Accounting Fundamentals Quiz: Can You Answer These Questions?

1. What is the fund type in accounting where assets and liabilities are managed for government activities?

A) Proprietary

B) Governmental

C) Both of the above

D) None of the above

1. Answer:

The fund type in accounting where assets and liabilities are managed for government activities is Governmental.

Governmental funds are used to account for the financial resources of state and local governments that are not excluded from proprietary or fiduciary funds. These funds are used to manage assets and liabilities related to governmental activities.

Governmental fund accounting is essential for transparency and accountability in managing public resources. It helps track government expenses, revenue, and financial position to ensure responsible financial management.

By debiting expenditure when land is acquired under the fund type of Governmental, governments can accurately record the transaction and maintain accurate financial records for reporting and budgeting purposes.