The Accounting Cycle for Governmental Funds and Account Groups

Introduction

This chapter moves from the big picture of the alternative models and the prevailing approach to reporting to the details of generating the financial statements under the current model. These details are called the accounting cycle. The purpose of this chapter is to introduce and cover the features of the accounting cycle.  In short, the accounting cycle is the process that takes the detailed day-to-day transactions and events and converts them to the aggregate level financial statements and also closes the so-called books in order to ready the process to start again.  The coverage of the cycle is done by discussing and defining the steps in the cycle and by offering simple and complex examples of the cycle.  It is done for governmental funds which would include: general, special revenue, capital projects, and debt service.  The cycle is also covered for account groups which include fixed assets and long term debt. The emphasis is on the accounting cycle for the compliance and liquidity model.

Pretest

Lessons

1. Background and Definitions
2. Simple Illustration of the Accounting Cycle
3. Multifund Illustration of the Accounting Cycle
4. Complexities in the Accounting Cycle
5. Use of Computers in the Accounting Cycle

Discussion

Study Aids

Post-Test

Progress