Study on Government and Non Profit Accounting

Government and non-profit
accounting

TABLE OF CONTENTS
Introduction................................................................................................................................3
Part 1..........................................................................................................................................3
Part 2..........................................................................................................................................4
Part 3..........................................................................................................................................6
Conclusion..................................................................................................................................6
References..................................................................................................................................7

INTRODUCTION
The present study is based on preparing journal entries for Preston Village for recording it in
the appropriate government funds by considering both Modified accrual accounting and full
accrual accounting method. Further prepared journal entries for reflecting the transactions on
government-wide statements will be justified by describing significant for both sets of
financial statements.
PART 1
Modified accrual accounting is meant for realizing proceeds when they turn into accessible
and measurable having some exceptions while recognizing expenses during the occurrence of
liabilities (McKinney, 2015).
Journal entries according to modified accrual basis are as follows:
1. Preston Village issued $20million to acquire a new building for municipal office in a
capital project fund; the profits were recorded.
Cash a/c Dr. $20,000,000
Bonds a/c Cr. $20,000,000
2. The company purchased the specified building by giving the amount of $20 million.
Expenditure a/c Dr. $20,000,000
Cash a/c Cr. $20,000,000
3. The company recorded the transaction by making depreciation on $300000 on the
municipal vehicles.
A) Modified accrual – none
4. Transfer of $2060000 has been made from general fund to debt service fund.
Transfer out to debt service fund a/c Dr. $2,060,000
Cash a/c Cr. $2,060,000
Cash a/c Dr. $2,060,000