance in the
General Fund at year‐end for reporting purposes.
*Or Commit Revenues or Fund Balance to a major purpose by year‐end by taking the
highest action of local government by year‐end.
5
• Reporting Capital Assets
p g p
• A clear distinction should be made between general capital assets and
those of the proprietary and fiduciary funds.
• Capital Assets are different than an asset inventory listing
– Threshold Policy should be determined by cost and useful life
• Valuation of Capital Assets
• Assets should be reported at historic cost
– Donated assets at the estimated fair market value at the time of acquisition
• Depreciation of Capital Assets
• Capital assets should be depreciated over their estimated useful lives
– Use your entity’s historical information to determine the useful life – the life will
vary according to use of the asset
6
3
• Reporting Long‐term Liabilities
Reporting Long‐term Liabilities
• A clear distinction should be made between business‐type long‐term
liabilities and general long‐term liabilities
• Measurement Focus/Basis of Accounting in the BFS
• The basic financial statements should display the government‐wide
financial statements (full accrual) and the fund financial statements
(modified accrual)
• Budgeting, Budgetary Control/Reporting
• Budgets should be adopted, controlled through monitoring and
comparison statements included in reporting.
• The budgetary statements should present original budget, final
budget, actual amounts and a comparison with actual to final
– Date change: Approved budget due to County by the later of 30 days after receipt
of the certified taxable valuation or first Thursday in Sept
– Due to LGSB 60 days after receipt of the certified taxable valuation or Oct 1
– Local Budget Act: 7‐6‐40 MCA
• Transfer, Revenue, Expenditure/Expense Classifications
• Revenues should be maintained by fund, major source and other
financing sources
• Expenditures of governmental funds by fund, function/activity and
other financing uses (transfers, etc)
• Expenses of proprietary funds by fund/activity/object
8
4
• Common Terminology and Classification
gy f
• A common terminology and classification should be used
consistently throughout the accounting software, budget, and
financial report of each fund
• Annual Financial Reports
• Preparation of financial reports for the benefit of management
should be prepared
• An Annual Financial Report should be prepared and made available
An Annual Financial Report should be prepared and made available
to the public and the Local Government Services Bureau
• Due to LGSB by Dec 31
• Financial Statements:
• Balance Sheet (Governmental Funds) or
Statement of Net Assets (Enterprise Funds)
Consists of:
• Assets – debit balance
• Liabilities
Liabilities – credit balance
• Fund Balance (Governmental Funds) or Net
Assets(Enterprise Funds)
Fund Balance/Net Assets = Assets – Liabilities
Or Assets – Liabilities = Fund Bal/Net Assets 10
5
Assets
• Have a Debit Balance
• If an asset has a credit balance – the
account has a “negative” balance
• This is not normal
hi i l
11
 To increase an asset account you

debit the account
To decrease an asset account

you credit the account
12
6
Liabilities
• Have a Credit Balance
• If a liability has a debit balance –
the account has a “negative”
balance
13
 To increase a liability account

To decrease a liability account

you debit the account
14
7
Fund Balance/Net Assets has a credit balance
If it has a debit balance that is “negative”
negative and isn’t
isn t
normal.
Entries should rarely if ever debit or credit fund bal or
net assets
 When you post a debit to an asset or
liability account fund balance/net assets will
automatically increase
When you post a credit to an asset or liability

account fund balance/net assets will
automatically decrease
15
• Financial Statements:
Statement of Revenues, Expenditures and Changes in
, p g
Fund Balances (Governmental Funds)
or Statement of Revenue, Expenses and Changes in Net
Assets (Enterprise Funds)
Consists of:
• Revenues – credit balance
• Expenditures/Expenses – debit balance
• Other Financing Sources (Uses) or Non‐Operating
Revenue/Expense
16
8
Revenues
• Have a Credit Balance
• If a revenue has a debit balance –
the account has a “negative”
balance
17
 To increase a revenue account

To decrease a revenue account

you debit the account
18
9
Expenditures/Expenses
• Have a Debit Balance
• If an expenditure/expense account
has a credit balance – the account
has a “negative” balance
has a “negative” balance
19
 To increase an expense/expenditure
account you debit the account
To decrease an expense/expenditure

account you credit the account
20
10
FUNDAMENTALS OF DEBITS & CREDITS
BASIC ACCOUNTING FORMULA
DR = CR
Example: You receive $10 for a dog license
$10 = $10
Cash (Asset) = Revenue (Pet Lic)
101000 = 323030 21
BASIC ACCOUNTING
EXPENSES/
FORMULA
EXPENDITURES + REVENUES +
ASSETS = LIABILITIES + EQUITY
DR = CR
22
11
ACCOUNTING FORMULA
EXPENSES/
ASSETS + EXPENDITURES = REVENUES + LIABILITIES + EQUITY
ASSETS = LIABILITIES + EQUITY
DR = CR
23
SELF-BALANCING SET OF ACCOUNTS
ACCOUNTING FORMULA
ASSETS + EXPENSE = REVENUES + LIABILITIES + EQUITY
DR = CR
24
12
• RECAP
Debits must equal credits
An entry made within a fund should have equal debits
and credits
All debits and credits should be made to asset,
liability, revenue, expenditure/expense, other
financing sources/uses or restatement accounts
Rarely, if ever, should fund balance/net assets
accounts be debited or credited
25
Test our knowledge
1. Assets have a normal __________ balance:
1 Credit
1. C dit
2. Debit
2. Liabilities have a normal ______ balance:
1. Debit
2. Credit
3. Debits should equal:
1. Revenues
2. Credits
26
13
TYPES OF FUNDS
GOVERNMENTAL FUNDS
• 1000 ~ General
• 2000 ~ Special Revenue
• 3000 ~ Debt Service
• 4000 ~ Capital Projects
• 8000 ~ Permanent 27
TYPES OF FUNDS
PROPRIETARY FUNDS
• 5000 ~ Enterprise
• 6000 ~ Internal Service
28
14
TYPES OF FUNDS
FIDUCIARY FUNDS
• 7000 ~ Pension Trust
~ Investment Trust
~ Private Purpose Trusts
~ Agency
29
TYPES OF FUNDS
9000 ACCOUNT GROUPS - For Governmental Funds!

• General Capital Assets ~ 9000
• General Long-Term Debt ~ 9500
• No longer required to be reported
• Can keep updated for your records
30
15
BASIS OF ACCOUNTING
Deals with the timing and recognition of
transactions and events
When recognized:
Full Accrual Basis
Modified Accrual Basis
Cash Basis
31
BACK TO THE BASICS
Full Accrual Basis of Accounting
• Recognizes increases and decreases in economic
resources (Net Assets) as soon as the
underlying event or transaction occurs
•Revenues are recognized as soon as they are
earned
•Expenses are recognized as soon as the liability
is incurred
• Regardless of the time of related cash inflow
and outflows
32
16
BACK TO THE BASICS
Modified Accrual Basis of Accounting
•Recognizes
g increases and decreases in financial
spendable resources only to the extent that
they reflect near-term inflows and outflows of
cash
• Amounts are recognized as revenues when earned,
only so long as they are collectible within the
period or soon enough thereafter to be used to
pay liabilities of the current period. (60 days)
• In other words, when they are available to pay
expenditures of the current period. 33
BACK TO THE BASICS
The Cash Basis of Accounting
• Is
I th
the simplest
i l t tot achieve
hi and
d provides
id ththe lleastt
disclosure
• Only revenues received and expenses or expenditures
disbursed are recognized
• The Balance Sheet of the Governmental Unit
displays only a balance in cash and the fund
balance accounts.
• The Operating Statement presents results of only the
cash transactions for the reporting fund. 34
17
Test our knowledge
Governmental Funds are reported using

which Basis of Accounting:
1. Full Accrual Basis
2. Modified Basis
3. Cash Basis
Enterprise Funds are reported using
which Basis of Accounting:
1. Full Accrual Basis
2. Modified Basis
3. Cash Basis 35
BASIS & MEASUREMENT FOCUS
PRACTICAL DIFFERENCES:
• Receipt of long-term debt proceeds
• Repayment of the principal of long-term

debt
• Capital acquisition (outlay)
• Depreciation of capital assets
• Deferrals and amortizations

36
18
BACK TO THE BASICS
ILLUSTRATIVE ENTRIES
RECEIPT OF LONG
LONG-TERM
TERM DEBT PROCEEDS
PROCEEDS:
PROPRIETARY FUNDS: DR CR
Cash $20,000
Bonds Payable $20,000
GOVERNMENTAL FUNDS:
Cash $20,000
Other Financing Sources $20,000
(Proceeds of General Long-Term Debt) 37
BACK TO THE BASICS
REPAYMENT OF THE PRINCIPAL OF LONG-TERM DEBT:
Bonds Payable $5,000
Interest Expense 300
Cash $5,300
GOVERNMENTAL FUNDS:
Expenditure- Bond Principal $5,000
Expenditure-bond Interest 300
Cash $5,300
38
19
BACK TO THE BASICS
CAPITAL ACQUISITION: DR CR
PROPRIETARY FUNDS:
Equipment $20,000
Cash $20,000
*If expense/capital outlay was used – reverse as part of closing entries
GOVERNMENTAL FUNDS:
Expenditure-capital Outlay $20,000
Cash $20,000
39
BACK TO THE BASICS
Depreciation Expense $2,000
Accumulated Depreciation $2,000
GOVERNMENTAL FUNDS:
Depreciation may be Recorded in the General Capital Asset
Account Group
*****Not in the Governmental Fund Itself!
40
20
41
BARS CHART OF ACCOUNTS
• Chart of Accounts is the framework of an
accounting system
• Is a uniform system for Local Governments
• Provides the information needed for
administration & reporting purposes
• Allows for comparisons
ll f i
• Funds have of 4 digits
• Accounts have 6 digits
• Objects have 3 digits
42
21
BARS ‐ FUND CLASSIFICATIONS
1000 - General Fund
2000 - Special Revenue Funds
3000 - Debt Service Funds
4000 - Capital Projects Funds
5000 - Enterprise Funds
6000 - Internal Service Funds
7000 - Fiduciary Funds (Trust & Agency)
8000 - Permanent Funds
9000 - General Capital Asset/Long-Term Debt
43
BARS FUND CLASSIFICATION CONT.
Example of further breakdown of funds:
• 5000 – 5999 – Enterprise Funds
p
5010 – Golf
5110 – Hospital/Nursing Home
5210 – Water
5310 – Sewer
5410 – Solid Waste
5415 ‐ Landfill
5510 – Ambulance 44
22
BARS BALANCE SHEET ACCOUNTS
100000 - Assets and Other Debits
200000 - Liabilities, Equity and

Other Credits
Within these two groups, assets and liabilities are
f th defined
further d fi d into
i t other
th logical
l i l categories
t i
depending upon the nature of the particular asset
or liability.
45
BALANCE SHEET ACCOUNTS
Principal groups of asset & other debit numbers:
100000 – Cash/Investments
/
110000 – Taxes/Assessments Receivable
120000 – Other Receivables
130000 – Due from and advance from
140000 – Prepaid Expenses
150000 – Inventories
160000 – Restricted Assets
170000 – Other Debits 46
23
Example of further breakdown of an asset
account:
t
110000 – Taxes Receivable
111000 – Mobile Home Taxes Receivable
113000 – Real Taxes Receivable
115000 – Personal Taxes Receivable
116000 – Protested Taxes Receivable
118000 – Special Assessments Receivable 47
Liabilities, equity & other credits numbers:
200000 –
0000 Short‐term Payables
Sh t t P bl
210000 – Other Short‐term Payables/Due to
220000 – Deferred Credits
230000 – Long‐term Liabilities
240000 – Other credits
250000 – 270000 – Fund Balance/Net Assets
280000 – Investment in Capital Assets (Fund 9500)
48
24
BARS –– REVENUE ACCOUNTS
BARS
310000 - Taxes
320000 - Licenses and Permits
330000 - Intergovernmental Revenues
340000 - Charges for Services
350000 - Fines and Forfeitures
360000 - Miscellaneous Revenues
370000 - Investment Earnings
380000 - Other Financing Sources
390000 - Internal Services
49
BARS –– EXPENDITURE ACCOUNTS
BARS
410000 - General Government
420000 - Public Safety
430000 - Public Works
440000 - Public Health
450000 - Social/Economic Services
460000 - Culture and Recreation
470000 - Housing and Community Dev.
480000 - Conversation of Natural Resources
490000 - Debt Service
50
25
BARS –– EXPENDITURE ACCOUNTS
BARS EXPENDITURE ACCOUNTS ––
CONT.
500000 - Internal Services

510000 - Miscellaneous
520000 - Other Financing Uses
51
BARS – OBJECT
BARS –
EXPENDITURE CLASSIFICATIONS
100 - Personal Services
200 - Supplies
S i
300 - Purchased Services
400 - Building Materials
500 - Fixed Charges (Insurance, rent)
600 - Debt Service
700 - Grants, Contributions, Indemnities
800 - Other Objects, Transfers, Depreciation
900 - Capital Outlay 52
26
BARS – OBJECT
BARS –
EXPENDITURE CLASSIFICATIONS
Example of further breakdown of object codes:
200
00 – Supplies
210 – Offices Supplies
220 – Operating Supplies
230 – Repair & Maintenance Supplies
231 – Fuel –
Fuel – Gas, Oil, Diesel
Gas Oil Diesel
232 – Motor vehicle parts
233 – Machinery & equipment parts
240 – Other Repair & Maintenance Supplies
250 – Supplies for Resale 53
BACK TO THE BASICS
BUDGETARY, ACCOUNTING AND REPORTING SYSTEM (BARS) FOR
MONTANA, CITIES, TOWNS AND COUNTIES
BARS ACCOUNT STRUCTURE
Asset & Liability Accounts - (Illustration 1)
1st Digit 1 = Assets & Other Debits

1st Digit 2 = Liabilities& Other Credits
Fund Account
Number Number
XXXX XXXXXX
54
27
BACK TO THE BASICS
BARS ACCOUNT STRUCTURE
Asset & Liability Accounts - (Illustration 1)
1st Digit 1 = Assets & Other Debits

1st Digit 2 = Liabilities& Other Credits
Fund Account
Number Number
1000 101000
GENERAL CASH 55
BACK TO THE BASICS
BARS ACCOUNT STRUCTURE - CONT.
Revenue Accounts - (Illustration 2)
1st Digit 3= Revenue

Organization
Fund Code Major

Program
g Job Code ((Department
p ) Source Sub-Source Detail
X XXX 1000 XXX 31 1 010
GENERAL TAXES GENERAL REAL
Optional Optional PROPERTY ESTATE
TAXES TAXES
56
28
BACK TO THE BASICS
BARS ACCOUNT STRUCTURE - CONT.
Expenditure Accounts - (Illustration 3)
1st Digit 4 & 5 - Expenditures

Organization
Fund Code Sub Major Sub-
Program Job Code (Department) Function Activity Activity Object Object Detail
X XXX 1000 XXX 42 01 40 2 2 1
PUBLIC SUPPLIES
Optional Optional SAFETY Optional
GENERAL
CRIME UNIFORMS
CONTROL &
INVESTIGA- OPERATING
LAW TION SUPPLIES
ENFORCEMENT
SERVICES
57
58
29
BACK TO THE BASICS
59
BACK TO THE BASICS
60
30
REVENUE QUIZ
Identify the appropriate revenue code number for the following revenue items:
Fund # Account #
1. Accruing monthly fees for garbage collections services _____________________________
2. The receipt of real estate taxes in the general fund _____________________________
3. The receipt of personal property taxes in general fund _____________________________
4. The receipt of money from the Montana Treasure State
Endowment program for a water project _____________________________
5. The receipt of interest on a capital projects fund _____________________________
6. The receipt of money from the state as an allocation from
taxes on fuel _____________________________
7. The receipt of a federal Community Development Block
Grant _____________________________
8. The receipt of money from the City Judge for fines _____________________________
9. The receipt of proceeds from swimming pool collections______________________________
10. The receipt of fees collected by the clerk for copies ______________________________
61
EXPENDITURE QUIZ
Identify the appropriate expenditure/expense code number for the following items:
Fund Account Object
1. Payment of wages to the Financial Clerk _____________________
2. The purchase of tires for a dump truck in the road
and street department _____________________
3. The purchase of a garbage truck for use in collection ______________________
4. The purchase of envelopes for the City Judge ______________________
5. Payment for electricity for a building at the water plant ______________________
6. Payments for the rental of a backhoe paid for with
gas tax monies
gas tax monies _____________________
7. The purchase of a riding lawn mower for the park _____________________
8. Recording the depreciation of garbage equipment _____________________
9. Payment of the employer's contribution to Police Chief’s
retirement _____________________
10. Payment for the cost of the audit of the City _____________________62
31
Questions…
63
Local Government Services Bureau
Website: http://doa.mt.gov/lgsb
Address: 301 S Park Ave ~ Room 340
PO B
Box 200547 ~ Helena,
H l MT 59620-0547
59620 0547
Phone: 841-2909
64
32
Lincoln Daniels Sherida
Glacier Toole n
Hill
Blaine
Flathead Valley Roosevelt
Phillips
Richland
Teton Chouteau
Lake
McCone
Dawson
Cascade Fergus Garfield
Judit
Missoula
h
Basin
Musselshell Rosebud
Meagher
Fallon
Custer
Sweet
Gallati Grass
n
Powder Carter
Big Horn
River
Park
Madison Carbon
Kalispell Helena Billings Circle

Magda Nelson Jamie Cain Darla Erickson Tod Kasten
(406)257-5245 (406)841-2902 (406)371-5627 (406) 974-3377
mmnelson@bresnan.net Jcain@MT.Gov Derickson@MT.Gov Tkasten@MT.Gov
65
Jamie Cain Darla Erickson

Area 1 – Helena Area 2 – Billings
Phone: 841-2902 Phone: 371-5627
Jcain@mt.gov derickson@mt.gov
Area 1 – Helena Area 2 – Billings
Anaconda Deer Lodge
Anaconda-Deer Big Horn
Beaverhead Carbon
Blaine
Broadwater Fergus
Butte-Silver Bow Golden Valley
Cascade Musselshell
Chouteau Park
Gallatin
Granite Petroleum
Hill Rosebud
Jefferson
ff Stillwater
Lewis & Clark Sweet Grass
Madison
Meagher Treasure
Powell Wheatland
Teton Yellowstone
66
33
Tod Kasten Magda Nelson
Area 3 – Circle Area 4 – Kalispell
Phone: 974-3377 Phone: 257-5245
TKasten@mt.gov mmnelson@bresnan.net
Area 3 – Miles City Area 4 – Kalispell
Carter Flathead
Custer Glacier
Daniels Lake
Dawson Liberty
Fallon Lincoln
McCone Mineral
Phillips Missoula
Powder River Pondera
P i i
Prairie R
Ravalli
lli
Richland Sanders
Roosevelt Toole
Sheridan
Valley
Wibaux
67
68
34
• Q
QUIZ #1 – Account Type & Normal Balance
yp
Accounts to use: Normal Balances:
* Asset * Debit
* Liability * Credit
* Equity
* Revenue
* Expenditure/Expense
* Contra‐asset (use 2 times)
69
QUIZ #1 – Account Type & Normal Balance
TYPE OF NORMAL
ACCOUNT NAME ACCOUNT BALANCE
Depreciation __________ _________
Accounts Payable __________ _________
Deferred Revenue __________ _________
Interest Receivable __________ ________

Assigned Fund Balance __________ _________
70
35
QUIZ #1 - CONT.
TYPE OF NORMAL
Cash __________ _________
Amount To Be Provided __________ _________
g
Interest Earnings __________ _________
Allowance For Depreciation __________ ________

City Court Fines (Collected) __________ _________
71
QUIZ #1 - CONT.
TYPE OF NORMAL
Real Estate Taxes (Collected) __________ _________
Capital Outlay __________ _________
Warrants Payable
y __________ _________
Inventories __________ ________

Net Assets __________ _________
72
36
QUIZ #1 - CONT.
TYPE OF NORMAL
Due To Other Governments __________ _________
Accounts Receivable __________ _________
Debt Service Interest __________ _________
Judgments & Losses __________ ________

Prepaid Expense __________ _________
73
QUIZ #1 - CONT.
TYPE OF NORMAL
Bonds Payable __________ _________
Taxes Receivable __________ _________
Gas Tax Apportionment
pp __________ _________
Deposits Payable __________ ________

Animal Licenses __________ _________
74
37
QUIZ #1 - CONT.
TYPE OF NORMAL
Supplies purchased _________ _________
Sale of Capital Assets __________ _________
Allowance For Uncollectible Accounts __________ _________
County Option Tax __________ ________

Federal Disaster Aid __________ _________
75
QUIZ #1 - CONT.
TYPE OF NORMAL
Street & Road Maintenance _________ _________
Due From Other Funds __________ _________
Machineryy & Equipment
q p __________ _________
Fund Balance __________ ________

Charge for Copying Services (collected) __________ _________
76
38
QUIZ #1 - CONT.
TYPE OF NORMAL
Jury Services _________ _________
Penalty & Interest on Delinq. Taxes __________ _________
Restricted for Revenue Bond __________ _________
Advance to other Funds __________ ________
77
78
39
79
80
40
• Quiz #2 – Common entries
– Accounts to use for this quiz:
 Cash
 Supplies
 Gas Tax Apportionment
 Taxes Receivable
 Accounts Receivable
 Accounts Payable
 Interest Receivable
 Interest Revenue
 Prepaid Expense
 Expense (Enterprise Funds)/Expenditure (Governmental Funds)
 Depreciation
 Allowance for Depreciation
 Deferred Revenue
 Tax Revenue
81
QUIZ #2 – ENTRIES
DEBIT CREDIT
Record Receipt of Gas Tax Apportionment from State
______________________________ $______
___________________________ $_______
Record Purchase of Supplies
______________________________ $______
___________________________ $_______
82
41
QUIZ #2 – ENTRIES CONT.
DEBIT CREDIT
Record the Receipt of Taxes
______________________________ $______
___________________________ $_______
R
Record
d th
the A
Accruall off E
Expenditures
dit
______________________________ $______
___________________________ $_______
83
DEBIT CREDIT
Record the Payment of the Expenditure Accrual
______________________________ $______
___________________________ $_______
Record the Accrual of Interest Revenue
______________________________ $______
___________________________ $_______
84
42
DEBIT CREDIT
Record the Receipt of the Interest Revenue
______________________________ $______
___________________________ $_______
Record Annual Depreciation Expense
______________________________ $______
___________________________ $_______
85
86
43
87
44

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THE BASICS OF FUND ACCOUNTING

CAFR Comprehensive Annual Financial Report

GASB Governmental Accounting Standards Board

GAAFR Governmental Accounting, Auditing,

 To increase an asset account you

To decrease an asset account

 To increase a liability account

To decrease a liability account

When you post a credit to an asset or liability

 To increase a revenue account

To decrease a revenue account

To decrease an expense/expenditure

BASIC ACCOUNTING FORMULA

ASSETS = LIABILITIES + EQUITY

ASSETS = LIABILITIES + EQUITY

SELF-BALANCING SET OF ACCOUNTS

ASSETS + EXPENSE = REVENUES + LIABILITIES + EQUITY

• 2000 ~ Special Revenue

• 3000 ~ Debt Service

• 4000 ~ Capital Projects

9000 ACCOUNT GROUPS - For Governmental Funds!

Governmental Funds are reported using

• Repayment of the principal of long-term

• Capital acquisition (outlay)

• Depreciation of capital assets

• Deferrals and amortizations

100000 - Assets and Other Debits

200000 - Liabilities, Equity and

500000 - Internal Services

BARS ACCOUNT STRUCTURE

Asset & Liability Accounts - (Illustration 1)

1st Digit 1 = Assets & Other Debits

Asset & Liability Accounts - (Illustration 1)

1st Digit 1 = Assets & Other Debits

Revenue Accounts - (Illustration 2)

1st Digit 3= Revenue

Fund Code Major

1st Digit 4 & 5 - Expenditures

Fund Code Sub Major Sub-

Local Government Services Bureau

Kalispell Helena Billings Circle

Jamie Cain Darla Erickson

Interest Receivable __________ ________

Allowance For Depreciation __________ ________

Inventories __________ ________

Judgments & Losses __________ ________

Deposits Payable __________ ________

County Option Tax __________ ________

Fund Balance __________ ________

Advance to other Funds __________ ________

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Interest Receivable __

Allowance For Depreciation __

Inventories __

Judgments & Losses __

Deposits Payable __

County Option Tax __

Fund Balance __

Advance to other Funds __