Question

Total assets and deferred outflows Total liabilities and deferred inflows Total revenues Total expenditures/expenses Governmental funds $ 45,000,000 16,000,000 250,000,000 242,000,000 Enterprise funds $ 12,000,000 8,000,000 40,000,000 39,000,000 The county has four special revenue funds, with the following characteristics: Beach preservation Health education Community protection Emergency call service $ 5,000,000 $ 2,000,000 $ 4,800,000 $3,000,000 Total assets and deferred outflows Total liabilities and deferred inflows Total revenues Total expenditures 3,000,000 21,000,000 19,000,000 1,400,000 10,000,000 9,000,000 30,000,000 25,000,000 2,000,000 27,000,000 23,000,000 Which of these special revenue funds will be shown separately in the governmental funds financial statements? oooo Beach preservation fund only Health education and community protection funds Beach preservation, community protection, and emergency call service funds Beach preservation and emergency call service funds

Answer 1

The answer is C.

Major funds are funds whose revenues, expenditures/expenses, assets, or liabilities (excluding extraordinary items) are at least 10 percent of corresponding totals for all governmental or enterprise funds and at least 5 percent of the aggregate amount for all governmental and enterprise funds.

1. 10% Test:

Any governmental fund with 10% of $45,000,000 = $4,500,000 or more assets and deferred outflows meets the first test. The beach preservation and community protection funds meet this requirement.

Any governmental fund with 10 % of $16,000,000 = $1,600,000 or more liabilities and deferred inflows also meets the requirement of major funds. The beach preservation, community protection and emergency call service funds meet this test.

Any governmental fund with $250,000,000 x 10% = $25,000,000 or more revenues meets the first test. The community protection and emergency call service funds meet this test.

Any governmental fund with $242,000,000 x 10% = $24,200,000 or more expenditures meets the first test. The community protection fund meets this test.

2. 5% Test:

The beach preservation or community protection funds have at least 5% x ($45,000,000 + $12,000,000) = $2,850,000 in assets and deferred outflows.

The emergency call service funds have at least 5% x ($16,000,000 + $8,000,000) = $1,200,000 in liabilities and deferred outflows.

Hence, beach preservation, community protection and emergency call service funds are major funds and will be shown separately in the governmental funds financial statements.