Upon examining the balance sheet of a large city, you notice that the total assets of the

Question:

Upon examining the of a large city, you notice that the total assets of the general fund far exceed those of the combined total of the city’s ten separate special revenue funds. More-over, you observe that there are no funds for public safety, sanitation, health and welfare, and general administration—all important functions of the government. Why do you suppose the city hasn’t attempted to ‘‘even out’’ the assets in the funds? Why does it not maintain funds for each of its major functional areas?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...