The Accounting Cycle in Governmental Funds and Account Groups

Introduction to chapter V of Financial Reporting in Government
By Dr. John Sacco , George Mason University
Revised Friday, August 15, 1997

Purpose

The purpose of this chapter is to introduce and cover the features of the accounting cycle . 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.

Learning Objectives

  1. Show the purpose of the accounting cycle
  2. Outline the typical steps in the accounting cycle
  3. Note that the cycle is done for each fund
  4. Introduce the accounting equation and its relation to the cycle
  5. Cover debits and credits and their relation to the accounting equation and cycle
  6. Show the use of the accounting equation and debits and credits
  7. Provide a one fund example of the accounting cycle
  8. Provide a multifund example of the cycle
  9. Illustrate some of the subtleties of the cycle
  10. Show the role of computers in the accounting cycle.
See Also: a pretest , the lessons , a discussion , the study aides , a test , and your progress evaluation